Will they or won’t they: The FCC and DSL

Speculation continues to swirl that the Federal Communications Commission will deregulate DSL services offered by incumbent telephone companies as early as today, thus removing requirements that telcos open their existing services to other Internet Service Providers.

FCC Chairman Kevin Martin is known to be lobbying his fellow commissioners to try to get either of the two Democrats on the commission – Michael Copps or Jonathan Adelstein – to join him and fellow Republican Kathleen Abernathy in backing the change that would level the playing field between telcos and cable companies but shut out smaller ISPs in the process.

It is widely believed that the delay of yesterday’s planned open meeting was intended to give Martin more time to make his case, although the DSL vote was not listed on today’s agenda.

According to Washington sources, however, the new FCC chairman may face additional opposition on his proposal because of fears it would affect universal service. To remove current line-sharing requirements for DSL, the FCC must classify it as an information service, not a telecommunications service. Doing so would reduce the contributions incumbent telcos have to make to the Universal Service Fund, and that’s a bigger step than even some Republicans may be willing to take.

In addition, ISPs are lobbying for some provisions to either require telcos not to discriminate against or block other service providers.

Harris Miller, president of The Information Technology Association of America (ITAA), a trade group representing several Internet firms, said in a statement that a deregulation move by the FCC would "condemn consumers to higher prices, fewer choices, lower service quality, and reduced innovation.”