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FCC clears new phone rules

WASHINGTON -- Government regulators approved rules yesterday that would phase out discounts the four major regional telephone companies offer rivals for access to their networks, a move likely to lead to higher phone bills for some 18 million residential phone customers served by AT&T Corp., MCI Inc., and other carriers.

The Federal Communications Commission voted 3-2 to give competitors of the regional companies 12 months to build their own networks or negotiate leasing agreements with the regionals -- Verizon Communications Inc., SBC Communications Inc., Qwest Communications International Inc., and BellSouth Corp.

The commission also voted to require the regionals, in many circumstances, to continue sharing their networks at discounted rates with local competitors serving small and medium-size businesses. The discounts the regionals would have to provide rivals in the business market could be as much as 40 percent below rates that would be available without government intervention.

In some larger markets, network access to regional competitors would be eliminated eventually.

The agency has been trying to come up with regulations to spur phone competition for the last eight years. The courts have rejected three previous attempts at issuing new rules, most recently in March when the US Court of Appeals for the District of Columbia threw out the commission's leasing rules.

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