Covad Communications Co. (www.covad.com), Rhythms NetConnections Inc. (www.rhythms.net), and NorthPoint Communications Group Inc. (www.northpointcom.com) have signed or arbitrated interim line-sharing agreements with all major ILECs nationwide, according to company representatives.
These decisions were announced June 6, the date by which the FCC (www.fcc.gov) ordered local providers to make line sharing available to the CLECs. The FCC in November 1999 required the ILECs to share existing phone lines with competitive carriers, allowing consumers to use their existing phone line for both voice phone service provided by a LEC, and for high-speed DSL data access through another provider. The ruling is expected to open the door to increased competition, expanded consumer choice, and streamlined service delivery.
And the ball is moving forward. For instance Santa Clara, Calif.-based data CLEC firm Covad, a national broadband service provider utilizing DSL technology, now has signed and/or arbitrated line-sharing deals with every major local exchange carrier from California to New York.
Covad also won a Texas Public Utilities Commission (PUC) (www.puc.texas.gov) arbitration decision implementing line sharing in Texas. Under the PUC's decision, Southwestern Bell (www.swbell.com), a subsidiary of SBC Communications Inc. (www.sbc.com), may charge Covad only an interim recurring loop rate of $0. The PUC's decision is the first in the nation to agree with Covad and other CLECs that the recurring cost of sharing a line is $0, Covad says. GTE Corp. (www.gte.com) already agreed with Covad that the recurring loop rate should be $0.
The Texas PUC also ordered both companies to provision line-shared loops within three days --- a two-day improvement over existing intervals in Texas. If the loops require special conditioning to eliminate electronics that interfere with data transmission, the provisioning time can expand to 10 days.
"We have worked hard to press the case for consumers and businesses, and we have won significant results in Texas," said Dhruv Khanna, executive vice president and general counsel for Covad, in a statement. "The Texas arbitrator's endorsement that the zero-cost loop rate is consistent with the pro-competitive purpose of the Telecommunications Act sends an important message to all phone companies still seeking to extract higher long-term costs.
"In addition," Khanna said, "we were pleased that the arbitrators agreed with us that shared lines can be provisioned faster than the phone companies claimed."
Covad already has an interim line sharing agreement with SBC for California, and is completing negotiations for similar agreements in Texas and the remainder of SBC's territory. Covad also has interim line-sharing agreements with GTE in all of its major markets except Texas, where the PUC's decision will form the basis of its interim agreement there.
Rhythms NetConnections also said this week that it has successfully completed nationwide DSL-based line-sharing tests, signed agreements and is placing orders with the ILECs.
Rhythms, which provides broadband communication services, also expects to support line-shared services in the vast majority of its markets with all of its partners by the end of the year, according to company representatives.
With the successful completion of recent installations with BellSouth Corp. (www.bellsouth.com) and GTE, Rhythms has demonstrated its operational readiness to provide line-shared services with the entire list of regional Bell operating companies and GTE. Rhythms recently struck line-sharing agreements with BellSouth, SBC and GTE. Agreements with US WEST Inc. (www.uswest.com) and Bell Atlantic Corp. (www.bell-atl.com) were signed in April and May, respectively.
"By completing these tests, signing these agreements and placing these orders, we've demonstrated not only the operational and technical capabilities to line share nationwide, but also our commitment to strengthening the competitive environment that ultimately provides more choices and better service to our customers," said Jeffrey Blumenfeld, chief legal officer and general counsel for Rhythms.
Rhythms' announcement follows months of negotiations with the ILECs and hearings before several state commissions regarding line-sharing processes and temporary pricing, Blumenfeld said. Competitive providers, he said, will continue to participate in additional state proceedings to establish certain additional line-sharing processes and permanent pricing.
In the line-sharing agreements, the ILECs agreed to operational and deployment requirements that will allow Rhythms to provide line-shared services on an expedited basis across their territories. Bell Atlantic, BellSouth and GTE also agreed not to assess Rhythms a recurring monthly charge to use a portion of customers' existing voice lines to provide DSL services. Other recurring and non-recurring rates will be subject to true-up once states address line-sharing cost issues.
Nonetheless, the rates and terms contained in the agreements are effective immediately.
"Line sharing will dramatically change the way DSL services are provisioned," said Eric Geis, Rhythms' senior vice president of regulatory affairs and deployment. "We have taken several in a series of steps toward making line-shared services widely available to homes and businesses across the country."
Also this week, BellSouth agreed to share its telephone lines throughout its nine-state region with NorthPoint, a competing broadband services provider based in San Francisco.
The line-sharing agreement --- the second major line-sharing agreement for BellSouth --- calls for BellSouth to provide NorthPoint with access to the high-frequency portion of BellSouth's local telephone lines at interim rates that will be subject to a true-up once a final agreement on pricing is reached between NorthPoint and BellSouth --- or permanent line-sharing prices have been set by state regulators.
"This pro-competitive agreement will speed and broaden availability of high-speed Internet and broadband services throughout our region," said Jere Drummond, vice chairman of BellSouth. "It further underscores BellSouth's commitment to open our network at each of our 1,700 central offices."
The agreement outlines the terms and conditions for NorthPoint's use of the high-frequency portion of the local phone line, allowing voice and data to be transmitted simultaneously over the same line.
BellSouth initially expressed concern that there be sufficient standards developed to prevent the voice portion of a customer's line from being degraded by traffic on the data portion of the line served by a high-speed Internet access provider.
However, the BOC now says that the line-sharing agreements it has signed with CLECs ensure that its voice service won't be adversely affected by a competitor's data service.
Under its agreement with NorthPoint, the CLEC agrees to pay BellSouth interim rates for line-sharing as a UNE. Those rates are subject to a true-up that will come after BellSouth submits cost studies to state commissions that justify the rates BellSouth is charging NorthPoint for line-sharing.
"Line sharing will make DSL-based broadband services more affordable and available to millions of American consumers," said Liz Fetter, NorthPoint's president and CEO. "Combined with NorthPoint's aggressive deployment of g.lite technology … NorthPoint is ideally positioned to take advantage of this major milestone."
NorthPoint's line-sharing agreements with Bell Atlantic, SBC, Bell South, GTE, Sprint and US West provide lower rates for shared local loops that will be less than half the cost of today's stand-alone loops.
Currently, NorthPoint is utilizing line sharing for service in seven markets, including New York and San Francisco. Beginning in the third quarter, the company will offer residential service via line sharing in all of its U.S. markets.
