Apr 1, 2003 12:00 PM

FCC Chairman Michael Powell came out on the losing end of a 3-2 vote Feb. 20 that gave state regulators the right to dictate how the Baby Bells lease their last-mile infrastructure to competitors like MCI WorldCom and AT&T.

With the decision, the FCC essentially transferred responsibility for ensuring competition in the telephony market to the states, sidestepping around the so called UNE-P rules incumbent carriers have been railing against.

Powell denounced the result, claiming it would make the Baby Bells' business too complex and would hurt consumers.

On the surface, it's a mixed bag for the deployment of DSL services. If the Baby Bells are forced to continue leasing copper infrastructure for DSL lines, it will maintain what little competition there is in the arena.

Meanwhile, the phone companies argue they have less incentive to invest in new equipment assuming they have to share it with their rivals, which could spell stagnant availability and depressed innovation.

However, it's a moot point given the state of competition in the DSL space today.

Covad, the only truly national independent still in business, boasts only about 381K DSL subs at the end of the year, and its growth has been anemic since emerging from bankruptcy.

BellSouth and Verizon have more than 1 million DSL subs, while SBC has more than 2 million.

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