On Aug. 5, the Federal Communications Commission leveled the playing field between DSL and cable modem data services, ruling that both are information services and not subject to common carrier regulation. This decision could have a significant impact on the industry, particularly on some vendors.
But the DSL order is not simply “no regulation for DSL,” because the Telecom Act requires the RBOCs to offer information services out of a separate subsidiary. That subsidiary might share lines or obtain transmission/connection services from the incumbent or regulated part of the RBOC, but the same offer must then be made to competitors. To obtain any meaningful relief from regulation under the order, the RBOCs have to move pretty much all of their DSL infrastructure to a subsidiary.
The good news is that pushing DSL into a subsidiary sidesteps some of the regulatory issues that could have hampered IPTV deployment. The Alcatel/Microsoft solution for IPTV requires special infrastructure modifications in multicasting broadcast TV that might have collided with sharing rules had they been part of a regulated service. Now they aren’t, so this is certainly good for Microsoft and probably good for Alcatel.
The reason it’s only “probably” good for Alcatel is that the order opens a can of worms regarding how DSL and voice now coexist. It also opens up the question of the best DSL architecture for combined data, voice and video. Recall that the FCC’s August “deep fiber” ruling paved the way for major RBOC RFPs for IPTV. What might the new ruling generate? Since we don’t know, we can’t be sure that Alcatel’s offerings will be optimum.
Voice is problem No. 1. Today’s DSL user is almost certain to get voice, as well, and on the same line. This means the regulated voice service and unregulated DSL service have to be joined somewhere, most likely at the place the copper part of the delivery system terminates in a fiber remote or a central office DSL access multiplexer. How does that piece of gear get divided between subsidiary and regulated RBOC? No one really knows. If a single device provides both voice and DSL, some rules for joint ownership of that device, or collocation of unregulated DSL cards in a regulated fiber remote, will be required. Whatever is offered then has to be shared with competitors, so the RBOCs will be looking for creative approaches to minimize their risk, and vendors will be rushing to accommodate them. Alcatel might or might not have the best approach.
In the IPTV area, many vendors, and even the DSL Forum architectures, have focused on an architecture designed for regulated DSL services – which we don’t have anymore. While Alcatel might have taken a risk introducing features such as multicasting into the regulated DSL infrastructure, now that the infrastructure is unregulated it might turn out Alcatel wasn’t aggressive enough.
The big question the order leaves is the status of overlay services, such as VoIP, which are delivered over an Internet connection no matter what company provides it or whether it’s regulated. The FCC said it is adopting a set of principles that will guide how to treat consumer rights, open access to IP services via the Internet and so on. However, the commission didn’t include these principles in the actual order, so they have no legal standing.
Some of the missing details might be provided in the final text of the order, not expected until September. There also is legislation before Congress that would nail the door shut on any appeals to this order and provide some guarantee of consumer rights, such as VoIP over anyone’s Internet connection.
It’s unlikely that all this confusion will hold up DSL deployment, or even IPTV. The simple fact is that the RBOCs have known the direction the wind is blowing for some time and have laid their plans. Competitors such as the interexchange carriers have been bought or marginalized. The FCC finally has reached the goal that former Chairman Michael Powell set years ago: bimodal competition between cable companies and RBOCs. Let’s see whether it works.
