- The Washington Times - Saturday, August 13, 2005

As the new chairman of the Federal Communications Commission, Kevin J. Martin has scored an early victory that could help give more Americans access to high-speed Internet. The commission voted recently to drop a regulatory requirement on telephone companies to lease out their high-speed digital subscriber line (DSL) Internet networks to competitors at government-set and below-market prices. That archaic rule prevented the so-called Baby Bells from laying new DSL networks, since their competitors would benefit from that expansion.

Some consumer advocates are concerned that an expansion would bring sharply higher rates for high-speed connections. That scenario seems unlikely. Telephone companies already face considerable competition from cable companies, which currently dominate the high-speed market. As the Baby Bells expand their networks, cable operators will face more competition from the phone companies, particularly if Congress and the FCC eventually clear the way for phone companies to offer video services. As the phone companies expand their networks and begin offering packages of telephone, Internet and pay-for-TV services, cable operators will begin to feel some price pressure.

Also, both the phone and cable companies face competition from providers of wireless Internet. Furthermore, the Baby Bells, such as Verizon and SBC, have a market interest in continuing to lease out networks. The two companies have a significant wholesale business selling DSL to other Internet providers.

The FCC decision will help level the regulatory playing field between cable operators and telephone companies. A June Supreme Court ruling in the case of FCC v. Brand X Internet said that cable companies were not required to lease out their high-speed Internet infrastructure to competitors. The Aug. 5 decision established regulatory parity for the phone companies.

The four commissioners voted unanimously in favor of the new rule. Mr. Martin was able to win the backing of the two Democratic commissioners. There is one vacant seat on the commission, which Mr. Martin will surely fill with a Republican. The Republicans will then have a majority and will be in a good position to continue deregulating the industry.

The FCC also adopted a policy statement (not yet a rule) that says users of the Internet are entitled to access the “lawful Internet content of their choice.” That is a step in the right direction. When the commission makes that policy a rule, though, it should be worded so that service providers can neither block nor slow surfers’ access to Web sites.

The FCC and Congress should continue revamping how providers of Internet, voice and video services should be regulated, opening the way for rates to be checked by market competition rather than government regulation. Such an approach will encourage both innovation and investment.

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