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AT&T Protesting DSL-Local Phone Bundling

Bedminster, N.J. — AT&T Corp., which has shifted its focus to the rollout of voice-over-Internet-protocol service, is part of a contingent of VoIP providers concerned about phone incumbents that force consumers to drop digital-subscriber-line service when they want to switch to a new phone company.

BellSouth Corp. won’t sell DSL service to a phone customer unless the customer also buys local phone service, and it won’t allow a customer to drop local phone service without also dropping DSL.

In an Oct. 22 letter, AT&T told the Federal Communications Commission, “BellSouth’s tying and DSL-disconnection policy is anticompetitive” because it drains any incentive for a BellSouth DSL customer to experiment with VoIP services offered by AT&T and others, as the customer would have to buy two forms of voice service in order to retain BellSouth’s high-speed-data connection

Time Warner Inc. and Bright House Networks, two cable companies expanding VoIP service, have essentially made the same arguments — Time Warner before the FCC and Bright House before the Florida Public Service Commission.

The MSOs have not attacked the bundling issue head-on. Instead, they’ve said that the Bells are violating FCC number-portability rules by refusing to transfer a customer’s number to the new phone company unless the customer also drops DSL.

Verizon Communications also bundles DSL and local phone service, but the company is apparently going to roll out “dry,” or “naked,” DSL early next year on an unbundled basis.

“I’ve never heard that our procedure violates any FCC rules. It’s just that until we offer dry-loop DSL, the DSL service is associated with a particular line and phone number and must be removed from that line for the number to be ported,” said Eric Rabe, Verizon’s vice president of media relations, in an e-mail to a reporter.

BellSouth Corp. has asked the FCC to block states from requiring the provision of naked DSL to customers who have switched to a phone company that leases lines from BellSouth.

Because it offers voice service over its own facilities, Comcast Corp. said it would not be directly affected by an FCC decision to approve BellSouth’s request. Like Time Warner and Bright House, Comcast said refusal by BellSouth to transfer a customer’s phone number unless the customer also drops DSL violated FCC rules.

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