BUNGLED BUNDLING

Just when the Bell companies are finding ways to make broadband pay off through bundled offers (as evidenced by lower prices for bundled DSL from some RBOCs), their competitors are trying to regulate them away. In response to a complaint filed by Telscape, a CLEC based on the West Coast, the California Public Utilities Commission is considering hearings to debate whether SBC Communications should be able to deny DSL service to customers who switch to other providers for voice service. AT&T California President Ken McNeely urged the regulators on, telling the Sacramento Bee that SBC was “using DSL as a straightjacket.” And with WorldCom's support, a Louisiana bill approved in December now prevents SBC from denying DSL to defecting voice customers. It's unfair, especially considering DSL's low-profit legacy. Should casinos be forced to give free drinks to folks who gawk instead of gamble? No. Bundling DSL with voice is not anti-competitive; it's ultra-competitive. There are some cases — such as rural telephony and UNE-P — in which carriers should be forced in less profitable directions. But they pertain to voice services, not DSL. And there's a big difference between carriers' obligation to deliver lifeline telephony service and their obligation to deliver pirated music and pornography. If CLECs want to win market share, let them come up with their own bundled offers. Instead of using regulators to fight their battles, they should focus on building a better straightjacket.