Sources: Line sharing issue is pawn in FCC game

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[b]Sources: Line sharing issue is pawn in FCC game[/b]
[font=\"Arial\"][i]WASHINGTON--Regulations that would allow telephone companies to lease lines from the big local carriers for high-speed Internet service are caught in a high-stakes fight before U.S. communications regulators, sources familiar with the matter said on Wednesday.[/i]

A majority of the Federal Communications Commission has previously supported allowing carriers to lease lines from the big local phone companies, known as the Baby Bells, so they can offer consumers an alternative high-speed Internet service.

FCC Chairman Michael Powell has pushed to revive so-called line sharing after he lost a battle almost two years ago and the agency voted to phase it out. He has also been a big backer of high-speed Internet services--broadband--to boost innovation.

But language to resurrect line sharing has been left out of pending broader regulations on telephone network leasing that were drafted under the direction of the chairman, the sources said, declining further identification.

FCC and industry sources said they had expected to see it included in those regulations but now see line sharing as a bargaining chip while the commissioners wrangle over the final details of the broader rules.

The agency is slated to vote on the regulations on Dec. 15. In the interim, the FCC commissioners could seek changes, as well as lobby to include or drop others.

The broader rules would eliminate low lease rates for the competitors that offer residential consumers local telephone service and require them to shift the existing 18 million customers to their own facilities within six months or likely face price increases, the sources said.

AT&T and MCI have already ceased aggressively seeking new residential customers because of the FCC's planned changes to the leasing rules.

However, the FCC draft order would preserve some low prices for Bell rivals that serve small and medium-sized businesses in urban areas where there were already some competitors operating, the sources said.

But those provisions could change as well, they said.

[b]Lobbying for line sharing[/b]
Telephone carriers like Covad Communications Group have lobbied the FCC to bring back line sharing. In the interim, Covad has signed private commercial deals for line sharing with three of the four Bells.

Many rural carriers also have used line sharing to offer consumers broadband while the Bell provides voice service.

Jason Oxman, general counsel for the Association for Local Telecommunications Services, said the FCC commissioners have made known their preference on line sharing in recent weeks.

"It would be remarkable if the commissioners did not reach a policy accord on the issue in this proceeding," he said.

Representatives for Powell did not immediately return calls seeking comment. Other commission offices declined to comment.

If either the Bells or their competitors were unhappy with the new rules, the issue could once again end up in court, where previous regulations have been struck down three times.

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