WASHINGTON (AFX) - Federal regulators on Thursday gave the go-ahead to a new
technology that enables powerlines to offer Internet access. They also
adopted
a
rule that makes it easier for the Bell local phone companies to replace
their
copper wires with fiber.

Michael Powell, the Republican chairman of the Federal Communications
Commission, said the rules are aimed at speeding up the construction of
high-
speed networks.

His point was illustrated shortly after the FCC vote, when SBC
Communications
said it would "dramatically" speed up its plan to construct a fiber-based
network that reaches 18 million households.

Yet critics such as FCC Commissioner Michael Copps, a Democrat, argue the
new
rules will limit competition, keep prices unnecessarily high and confuse
investors.

Electric issue
The power line decision was meant to address concerns about interference.
The
FCC set specific rules for power companies on how to avoid interference,
especially with amateur radio operators.

The agency avoided the imposition of stricter rules regarding emergency 911,
disability access and contributions to universal service, a fund that
subsidizes
phone service in areas where it is expensive to deliver.

"By crafting a minimal regulatory framework," Powell said, the FCC is
advancing
a pro-competition agenda that will make high-speed Internet access a reality
for
almost every American. He noted that power lines go into nearly every U.S.
home.
Copps, who partly dissented with the decision, argued that the FCC's failure
to
address the stickier issues might actually hinder growth of powerline
technology. He said the threat of future regulation may make investors leery
of
getting involved.

"If we want investment in broadband over power line, we need certainty and
predictability," he said.

Fiber rules
Copps also objected to a new rule that exempts fiber "loops" in all
residential
neighborhoods from an FCC requirement that guarantees open access to
competing
Internet service providers.

The local loop is the mass of wires that extend from the nearest central
switching office of a local phone company to the homes and businesses it
serves.
The new exemption only applies to high-speed Internet service delivered by
fiber
connections to homes. It expands on a prior rule that exempted new
residential
developments hooked up with fiber.

Yet network operators still have to let rivals use copper and fiber wires to
sell regular phone service to consumers. That rule stems from a major 1996
law
whose aim was to foster competition in the local phone market.

Still, the vote reflects a big victory for the Bells. They have argued that
there's little incentive to spend big bucks to replace copper with fiber if
rivals can use those fiber connections as well. Fiber offers much greater
Internet speeds and the promise of new services such as pay TV over phone
lines.

The three Republicans on the five-member FCC board proved sympathetic to
that
argument. They say fiber loops ought to be exempted so investment won't get
stifled.

Still, the FCC board did require the local carriers to ensure that the fiber
loops extend to within 500 feet of residential homes.

Industry reaction
Copps and fellow Democrat Jonathan Adelstein said the rule is a setback to
competition.
"The local loop represents the prized last mile of communications," Copps
said.
"Putting it beyond the reach of competitors can only entrench incumbents who
already hold sway."

Consumer groups also blasted the decision.
"The FCC today took our country one giant step closer toward solidifying a
two-
company domination -- the local cable and telephone providers -- over the
consumer Internet market," said Gene Kimmelman, senior policy director of

Consumers Union.
The Bells, on the other hand, reacted with jubilation. Shortly after the FCC
vote, SBC said it will "dramatically accelerate" plans to build a
fiber-based
network "in two to three years rather than five years as previously
announced."
The fiber would replace copper in many parts of the network and offer the
promise of "super high-speed data, video and voice services," SBC said.

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