Powell: Line-Sharing Ruling Abysmal


Federal Communications Commission chairman Michael Powell scolded three of
his fellow commissioners Tuesday for scaling backing the rights of data
providers that use the facilities of dominant local phone carriers.

"The line-sharing decision is abysmal. There is no defense for it," Powell
told reporters at FCC headquarters. "When I hear commissioners openly opine that
they only did it to make a deal, well, explain that to the employees of Covad
[Communications Co.]."

Under line sharing, Covad could save money by leasing just enough of the
local copper loop to provide high-speed Internet access.

Already a penny stock, Covad lost big and its stock collapsed even more Feb.
20 when the FCC voted to phase out line sharing within three years. Maintaining
access will require Covad to purchase the entire line.

Voting to end line sharing were Republican FCC member Kevin Martin and
Democrats Michael Copps and Jonathan Adelstein. Those three also united to kill
Powell's plan to overhaul local competition rules.

"I feel very strongly that line sharing should have stayed," Powell said. "We
play with live ammunition here. If you don't shoot straight, people get killed,
and I think this one, more than anything, demonstrates that."

In House testimony last week, Martin said a federal-court decision eliminated
the FCC line-sharing rules because monopoly regulation was unnecessary with
cable operators flourishing as broadband-access providers.

"There's probably no company that I met with more than Covad, one of the
primary users of line sharing, who I had met with repeatedly about my concerns
on the rule," Martin told the House Subcommittee on Telecommunications and the

Line sharing struggled in market. According to the most recent FCC data,
line-sharing companies served no more than 227,000 subscribers nationally as of
June 2002.