DSL Vendors Buck RBOCs Over Fees

FRAMINGHAM (04/28/2000) - Some carriers specializing in digital subscriber line (DSL) have demanded arbitration hearings to determine a fair price for sharing phone lines with local telephone companies.

Rhythms NetConnections last week filed for arbitration in seven key states hoping to speed the process of setting rates for the technology known as line sharing, which allows one company to provide telephone service on a copper line while another company provides DSL service on the same line without interference.

Once implemented, line sharing will mean faster installation times for new DSL services and could generate cost savings for customers, according to carriers.

The Federal Communications Commission is calling for GTE Corp. and regional Bell operating companies, which also offer DSL services, to negotiate line-sharing agreements with their DSL competitors by June 6.

RBOCs seem to want to meet that goal, but differences still remain, according to Christine Mailloux, assistant general counsel for DSL specialists Northpoint Communications.

The differences have led to a joint arbitration hearing between DSL competitors and Pacific Bell Corp. in California. Earlier, Covad Communications Co. filed for arbitration in four other states. Northpoint says it may file later. US West Inc. has come to an interim agreement with all the DSL providers, and Covad last week reached agreement with BellSouth Corp.

At issue is the fee DSL providers must pay to RBOCs, which own the phone lines.

DSLproviders contend there should be no monthly fee for sharing a line because it costs an RBOC nothing.

DSLproviders accept that RBOCs will charge an initial fee for setting up line-sharing connections. But they contend the connections should cost no more than what they cost when RBOCs lease them separate lines for DSL services.

Rhythms General Counsel Jeff Blumenfeld says some RBOCs are proposing one-time costs for line sharing that are higher than the one-time costs of setting up separate lines.

Once DSL carriers negotiate or arbitrate deals with RBOCs and GTE, they can start offering DSL services based on line sharing.

States will still have to hold hearings and set official line-sharing rates that carriers must pay in each state. The official rates will take longer to set but will override the deals carriers made earlier.

"No state has set a final rate yet. Everyone knows they have to do this, but the devil is in the details," says Covad Senior Counsel Clay Deahardt.

Covad: www.covad.com; Rhythms: www.rhythms.com; Northpoint: www.northpoint.com

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