The line sharing skinny

The advertising slogan "You've come a long way baby" might be appropriate for the progress competitive local exchange carriers have made to gain access to incumbent copper assets without installing their own lines. But despite how far things have come, many CLECs still insist their battles with incumbents are far from over.

Earlier this year, the FCC demanded that competitive and incumbent providers ink line sharing deals by June 6. Some struck deals early such as Rhythms NetConnections and U S West, although in exchange for more favorable terms, Rhythms gave up its crusade to block the Qwest Communications/U S West merger.

As of June 6, Covad Communications, NorthPoint Communications and Rhythms set up interim line sharing agreements with BellSouth, Bell Atlantic, GTE, SBC Communications and U S West. Several of the interim deals involved no charges for shared lines, although the "interim" part could come back to haunt the CLECs. Because most states have yet to determine the cost of their individual line sharing rates, the competitive providers will be forced to pay the difference retroactively once the rates are set.

Texas and New York public utility commissions have issued orders saying that they agree that a zero-dollar line rate is appropriate, said Rob McMillin, director of interconnection services for New Edge Networks, which is concentrating on Tier 2 and Tier 3 markets. California apparently has not agreed to a zero-dollar line rate, McMillin said. "Minnesota was on the forefront of the line sharing rates, but it, too, has yet to set a rate," he added.

So far, New Edge has forged deals with BellSouth, GTE and U S West, although U S West was unwilling to agree to no cost for the shared loop with the provider. The RBOC charges New Edge an interim price of $5.40 per line.

"No one can touch our pricing and the fact that we can put everything on one bill," said Kevin Krull, vice president and general manager of U S West consumer services. "Any time you resell network assets, you would assume the owner of those assets would have some sort of advantage."

But the incumbent advantage is not limited to line ownership, McMillin said. "Even if we do get a zero-dollar price, [incumbents] still have an advantage over us because of the high [co-location] costs they have imposed on us," he said. "They will continue to have that price advantage."

The FCC-imposed deadline only required incumbents to develop basic agreements, McMillin said. "The June 6 deadline was really meaningless to the LECs," he said. "We wanted to start placing orders by [June] 6, but in reality, that's not going to happen."

While line sharing is intended to level the playing field for incumbents and CLECs, other issues linger. The rollout and implementation of the agreements could be difficult, said Eric Moyer, director of product marketing for Covad. "The stage of progress really depends upon the cooperation of the LEC. It really varies by each ILEC, with some being better than others," he said.

Other issues remain, such as the time it takes to turn up a line, which entity has control over the splitter and which entity pays for costs associated with conditioning lines for service. The devil is in the details, and many of those have yet to be ironed out, Moyer added.

U S West has a longer installation interval than some other incumbents, which causes the CLECs to suffer, McMillin said.

With the deadline behind them, CLECs now are focused on ensuring that the incumbents follow the mandate, Moyer said. "We have to make sure they don't just drag their feet."

That task could be formidable. "They will slow roll us until they are ready," McMillin added.