SBC Seeks Rollback of Data Regs

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Claiming that cable has a competitive advantage, SBC Communications Inc. is
urging federal regulators to remove regulations that the Baby Bell said hamper
its ability to deploy high-speed Internet facilities.

The cable industry, meanwhile, claimed that market mechanisms are spurring
phone and cable companies to make broadband available to millions of consumers,
demonstrating that changes in the regulatory scheme are unnecessary.

SBC, in a Sept. 24 filing with the Federal Communications Commission, said
cable's broadband advantage in homes passed and subscribers served will continue
unless burdensome regulations on phone companies are lifted.

'Despite clear evidence that [digital-subscriber-line service] is trailing
far behind cable, telephone companies are regulated to the hilt, while other
service providers -- the dominant cable providers, in particular -- are left
alone,' SBC said.

Except for AOL Time Warner Inc., cable operators face little in the way of
broadband regulation. Phone companies, by contrast, have to share their
facilities with competitors and provide consumers with the Internet-service
provider of their choice.

SBC said the FCC had two choices: Either make the cable industry look more
like the phone industry, or make the phone industry look more like the cable
industry.

'The most logical framework is the latter,' the telco said in the 15-page
filing.

According to industry data, cable operators have signed up 5.5 million
broadband subscribers, while DSL provided by phone companies has signed up 3
million. SBC serves about 1 million DSL subscribers.

Wall Street analyst Morgan Stanley Dean Witter & Co. said in a June
report that cable-modem service was available to 66.1 million U.S. homes as of
June 30, while DSL reached 37.5 million homes as December 2000.

By the end of 2000, Morgan Stanley projected cable's high-speed service to
reach 95.1 million homes and DSL to reach 63.6 million.

While SBC claimed that the data show cable with a large and growing
advantage, the cable industry told the FCC broadband deployment and subscriber
data provide evidence of robust competition requiring no regulatory
tinkering.

'The competitiveness of this marketplace is not open to question,' the
National Cable & Telecommunications Association told the FCC in a Sept. 24
filing.

AT&T Corp., which provides broadband to 1.3 million cable-modem
subscribers, said the DSL market would be growing faster if many non-Bell DSL
providers had not gone bankrupt. AT&T attributed those failures to the Baby
Bells' refusal to abide by network-sharing rules mandated under the
Telecommunications Act of 1996.

'If these failed competitors did make one common mistake in their business
plans, it was relying on the promise of the 1996 Act that they would have a fair
chance to compete with the established incumbents,' AT&T said in a separate
FCC filing.

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