Appeals Court upholds decision to end required line-sharing
In a decision sure to have repercussions amongst independent DSL providers, the United States Court of Appeals for the Third Circuit has decided to uphold the FCC’s decision to partially deregulate DSL-based internet services.
The FCC’s “Wireline Broadband Reclassification Order” – which was originally enacted in September of 2005 – categorizes DSL as a discrete “information service,” exempting it from the line-sharing and fair-competition provisions of the Telecommunications Act of 1996, of which it was previously bound.
Previously, DSL internet service – and cable modem service before it – was classified as a functionally integrated component of enhanced “telecommunications service,” making it subject to regulations that attempted to ensure fair and open competition. Some of these rules require that the main telecom provider – owner of the physical lines and equipment, or “common carrier transmission facilities” – grant “unaffiliated ISPs” access to the telcos’ facilities for the purposes of reselling their “enhancements.”
The old rules gave rise to numerous independent, regional, and specialty DSL providers, including Speakeasy and Earthlink.
Under the new rules, independent ISPs aren’t completely shut out. There’s nothing stopping the facilities owner, known formally as the “local exchange carrier” (LEC), from continuing to resell their services. However, there’s also nothing legally compelling the LECs to continue providing resale services either. As a result, independent ISPs have far less leverage in their negotiations and may find themselves subjected to the whims and preferences of the LECs of the services they resell, which some predict will lead to higher costs and a lower quality of service.
One of the chief arguments that eventually led to appeals court was that the FCC’s order was inconsistent with its prior decisions. The appeals court found (PDF) this argument to be meritless and further determined that the FCC’s orders were consistent given prior context, and fully compliant with its duties as outlined in the Telecommunications Act.
Supporters of the decision called the regulations “outdated”, and claimed that they did not fit the demands of current technology, in addition to stifling investment and keeping costs prohibitively high.
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