WASHINGTON, DC – The Federal Communications Commission (FCC) unanimously voted to ease regulations on phone companies’ high-speed internet services last Friday, a decision that was applauded by various Bell phone companies, but not as well received by consumer advocacy groups.The FCC voted 4-0 to reclassify digital subscriber lines (DSL) as an “information service,” which is far less regulated a class than a traditional phone service.
One effect of the change is that government will no longer require phone companies to lease high-speed lines at regulated rates to competing internet service providers, like EarthLink Inc. and similar independent ISPs.
Gene Kimmelman, public policy director at Consumers Union, said in a statement that the change would drive independent broadband providers out of business and result in higher prices for consumers.
“The Federal Communications Commission continues down the wrong path on deregulation, allowing giant phone companies to tighten their stranglehold on competition, stifle innovation, and reach even deeper into the pockets of consumers,” Kimmelman said.
BellSouth vice president Herschel Abbott, however, issued a statement saying FCC Chairman Kevin Martin “should be widely applauded for pushing to completion these sweeping changes.”
Martin also predicted reduced regulation would encourage broadband competition, possibly leading to more people having access to broadband internet, and a decline in prices.
The decision followed days of lengthy negotiation sessions between the FCC’s two Republican members, Martin and Kathleen Abernathy, and its two Democrats, Michael Copps and Jonathan Adelstein.
One compromise concluded that phone and cable companies should allow subscribers to use the internet any way they wish, and another requires that, for 270 days, DSL providers must continue to contribute to the Universal Service Fund, which provides subsidies for rural phone service. The 9 month period will give regulators an opportunity to develop a broader reform of the subsidy system.
Copps said such compromises were the best option, and added that “the handwriting is on the wall. DSL will be reclassified whether I agree or don’t agree.”
The FCC’s move amounts to “an explicit recognition” that the telecommunications business “is vastly different than the one governed by regulators over the last 30 years,” Martin said.
