For anyone who hasn't already heard the news. This is a bummer!!
F.C.C. Clears Internet Access by Power Lines
By STEPHEN LABATON
ASHINGTON, Oct. 14 - Clearing the way for homes and businesses to receive
high-speed Internet services through their electrical outlets, the Federal
Communications Commission adopted rules on Thursday that would enable the
utility companies to offer an alternative to the broadband communications
services now provided by cable and phone companies.
As a further spur to the rollout of broadband Internet services, the F.C.C.
also ruled that the regional Bell companies do not have to give competitors
access to fiber optic lines that reach into consumers' home - a decision that
prompted two of the Bells, SBC Communications and BellSouth, to announce that
they would move quickly to build new fiber optic networks in residential
neighborhoods. The ruling was criticized by rivals of the Bells and consumer
groups, which called it anticompetitive and said it would lead to higher prices.
For the electric companies' part, broadband Internet service is more than a
year away from becoming widely available. But the agency's ruling is expected
to increase significantly the level of investment and interest by the
utilities, which had been stymied in previous attempts to offer new services
over power lines. They reach more American homes than either telephone lines or
television cables.
So far, the technology has been limited mainly to experiments around the
country, although a commercial version recently became available in some
communities near Cincinnati.
"Today is a banner day, and I think years from now we will look back and see it
as an historical day for us,'' said Michael K. Powell, the F.C.C. chairman.
"This is groundbreaking stuff.''
Known as broadband over power lines, or B.P.L., the technology uses a special
modem that plugs into electrical outlets. So far, it has been offered at speeds
of 1 to 3 megabits a second, which is comparable to broadband service over
cable modems or conventional phone lines - though not as fast as the 5 megabits
a second achievable through the residential fiber optic lines just now being
introduced by the Bell companies.
An obstacle to the use of power lines to carry communications traffic has been
the electromagnetic interference the technology can cause to various types of
radio signals. The commission ruled that it would tolerate a small amount of
radio interference in certain areas by the new service in exchange for making
the broadband market more competitive.
Amateur radio operators and public safety officials had asked the commission to
move slowly in the area because of the interference created by the service. The
agency responded by setting up a system to monitor interference and restricting
the service in areas where it could jeopardize public safety, like areas around
airports and near Coast Guard stations.
Officials noted that there have already been field tests in 18 states of the
B.P.L. technology. One company, Current Communications, has recently begun to
offer broadband service near Cincinnati in a joint venture with Cinergy, the
Midwest power and energy company. The service is priced at $29.95 to $49.95 a
month, depending on the speed.
While some regulatory and technical issues remain, the technology offers
enormous promise because the power grid is ubiquitous. The costs to the
industry to offer the new service would be comparatively small, and the
possible returns on those investments could be high. If the utility companies
do begin to offer the broadband service more widely, they would also be likely
to enter the telephone business by offering phone services over the Internet,
just as phone and cable companies have begun to do.
Mr. Powell, the F.C.C. chairman, said that the new technology would not only
offer greater competition in the broadband market, but would also allow
consumers to easily create networks in their home through electrical outlets.
And adding communications abilities to power lines would permit electric
companies to better manage the power grid, he said.
Mr. Powell and three other commissioners voted to approve the rules. The fifth
commissioner, Michael J. Copps, dissented in part. He noted that the agency had
pushed aside a number of vital issues for another day, including questions of
whether utility companies would have to contribute to the telephone industry's
universal service fund and provide access to people with disabilities, and
whether measures would be put in place to ensure market competition.
He also said that regulators would need to determine whether it would be fair
for electricity customers to pay higher bills "to subsidize an electric
company's foray into broadband.''
"We just have to get to the big picture and confront the challenges I have
mentioned if B.P.L. is going to have a shot at realizing its full potential,''
Mr. Copps said.
But industry executives praised the decision.
"This is one of the defining moments for the widespread adoption of broadband
by Americans,'' said William Berkman, chairman of Current Communications, a
private company in Germantown, Md., which hopes to have in place a B.P.L.
Internet network passing by 50,000 homes by the end of the year. The future
also grew brighter for the regional Bell companies with the F.C.C.'s decision
to grant BellSouth's request to exempt the Bells from any requirement that they
lease their new fiber lines to the home to rivals at low costs.
Mr. Powell said that the exemption would "restore the marketplace incentives of
carriers to invest in new networks.''
Prompted by the decision, the Bells said they would move more rapidly to build
fiber networks to homes. So far, the nation's biggest Bell, Verizon
Communications, has been the most active in building residential fiber
networks. But on Thursday, SBC said it now planned to provide 18 million
households higher speed Internet services in two to three years, rather than
five years as previously announced.
"The shovel is in the ground, and we are ready to go," said SBC's chairman and
chief executive, Edward E. Whitacre Jr.
But rivals, consumer groups and Mr. Copps criticized the decision as
anticompetitive.
The F.C.C. majority seems unable to restrain its preference for monopoly over
America's consumers, business users, and investment, said Len Cali, a vice
president for AT&T.
Mark Cooper, director of research at the Consumer Federation of America, said
the decision would tighten the already powerful grip that the telephone and
cable companies have on broadband services.
"This stranglehold will stifle innovation as these duopolies discriminate
against unaffiliated applications and services that in the past have driven the
growth of the Internet and the boom in information technology,'' Mr. Cooper
said.
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