Copyright 2004 Los Angeles Times
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Los Angeles Times
October 15, 2004 Friday
Federal regulators Thursday granted big telephone companies more control over the expensive high-speed fiber-optic networks they are building for residential areas, prompting SBC Communications Inc. to accelerate its plans to reach 18 million households.
The Federal Communications Commission also set standards for offering broadband service to consumers over power lines and cleared some spectrum for advanced wireless services like video-conferencing and movies.
In a 4-1 vote, the FCC decided that phone companies building fiber-optic networks for residential customers do not have to make them available to rivals.
The networks will be free from regulatory control if the fiber comes within 500 feet of homes or if the networks use only Internet protocol, or IP, technology, which transmits voice, video and data in packets like e-mail.
The decision angered companies that serve their residential and business customers with copper lines leased from SBC and other Baby Bell phone companies. They fear the rules adopted for the fiber-optic networks will spill over to the high-capacity copper lines they need, shutting them out if the Bells convert the lines into IP-only networks.
“Today’s action … threatens the availability of competitive services,” said Jason Oxman, general counsel of the Association for Local Telecommunications Services, a Washington-based trade group.
The FCC action puts the big local phone companies in a much stronger position to compete with cable companies for broadband customers, said Jessica Zufolo, telecom analyst for Medley Global Advisors in Washington.
“What the FCC has done today is clear the path to encourage companies to make new investments,” said Lea Ann Champion, an SBC executive in charge of IP operations. As company Chairman Edward E. Whitacre Jr. put it: “The shovel is in the ground, and we are ready to go.”
San Antonio-based SBC, California’s dominant local phone company, said it would spend up to $6 billion to build an IP network reaching 18 million homes in 13 states over the next three years. That would shave two years off its original plans.
BellSouth Corp. said it would step up its investment 40 percent next year by putting 180,000 more homes within reach of its fiber-optic network.
Power companies are expected to boost their investment in broadband as well now that the FCC has set rules on technical standards for doing so.
Only a handful of communities can get broadband over power lines now. The service allows customers to get high-speed Internet service by plugging a computer cord, with an adaptor, into an electrical outlet.
The FCC also cleared certain government communications off a slice of spectrum that commercial cellphone carriers use, giving wireless companies more bandwidth to deploy high-speed services.