Hoping to give local phone companies more incentive to offer high-speed Internet connections, the Federal Communications Commission on Thursday proposed lifting the requirement that once the technology is in place, local companies must let competitors buy access to it at a discount.
The five FCC commissioners voted to offer for public comment a plan allowing the so-called Baby Bell companies and GTE Corp. to establish subsidiaries to build high-speed networks that would provide Internet access and other data transmission services for homes and small businesses.
Such networks are vital to development of electronic commerce, said FCC Chairman William Kennard. The plan “is intended to accelerate the deployment of advanced telecommunications services to all Americans,” he said.
By easing rules requiring the local phone companies to resell access to the high-speed lines at a discount to their competitors, the FCC hopes to give them the economic incentive to make the costly investment in building the networks.
The FCC declined, however, to waive the ban on offering long-distance service for data transmissions, as the Bells had requested.
The final plan could be endorsed by the FCC before the end of this year.
Although many regard the FCC action as a partial victory for dominant local phone companies, some of those firms disagree.
An executive for U S West Corp., based in Denver, said that the requirement for a separate subsidiary to supply high-speed data services was a deal-breaker for his firm.
Not so for Chicago-based Ameritech Corp., which had no objection to the requirement. Ameritech already has decided to provide data service through a separate company.
Ameritech Chairman Richard C. Notebaert said launching a new service through a subsidiary helps the company monitor the financial performance of the new product offering.
Just the same, the FCC’s action doesn’t seem likely to speed up the rollout of high-speed Internet service to Chicago-area neighborhoods.
Ameritech executives said late last year they planned to begin to offer the service in some parts of the Chicago region this summer.
But so far, Wheaton has been the only community to receive the service.
The FCC’s action is sure to stir a storm of opposition, especially from long-distance carriers such as MCI Communications Corp. and AT&T Corp.
Competitors to dominant local phone companies contend that in the next few years, the bulk of telephone business will shift to high-speed data services.
If regulation of this sphere is loosened for the dominant local phone firms, the competitors say, they will use their market power to establish monopolies in this important new service.
