Will Your Broadband Bill Increase?

WASHINGTON -- Companies relying on DSL lines for broadband service may see prices increase during the next three years after a February U.S. Federal Communications Commission vote governing local phone and broadband network service.

In addition, CIOs doing business with several phone companies nationwide could see the price of local service rise, all because the regional Bells would no longer be required to share their lines at a discount with competitors.

The FCC's vote, required under a May 2002 court order that threw out old FCC rules that were too restrictive, decided how much of the local telephone and broadband networks owned by the regional Bells, such as Verizon Communications and SBC Communications, must be shared with competitors at a discount.

The vote gave most of the responsibility for deciding the rates--at least for local, small business, and residential phone service--to the states.

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Within days, the regional Bells, which wanted fewer pricing regulations and nationwide rules, threatened to take the FCC to court; the issue has already landed there twice since the Telecommunications Act of 1996 established the network-sharing plan. That means the final results are still up in the air.

When all is said and done, most large businesses probably won't see changes in their local phone service because Bell competitors serving the large-business market, such as AT&T, already own their own network facilities. The same is true for companies that use either the Bells or their national competitors, such as Covad Communications, for broadband access.

But companies served by smaller, regional DSL providers without their own facilities may have more difficulty putting together national contracts. And they could see significant price increases, says Darrell McKigney, president of the Small Business Survival Committee.

"This ruling is certainly a threat to competition for small businesses," he adds.