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DSL

Maine Supreme Court Ruling May Help Expand DSL Service

In June, the Maine Supreme Court ruled that the PUC may order Verizon to connect wires to Skowhegan Online, Inc. (SOI), a very small Internet company. SOI plans to connect DSL equipment to those wires at a utility pole and provide DSL to rural customers who are currently without any other broadband (high-speed Internet) access. The PUC, the Public Advocate, and other Internet companies all argued against Verizon's appeal. While thise is good news, it is not clear whether Verizon will continue to resist furnishing these facilities.

More Setbacks for Local Competition

Since last April, customers trying to sign up with competitive local telephone companies, such as USA and Homefield, were surprised to learn that new customers were no longer being accepted. After the FCC changed the rules governing the wholesale costs of access to Verizon's network, small competitors had a choice - raise prices (and lose customers) or stop taking new customers. Now, there are no economical alternative local service options for most residential customers. High volume toll customers still have access to unlimited local/long-distance and local/DSL bundled plans. Those with high-speed Internet (broadband) still have Voice Over Internet (VOIP) options, and, if service is reliable in your area, there are also wireless options. However, neither VOIP nor wireless service are yet fully reliable substitutes for regular phone service. Verizon and the other three former Bell Companies have had enormous success in their strategy to eliminate local telecommunications competition. Their aggressive litigation and lobbying have resulted in FCC and court decisions that have greatly weakened the ability of smaller competitors to provide wireline telephone service and high-speed Internet service. The promise of the 1996 Telecommunications Act was that companies like Verizon would open their networks to competition in exchange for the right to serve the interstate long-distance market. However, after winning the prize of access to the long-distance market, the Bells launched their aggressive fight to fill local competition. Now, it appears that we're headed back to a monopoly market for plain local telephone service.

In 2004, Verizon successfully challenged, in federal court, FCC rules governing competitive access to its network. After the FCC refused to appeal those decisions, the FCC adopted new rules much less favorable to competitors. Having achieved its goals to change federal regulation, in April 2005, Verizon went so far as to sue the Maine Public Utilities Commission in federal court after the PUC determined that it had authority to require Verizon to continue to offer types of wholesale access that Verizon promised to make available when it sought entry into the interstate long-distance market.

Recently, the PUC interrupted its consideration of "line-sharing", which allows competitors to provide DSL Internet service. The PUC put the case on hold after Verizon moved to have it dismissed based on an FCC ruling that several southern states could not require Bell South to provide DSL to its local customers who use a competitor's local voice service. In essence, the FCC is allowing the Bell companies to undermine competition by telling customers they must buy the phone company's bundled services if they want DSL. Verizon also appealed to the Maine Supreme Court, the Maine PUC's deicision to allow a very small Skowhegan-based DSL provider to access Verizon's network in order to bring DSL to rural customers who have no other access to broadband services. In June, that case was resolved in favor of the Skowhegan provider.

What may turn out to be the worst assault on competition is the impending merger of Verizon with MCI, along with the impending merger of AT&T with SBC (the second biggest of the four Bell companies, after Verizon.) Not only will these mergers remove the only large local service competitors to Verizon and SBC, but it removes their only well-financed lobbying and legal oppositions in Congress, the FCC, and the courts. As the new rules for the telecommunications industry are developed in Congress over the next few years, the legislative agenda of the Bells may become a virtual monopoly.

 

 

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