FCC Reclassifies DSL Service To Spur CompetitionFCC Reclassifies DSL Service To Spur Competition

The FCC is changing how it regulates telephone-based broadband services to encourage local telephone companies and other providers to deploy broadband services more quickly.

The FCC will reclassify high-speed Internet access services offered over telephone facilities--until now classified as telecommunications services--as information services, which it regulates with a lighter hand. The reclassification applies to what the FCC calls telephone-based broadband services, or digital subscriber line services offered by local phone companies or by rivals that lease elements of the local phone companies' networks to provide their own DSL offerings.

The FCC says its goals are to promote DSL availability to all Americans, spur competition, boost investment and innovation by ensuring the services are minimally regulated, and to apply, as much as possible, a consistent regulatory framework to broadband services. The policy shift suggests the FCC believes the most viable DSL alternatives are cable modem and satellite services.

Not everyone, including DSL customer Charlie Northend, agrees. "The best way to encourage deployment of high-speed access is through competition," especially by more than one DSL provider, since most business customers are more comfortable with services such as DSL that use existing phone wires, says Northend, president of advertising agency Diamond, Morgan, Northend, Albers Inc. in Palo Alto, Calif. "It's not that big a leap to plug into a phone jack in the wall for broadband services, but it's a bigger leap to set up a cable modem or install a satellite dish," for the same types of services, he says.

Yet to be determined is whether the FCC will modify or drop the network-access requirements that now apply to DSL; whether DSL services will be subject to national-security, network-reliability, and consumer-protection obligations typically applied to conventional phone services; and how the FCC will coordinate its approach with state regulators. Also undetermined is whether DSL providers will have to contribute money to the FCC's fund for universal telephone service.