Covad Links Line Sharing to DBS Merger

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It took just a few days for someone to tie their own policy battle at the
Federal Communications Commission to the agency's rejection of the merger
between EchoStar Communications Corp. and Hughes Electronics Corp.

Covad Communications Co. is lobbying the FCC to preserve line-sharing rules.
These FCC rules -- which are in limbo due to a court ruling and FCC chairman
Michael Powell's own doubts about current broadband policies -- allow Covad to
serve high-speed-data subscribers by leasing just the high-frequency portion of
a phone incumbent's copper loop.

In an Oct. 15 letter, Covad told the FCC the rationale for rejecting the DBS
merger -- namely, that the pay TV market would shrink from three players to two
in some cases or from two players to one in others -- was consistent with
Covad's view that line-sharing rules were necessary to ensure that the broadband
market does not become a phone and cable duopoly.

'In comments explaining why the [FCC] rejected the proposed EchoStar/DirecTV
merger, [chairman Powell] offered reasons that apply directly to the
line-sharing decision now facing the FCC,' Covad vice president and assistant
general counsel Jason Oxman said.

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