* Decisions might drive more ISP wholesale business toward facilities-based DSL providers
Despite forecasts of impending ISP doom, Internet access providers might actually benefit from two recent broadband decisions.
Respective rulings by the FCC and the Supreme Court that DSL and cable modem services are information services exempt from telecommunications regulation could indeed boot some ISPs off these facilities or raise their access fees significantly. But it might also prompt them to explore last-mile bypass alternatives such as wireless and broadband over power line (BPL) to serve their Internet access customers.
The decisions might also drive more ISP wholesale business toward facilities-based DSL providers, like Covad, which could entice migration through attractive pricing incentives.
Either way, the rulings could disrupt enterprise users who tether in remote workers to corporate VPNs via DSL or cable modem service by making connectivity more expensive, or by requiring a change in service provider or underlying access technology.
One large ISP that’s feeling the pinch is Earthlink. Earthlink provides DSL service to 1.5 million customers over local exchange carrier (LEC) loops and cable TV facilities. In a statement following the FCC’s Aug. 5 decision, Earthlink said it is “confident that we will extend our existing commercial agreements with the Bells so that we can continue to deliver DSL services.”
The ISP also said it will continue to work with its cable partners and explore next-generation broadband alternatives, and the FCC to offer consumers “an expanding line of competitive advanced communications services and applications as the FCC phases out the regulatory framework now governing DSL service.”
Earthlink will begin a market trial in October with Covad for bundled voice and data services. The trial, designed to provide “an affordable alternative” to the local phone companies for voice and broadband Internet access, will take place in four markets: Dallas, San Francisco, San Jose and Seattle.
Covad stands to benefit specifically from the FCC ruling.
“It’s pretty obvious that Covad is the only national broadband provider out there, and we are going to continue to provide access to Internet service providers,” says Susan Jin Davis, Covad vice president for Government and External Affairs. “I think it would make us more attractive.”
Davis mentioned that Covad is also upgrading its DSLAMs to support video. This would enable Covad to offer ISPs a “triple play” bundle of voice, data and video with which to compete against the incumbent LECs and cable companies.
