The Federal Communications Commission ruled Friday that telecoms need not share their lines with other Internet DSL providers. The decision came less than two months after the U.S. Supreme Court ruled
in a separate case that cable companies don't have to allow rival broadband carriers access to their lines.
While the FCC's move is seen as positioning telecoms to better compete with cable
companies, it's also viewed as setting up the potential for duopolies between telecoms and cable companies. Some fear that players such as EarthLink and America Online could be forced out of the
market.
The FCC claimed that the new provisions "will enable wireline broadband Internet access providers to respond quickly to consumer demand with efficient, innovative services and spur more
vigorous head-to-head competition with broadband services provided over other platforms," in a statement released Friday. FCC Chairman Kevin J. Martin similarly issued a statement praising the new
rule for ending the "regulatory inequities" between cable and telephone companies.
Carol Mattey, former deputy chief of the FCC's Wireline Competition Bureau, likewise hailed the rule change,
saying that relieving telecoms of government-imposed obligations will free up their budgets for investment in high-speed Web services. "All regulation imposes a cost on how you do business," said
Mattey, now a consultant with Deloitte & Touche. Now, she said, telecoms will have "more money to invest in broadband."
But currently, high-speed access through DSL tends to be cheaper than
through cable modems. And while cable still accounts for around two-thirds of at-home broadband connections, DSL usage has been growing at a fast clip; last year, it accounted for almost half of all
new household broadband connections, according to a Jupiter Research study released in May.
Now, some fear that DSL prices could rise, as a result of fewer potential competitors. "At least one of
the things putting pressure on phone companies to keep DSL costs low is going to go away," Joe Laszlo, an analyst with Jupiter Research, said.
But, he added, consumer advocates still can pursue
whether telecoms are violating antitrust laws or other regulatory measures, should it turn out that DSL prices start rising in lockstep with the cost of cable broadband.