Covad Bends Commissioner Martin's Ear

[Dave Farber <dave () farber net>]

------ Forwarded Message
From: "Robert J. Berger" <rberger () ibd com>
Date: Thu, 17 Apr 2003 16:59:31 -0700

Covad Bends Commissioner Martin's Ear
http://www.lightreading.com/boardwatch/document.asp?doc_id=31345

A glimmer of hope for ISPs that feel threatened by the Feb 20 ruling on
broadband regulations by the Federal Communications Commission (FCC) has
arisen from a meeting held at the end of March between Kevin Martin, a key
FCC Commissioner, and executives of Covad Communications Inc. (OTC: COVD), a
major provider of broadband services.

The meeting has raised hopes in some quarters that the FCC could still
change its mind on significant aspects of the proposed regulations -- a
possibility, because the full and formal ruling has yet to be published.

The fact that Martin requested the meeting seems particularly significant,
because Martin is the only FCC Commissioner to have gotten his way with
every aspect of the Feb 20 ruling (see FCC's Martin: Ruling 'Balanced').

It¹s also significant that this meeting was pretty much a special case. It¹s
not one of dozens of meetings with lobby groups, according to the FCC.

To recap, on Feb 20, the FCC announced a decision that four regional Bell
operators in the U.S. -- BellSouth Corp. (NYSE: BLS), Qwest Communications
International Inc. (NYSE: Q), SBC Communications Inc. (NYSE: SBC), and
Verizon Communications Inc. (NYSE: VZ) -- should no longer be obliged to
provide competitors with cheap line-sharing access to their broadband
networks. That decision, regarded by many in the U.S. telecom industry as a
death knell for ISPs that rely on cheap access to the RBOCs' networks, was
made on a three-to-two vote by the five FCC commissioners (see FCC Rules on
Regulations and Powell Loses FCC Vote).

However, it seems that position may be softened, and that decisions
regarding the regulation of broadband line sharing may be handed to the
individual states when the final and binding ruling is published. The states
are already set to make their own decisions on the Unbundled Network Element
Platform (UNE-P) issue, regarding competitive carrier access to the RBOCs'
networks for local voice service.

The meeting between Martin and Covad was the result of submissions made to
the FCC by Covad, in which the broadband service provider's vice president
and assistant general counsel, Jason Oxman, submitted that "the FCC's
decision to eliminate linesharing in the name of promoting investment
incentives appears to have been a grave and unnecessary error." Covad
encouraged the FCC to consider a "specific state role" for implementation of
the linesharing decision.

Covad spokesman Ed Mattix confirms a meeting has taken place with the FCC.
"There's always hope that the FCC will soften the blow, and we're hoping for
some improvement on what was announced [on February 20], but we won't know
anything and can't comment until the final ruling is made," he tells
Boardwatch. "It doesn't do any good to speculate on these matters."

Commissioner Martin could not be reached as we went to press.

So what are the chances that competitive carriers may be granted a
line-sharing reprieve by individual state regulators? Sue Ashdown, president
of the American ISP Association (AISPA), believes "it's more likely that
state jurisdiction over linesharing would be achieved in court, rather than
in the text of the order. But until we see [the final order], anything's
theoretically possible."

However, she says, "The chances are good that the decision would be handed
back to the states on appeal. What ISPs need to understand is that if that
happens, they need to be vocal with their state commissions about retaining
linesharing, otherwise it won't mean much."

While the original announcement was made on February 20, the FCC still has
to publish in detail its final and binding decision in a document expected
to run to 400 pages. The final ruling, which would be entered into the
Federal Register, is due in the next few weeks.

But when would the new regulations come into effect? "Once the rules are
released there will be a time period, approximately 30 to 45 days, before
those rules become effective," says FCC spokesman Michael Balmoris.
"Depending on the particular rule, there are different phase-in or phase-out
time periods. For line sharing, that won't be clear until the rules are
released."

Do you think the FCC might change its original decision? Let us know what
you think by emailing Boardwatch at greatdebate () lightreading com.

‹ Ray Le Maistre, Editor, and Jo Maitland, Senior Editor, Boardwatch

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