US West Agrees to Regionwide Line Sharing

US West Inc. (www.uswest.com) cut a deal with 13 CLECs to share phone lines regionally for the simultaneous provisioning of voice and data traffic.

The multicompany, regionwide agreement is the first of its kind in the United States and "will speed and broaden availability of high-speed Internet and broadband services to millions more consumers in US West's 14-state territory," according to John Kelley, president of wholesale markets for US West.

"This agreement underscores our willingness to go the extra mile in opening up our network to competitors," Kelley said. "It comes at a time when demand for high-speed Internet access has never been greater."

It also comes at a crucial time for the BOC. A proposed merger with Qwest Communications International Inc. (www.qwest.com) is pending and US West has high hopes to garner successful regionwide testing of its OSS, another first. The latter would help the company nail down regionwide approval of its attempts to provide in-region long-distance services.

The 13 CLECs signed on with US West are: Arrival Communications (www.arrival.com); Link Networks Inc. (www.atlinknetworks.com); BridgeBand Communications Inc. (www.bridgeband.com); Contact Communications (www.contactcommunications.com); Covad Communications Co. (www.covad.com); CDS Networks Inc. (www.cdsnetworks.com); Jato Communications Corp. (www.jatocommunications.com); Montana Wireless Inc.; MULTIBAND Communications Inc.; New Edge Networks (www.newedgenetworks.com); NorthPoint Communications Group Inc. (www.northpointcom.com); Rhythms NetConnections Inc. (www.rhythms.net); and Western Telephone Integrated Communications Inc.

The interim agreement with US West comes on the heels of an April 10 agreement between the Bell and Rhythms under which the CLEC agreed to pay no monthly charge to use US West's existing voice lines to provide DSL services throughout US West's region. The agreement also provides deployment schedules, ordering procedures, and network architecture choices that are critical for Rhythms to provide effective line-shared services, said Jeff Blumenfeld, chief legal officer of Rhythms.

"Together, these agreements put Rhythms in an advantageous position to deploy line sharing and to bring the benefits of DSL services over shared lines to customers in US West's territory," Blumenfeld said in a statement.

Similar to the agreement it reached with Rhythms, US West's deal with these CLECs includes a no-charge, line-sharing rate that's effective immediately through the end of the year and which may be extended until June 1, 2001, if certain contingencies are met.

The FCC (www.fcc.gov) in November 1999 ordered the nation's ILECs to allow CLECs to offer DSL services on the same ILEC telephone lines that already carry voice services by June 2000. The FCC ruling gives customers the ability to order DSL services without losing their voice carrier or having to install a second line.

In its order, the FCC seemed to like the idea of setting a zero line sharing charge, but instead opted to leave the actual pricing to the states. Over the next several months, the state commissions will determine those permanent, cost-based line-sharing rates. Some states already have done so.

For instance in Minnesota, regulators ordered line sharing as a matter of state law several weeks prior to the FCC's decision. Then in December 1999, Covad inked an agreement with US West to implement line sharing in Minnesota and several other CLECs followed suit. This new regionwide line-sharing agreement incorporates both the Rhythms and Covad deals on a regionwide basis.

"The joint efforts of the competitive carriers and US West … have resulted in US West becoming the first incumbent phone company to enter a written agreement to share lines on a regionwide basis," said Clay Deanhardt, senior counsel for Covad. "This agreement proves that the FCC's line-sharing mandate is clearly executable by the ILECs. Not only will this agreement provide consumers with greater choice in DSL service providers, but we also expect line sharing to result in more competitive DSL pricing and faster installations."

Under the agreement, the CLECs can choose by May 1 one of two interim monthly loop cost options. The two interim options are either a flat cost of $5.40, or a tiered cost of zero, which is subject to a future increase to $8.25 based on the timing of the proposed US West merger with Qwest.

In each case, all interim prices are subject to "true up" - meaning that once permanent prices are set in each state, the permanent price will be applied retroactively back to April 24, 2000, Deanhardt explained. Minnesota is currently the only state in US West's region that has an interim line-sharing rate of $6.05 a month.

The deployment schedule implements line sharing in some 350 US West COs by the end of July throughout the company's 14-state region. Competitors can begin submitting orders in those offices where the necessary equipment has been installed beginning in mid-May, according to the agreement.

US West and the CLECs plan to continue negotiating permanent prices for line sharing. If they can't negotiate one, the companies have agreed to ask each state commission to establish permanent rates.

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