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FCC to Act on Fiber-Optic Networks

Proposal Would Loosen Rules for Phone Companies

By Christopher Stern
Washington Post Staff Writer
Thursday, October 14, 2004; Page E05

The Federal Communications Commission is planning to approve today a proposal to give the major telephone companies more leeway in the design of new fiber-optic networks, sparing them from the regulation that governs traditional phone lines.

Under current rules, fiber networks are not subject to the same regulations as existing copper phone lines if they are used to connect homes in new neighborhoods, a policy pushed by the FCC to spur investment in the high-speed lines.

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The agency is prepared to grant a request by BellSouth Corp. to allow it to operate under the same deregulatory framework if it establishes fiber networks within 500 feet of a home, using copper wires to complete the connection.

The design, BellSouth argues, would allow it to connect several homes to one fiber optic line, saving more than $1,000 per home. The relatively short run of copper wires should be robust enough to carry phone and high-speed Internet service as well as hundreds of television channels, the company said.

In most areas, BellSouth would still be required to allow competitors to offer voice service over its network, as it must now do under FCC rules. However, the company would no longer be required to open its network to competing Internet service providers. And in newly constructed neighborhoods, the regional phone companies would not be required to give competitors access to any part of their networks.

Some competitors, particularly those that focus on the small-business market, worry that the pending decision could cut them off from their customers. But an FCC official, who spoke on the condition of anonymity because the vote is not yet final, said the new policy would focus only on the residential market.

The decision is the latest attempt by the FCC to revise rules that have been the subject of debate and litigation for almost a decade. Under FCC Chairman Michael K. Powell, the agency is promoting policies aimed at developing competition between companies that own their networks -- such as cable companies and telephone companies. It is a break with a long-standing approach that fostered competition by allowing competitors to lease parts of the dominant telephone companies' networks.


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