Rural Areas May Get Their Missing Link Ruling Today Is Likely To Force Phone Companies To Have To Share Their High-Speed Lines With Internet Providers

More residential consumers could obtain high-speed Internet access - and at lower cost - under action anticipated by federal regulators.

The Federal Communications Commission is expected today to require local telephone companies to share their lines with businesses that want to offer high-speed Internet connections to customers.

That could make it substantially cheaper for upstart businesses to compete with telephone companies to provide connections dozens of times faster than today’s dial-up modems. And consumers might benefit with more choices for services, such as certain digital subscriber lines, at competitive prices.

Right now, local telephone companies, such as the regional Bells and GTE, can offer high-speed Internet services to subscribers on the same lines as they provide their regular voice service. But for outside businesses to come in and sell Internet connections to a consumer, they must buy a second line from the telephone company into the consumer’s home.

That means businesses competing with the local phone companies must spend about $20 to $23 for each second line. Upstart Internet companies say this puts them at a significant price disadvantage and limits their ability to lure residential consumers.

They say the playing field could be leveled if the FCC takes the action.

“This is a start of all of that good stuff, and the start of our campaign for the consumer in a more meaningful way,” said Dhruv Khanna, general counsel of Covad Communications Inc., which sells Internet connections mostly to business customers. The company hopes to be able to offer high-speed connections at less than $40 a month and expand its reach to residential customers.

“I think this is a sea change in people’s perception,” said Jeff Blumenfeld, general counsel for Rhythms NetConnections Inc., another data services company. He said sharing lines will enable consumers to start receiving service in a matter of days rather than waiting weeks for a second line installation.

But the regional Bells say they have serious concerns about the impact on consumer service of carrying data and voice traffic - from different providers - on the same copper wire. For example, if a consumer has a problem placing a call, companies will have to determine which service is responsible. “We are concerned about the impact on the consumer who is currently purchasing voice service from us that could have two providers over the same line,” said Susanne Guyer, assistant vice president of federal regulatory affairs for Bell Atlantic.

Robert Blau, BellSouth’s vice president for executive and regulatory affairs, stressed that making sure basic voice service stays reliable will be an important consideration for the FCC and companies as they add these applications to the phone line.

“That’s not to say they can’t be accommodated, but it’s new and untested,” Blau said. “There are just going to have to be rules of the road that people can follow.”

Industry officials expect the FCC to implement the requirement within six months. Yet to be determined are pricing arrangements. The commission is expected to set some interim pricing guidelines, with states hammering out later how much Internet businesses must pay the telephone companies to split the line.