FCC seeks to boost high-speed Internet service

Thursday, November 18th 1999, 12:00 am
By: News On 6

WASHINGTON (AP) -- Hoping to accelerate the spread of high-speed home Internet connections, federal regulators voted Thursday to require telephone companies to share their lines with other businesses offering data services. The Federal Communications Commission decision could ultimately mean more competition in consumer choices for high-speed Internet service and at lower costs, officials said.

"Prices should decline, services should improve," declared FCC Commissioner Susan Ness. The decision could make it substantially cheaper for upstart businesses to compete with telephone companies in providing
connections dozens of times faster than today's dial-up modems.

Currently, local telephone companies, such as the regional Bells and GTE, can offer high-speed Internet services to subscribers on
the same lines they provide their regular voice service. But for outside businesses to come in and sell Internet connections to a consumer, they must buy a second line from the
telephone company into the consumer's home.

That means businesses c spend about $20 to $23 for each second line. And customers who
want different providers for their voice and data services need to have two lines at home. Newer data companies say the FCC decision will help put them on a competitive equal footing.

"The FCC is really going to unleash all the benefits of competition for residential users," said Michael Olsen, deputy general counsel of NorthPoint Communications, which provides data services mostly to businesses. The company plans to boost its marketing next year by setting up kiosks at Radio Shack so
consumers can sample the high-speed connections.

Dhruv Khanna, general counsel of Covad Communications Inc., said his company hopes to offer high-speed connections at less than $40
a month because of the decision.

After the vote, FCC Chairman Bill Kennard said the agency would monitor the market to ensure residential customers benefit. Local telephone companies balked at the decision, saying the market already is competitive and shouldn't be regulated any further.

"These companies are in no way 'impaired' by current arrangements and are already doing very well in the marketplace," said Bruce Posey, U S West's senior vice president for federal relations and regulatory law.

Local telephone companies also have expressed concern that if a consumer has a problem placing a call, companies will have to
determine which service is responsible. The FCC requirement goes into effect 30 days after it is published in the Federal Register. Companies will then have to hammer out pricing agreements for the cost of splitting the line. If they are unable to do so, the parties could go to state regulators for arbitration.