DSL carriers seek free use of phone wires

From...

April 28, 2000
Web posted at: 9:17 a.m. EDT (1317 GMT)

by Tim Greene

(IDG) -- It looks likely that the cost of setting up digital subscriber line circuits will drop thanks to technology known as line sharing.

DSL carrier Rhythms NetConnections has cut an interim deal to use US West phone lines for free when Rhythms sets up DSL phone services in Wisconsin.

While that deal is eye-popping, other carriers have agreed to pay $5.40 per month as the interim price, about a quarter of the $20 to $25 competitive local exchange carriers (CLEC) pay now to use phone lines owned by regional Bell operating companies (RBOC).

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That is a significant saving on a service that retails for $60 or so per month. Carriers could pass the savings on to customers. Whether they will is still up in the air because the final cost of line sharing has not been set yet.

Line sharing is the practice of one carrier running high-speed DSL service on a phone line while a second carrier supplies regular phone service on the same line. CLECs argue that since the lines are already in place and DSL doesn't disrupt the phone service, it costs RBOCs nothing to share the line so CLECs should pay nothing.

The agreement between US West and Rhythms is just good until the end of 2000. After that, Rhythms has to pay $8.25 per month until state regulators set a price for line sharing. Then, depending on the price set, Rhythms will either get a refund or pay US West more for lines it shares.

State regulators around the country are holding hearings to determine what the actual costs are to RBOCs and to set a price in each state that RBOCs are allowed to charge.

Low-cost line sharing should encourage more aggressive DSL deployment because it is a dramatic improvement in the business case for DSL CLECs, says Strategis Group, a networking analysis firm in Washington, D.C.

The Rhythms-US West agreement is more symbolic than concrete because while the companies have agreed to the price, they have not actually agreed to how they will carry out line sharing. Even so, it is a good sign, says Strategis, and there are others.

For example, Bell Atlantic acknowledges in a New York filing that its actual cost of line sharing is zero, a significant admission, according to Dean Hardt, senior counsel for DSL CLEC Covad Communications.

It will be hard for Bell Atlantic to argue for any fee for something that costs them nothing, Hardt says.

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