Competitive carriers who depend on access to DSL lines from Bell companies are putting the best face possible on Friday’s Federal Communications Commission decision to dismantle regulations which require DSL resale, at least pending the issuance of the final order.

By setting up the two major rivals to compete in a duopoly, the FCC may also have spurred interest in other technologies, including broadband power line and broadband wireless systems including WiMAX, to create a third option for reaching residential and small business customers.

The decision has been predicted since minutes after the U.S. Supreme Court decided in the Brand X case that cable companies didn’t have to open their broadband networks to other Internet Service Providers. FCC Chairman Kevin Martin made it immediately clear that he favored a level playing field for telcos with their primary rivals, the cable companies.

CLEC executives said they have been preparing for some time for the likelihood that DSL would be classified an information service and therefore not covered by open access rules. Unlike most ISPs, the CLECs have been negotiating commercial agreements with the incumbent LECs for some time, and have already been through one transition of a regulated service to unregulated status, following the end of the UNE-P resale requirements.

“Today's FCC decision on DSL is not a surprise for New Edge Networks,” said Dan Moffat, president and CEO of New Edge, in a prepared statement. “We have been repositioning New Edge Networks for this possible eventuality through the development of our 'BigFoot' DSL coverage for more than two years.”

BigFoot reaches about 90 percent of U.S. business locations and more than 9500 Central Offices, operated by all major carriers, and that is made possible by agreements with the Bell companies, long-distance companies and independent telcos, Moffat said. Those commercial agreements include both regulated and unregulated deals.

The general expectation is that, once freed from regulation access, the Bell companies will likely raise prices on their unregulated commercial agreements. Those negotiations will likely take place during the one-year transition period mandated by the FCC.

“It is too early to speculate on the implications of the FCC's decision until we have an opportunity to review and study the written order,” Moffat said. “The only certainty at this point is that there will be more debates, appeals, and clarifications after affected players review the written FCC order.” Covad Communications maintains its business plan could even benefit from the change – Covad resells DSL access to ISPs, and could capture new business, said James A. Kirkland, Covad senior vice president and general counsel.

“While the full text of today's FCC order is not yet available, based on statements made at the meeting, the order does not impact Covad's ability to provide broadband and VOIP services,” he said in a prepared statement. “Covad strongly believes that having open networks promotes broadband growth in the U.S., and that requiring broadband service access for independent ISPs has led to lower prices, more innovation and greater consumer choice.”

CompTel, the Washington-based trade organization representing competitive carriers, is also being cautious, waiting to see final word.

“According to the FCC, today's action has no impact on CompTel's carrier members,” commented Earl W. Comstock, President and CEO of CompTel. “CompTel appreciates in particular that the final order will include measures to ensure continued competitive access to facilities and provides a transition period for ISP access and USF funding. The Chairman and his Democratic colleagues worked hard to address issues of concern to CompTel members. While we look forward to working with Chairman Martin and the Commission to ensure the intent of this order is fulfilled, CompTel remains concerned that the regulatory classification decisions in this order will ultimately frustrate the Commission's stated goals and result in less innovation, higher prices, and fewer jobs for Americans.”

Although the vote was unanimous, the two Democrats who backed the change admitted they did so grudgingly. Even Martin and fellow Republican commissioner Kathleen Abernathy, said the FCC has more work to be done. “I believe that, with the actions we take today, consumers will reap the benefits of increased Internet access competition and enjoy innovative high-speed services at lower prices,” Martin said. “There is, however, more to do to stimulate infrastructure investment, broadband deployment, and competition in the broadband market. I intend to tackle these challenges in the upcoming months.”

“The Commission has already made clear its intention to ensure access to emergency services as Americans transition to packet-switched communications technologies, irrespective of how those services are classified under the Communications Act,” Abernathy said. “As we make clear in today’s [action], we will now turn our attention to other “social policy” requirements, such as those involving disability access, slamming, and consumer privacy. Where action is warranted, we will act. There is still work to be done as we endeavor to establish a new, minimally regulated framework for the digital era. But however we address the issues that remain before us, I expect that our decision today will spur future investment in broadband infrastructure and provide the flexibility to which companies in a competitive market and their customers are entitled.”

Copps specifically promised to stay on top of incumbents to make sure they comply with rules that prohibit blocking of competitive VoIP service or other content.

“We need a watchful eye to ensure that network providers do not become Internet gatekeepers, with the ability to dictate who can use the Internet and for what purpose,” he said. “Consumers do not want to be told that they cannot use their DSL line for VoIP, for streaming video, to access a particular news website, or to play on a particular company’s game machine. While I would have preferred a rule that we could use to bring enforcement action, this is a critical step. And with violations of our policy, I will take the next step and push for Commission action. A line has been drawn in the sand.”