May 8, 1999
Contact: Mary Hanley
 (202) 482-7002


The Department of Commerce today urged the Federal Communications Commission (FCC) to issue a ruling that would encourage local telephone companies to sell advanced speed digital subscriber line (DSL) services to Internet service providers ISPs at discounted rates. ISPs could then resell those services to individual users along with the ISPs' Internet services --- speeding the deployment of broadband services to residential and business subscribers.

"Broadband technology is something the American consumer is clamoring for," Commerce Secretary William M. Daley said, "The Department of Commerce supports initiatives that will diffuse those services more rapidly."

The Department of Commerce, through the National Telecommunications and Information Administration (NTIA), urged the FCC to clarify that DSL services sold by local telephone companies to ISPs are not "retail" services subject to the resale requirements of the Telecommunications Act of 1996. As a result, local telephone companies need not make those services available to competing carriers at a discount from the rates charged to ISPs.

At the same time, the Department favored the imposition of conditions to ensure that the prices that ISPs pay for DSL service will be available on fair and equitable terms to other prospective buyers, including competing carriers. Larry Irving, Assistant Secretary for Communications and Information said: "While the Administration strongly favors government policies that foster widespread deployment of broadband services, we believe that it is imperative that such policies also further the procompetitive goals of the 1996 Act."

Accordingly, NTIA asserted that while DSL services sold to ISPs are not "retail" in nature, they are telecommunications services. Thus, the FCC should ensure that:

Local telephone companies adhere to their basic common carrier obligations to provide such services to all customers upon reasonable request on just, reasonable, and nondiscriminatory terms and in accordance with all applicable tariff requirements.

All DSL rates, including volume and term discounts, must cover all relevant costs, including a reasonable share of the costs of the underlying subscriber line.

In negotiations and arbitrations conducted under the 1996 Act, competing carriers should be entitled, at a minimum, to the same discount (from the prevailing retail DSL rate) that a telephone company makes available to ISPs for comparable levels of demand and lengths of service agreement.

For media inquiries, please call Mary Hanley, NTIA Public Affairs, at 202-482-7002, or visit NTIA's home page at NTIA serves as the principal adviser to the Executive Branch on domestic and international telecommunications and information issues