11/01/1999

SBC Lobbyists Undercut by DSL Rollout

RBOC's three-year Project Pronto appears to weaken call for DSL service deregulation.

By: David Rohde
Network World

WASHINGTON, D.C. - SBC Communications may have raised users' hopes when it recently announced plans to make DSL available to most of its customers by 2002. But the carrier also may have put a crimp in its own lobbyists' arguments to get Congress or the Federal Communications Commission to deregulate those very same digital subscriber line (DSL) services.

The company could paradoxically be setting back not only its own but also other local carriers' DSL rollout plans by undercutting efforts to eliminate regulations that make carriers hesitant to roll out the services.

SBC now boasts ownership of one-third of the nation's access lines as a result of its Ameritech acquisition.

Two weeks ago, the company announced Project Pronto - a plan to make DSL available to 80% of customers in its 13-state territory.

Yet for months, SBC has funded an ostensibly grass-roots group called the Internet Advancement Coalition, whose chief argument is that the regional Bell operating companies have little incentive to widely implement just this kind of broadband data service.

The coalition, nicknamed iAdvance, has repeatedly cited federal rules limiting RBOCs to serving local calling areas, even for data traffic, and requiring them to resell their data services to competitors.

Opponents of iAdvance - chiefly long-distance carriers and competitive local exchange carriers (CLEC) - ridicule the apparent contradiction and say Project Pronto proves iAdvance's arguments are bogus.

"SBC is talking out of both sides of its mouth," says Jonathan Askin, vice president of law at the Association for Local Telecommunications Services, a CLEC trade group. "They're constantly running to the FCC and Congress crying that they need [long-distance data authority], and at the same time they run to Wall Street saying, 'We can roll out DSL, no problem.'"

But SBC and iAdvance officials went to some lengths to explain that the market and lobbying positions were not contradictory.

SBC's buyout of Ameritech and the conditions placed on the merger by the FCC have changed the picture, says Zeke Robertson, an SBC senior vice president. The FCC is obligating SBC to propel its DSL rollouts forward, even though "without question" DSL would still be easier for RBOCs to invest in without the data regulations, Robertson says. Besides, the market is obligating SBC to move forward on broadband access, he says: "If we don't take it, someone else will."

Matt Miller, a spokesman for iAdvance, says the coalition's first concern has been the Internet backbone, not local access lines. "There's not enough Internet backbone in the country," Miller says. He notes this is a totally different topic than SBC's DSL rollout plan.

Over the summer, iAdvance released a study purporting to demonstrate that regions of the country served by non-Bell carriers - those with no long-distance restrictions - tend to enjoy more high-speed Internet backbone interconnection points.

But David Rubashkin, managing director of the Competitive Broadband Coalition, dismisses the iAdvance study. He says the choke-point remains the local loop, where RBOCs don't need long-distance authority to upgrade their networks.

Officially, iAdvance is separate from SBC, although the group has acknowledged receiving funding from SBC and Bell Atlantic. But the group was originally housed in a Washington public-relations firm called Public Strategies - the same firm used by SBC - and spokesman Miller now works out of SBC's Washington office. Miller refuses to discuss whether all of iAdvance's funding comes from SBC and Bell Atlantic, the two biggest RBOCs. "I'm not going to get into our relationship inside SBC," he says.

In addition, iAdvance hired former White House Press Secretary Mike McCurry as its chief lobbyist shortly after McCurry himself joined Public Strategies. McCurry was not available for comment, but in an Aug. 30 speech, he claimed the long-distance data restriction "does nothing today but impede growth of the highspeed 'Net and leave millions of consumers without fast access to backbone networks."

Several bills in Congress have been introduced, with names such as the "Internet Freedom Act," that remove restrictions on RBOCs which the RBOCs claim stifle both local and long-distance broadband deployments.

But Robert Rosenberg, president of Insight Research Corp. in Parsippany, N.J., says RBOCs don't need new regulatory freedoms to get moving on broadband. "There is such tremendous pent-up demand," he says. "You don't need some kind of statutory requirement [to boost DSL], you need some kind of pull - either competition from the cable TV industry or the new data CLECs."