Washington -- The Federal Communications Commission on
Thursday proposed deregulating data services provided by the Baby Bells, but the phone
companies said they were upset about a separate affiliate requirement.
"Whenever you have to have a separate subsidiary to
start a new service ... it almost doubles your cost," said Nanci Bernstrom, director
of federal information for U S West Inc.
Under the unanimously adopted proposal, an incumbent phone
network may establish a separate affiliate to offer high-speed Internet service. The
affiliate would not be required to comply with resale, interconnection or unbundled access
mandates that apply to an incumbent phone company that offers high-speed data service on
an integrated basis.
The FCC is seeking comment on its proposal. The National
Cable Television Association said it would not oppose phone deregulation as long as the
phone companies have opened their networks to competitors.