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FCC loosens fiber broadband regulations

New rules approved Thursday aim to make high-speed Internet available to more Americans, but critics complain move will hinder competition.
/ Source: The Associated Press

Federal regulators approved new rules Thursday aimed at making high-speed Internet available to more Americans -- but critics complained the move will hinder competition in broadband services and keep prices high.

The Federal Communications Commission gave its blessing to a proposal that lets the major regional phone companies build fiber-optic networks to within 500 feet of a customer's home without requiring the companies to share their networks with competitors.

Currently, the former Baby Bell companies don't have to lease their networks for fiber that is installed directly to the home. The new rule extends that regulation to within 500 feet of a residence.

BellSouth requested the change so it could build networks to just outside a customer's home and reach more residences at once -- rather than having to lay down fiber to each household. In a statement, the company said the decision would bring broadband service to more consumers, more quickly.

Three members of the Federal Communications Commission approved the plan in whole, while a fourth agreed to some parts and objected to others. Commissioner Michael Copps, a Democrat, voted against the rules.

Copps said loosening the rules for the major phone companies keeps smaller players from getting into the market. The agency is “returning to the failed and noncompetitive policies of the past,” he said.

AT&T vice president for law and director of government affairs, Len Cali, said the FCC’s order was unclear and that “the inevitable grab by the Bells to expand their monopoly does not bode well for telecom users, industry investment, or the economy as a whole.”

SBC Communications Inc. said it would accelerate its plan to build new neighborhood fiber-optics networks. As a result, planned deployment for broadband could take two years or three years instead of five years.

On Wall Street, fiber-optic equipment makers gained ground. Ciena Corp. rose 5 cents to close at $2.16; JDS Uniphase Corp. was up 4 cents, to $3.25; France’s Alcatel closed up 8 cents, to $12.42.

Stock prices in the regional Bells fell on the news they would be spending money faster than planned. BellSouth Corp. was down 10 cents to $27.93. Shares of Verizon Communications Inc., which has long said it planned a multibillion-dollar broadband deployment, fell 30 cents to close at $40.77. SBC Communications Inc. fell 28 cents to close at $26.35.

Separately, the commission voted to set ground rules for a different type of high-speed Internet access — broadband over power lines, known as BPL.

This technology is still in its infancy, with only a handful of companies offering broadband over electric power lines to fewer than 5,000 customers nationwide. The transmissions, however, can cause interference with ham radio operators who have complained loudly to the FCC.

The agency said its rules would limit interference by BPL providers by using devices that would skip frequencies the amateur radio operators use.

“We’re viewing this with some skepticism,” said David Sumner, chief executive officer of the American Radio Relay League, an organization of ham operators. Sumner said he is concerned there will still be interference problems despite the FCC rules.

The group estimates there are 680,000 ham radio operators in the United States.