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As the Federal Communications Commission embarks on controversial plans to overhaul local phone competition, the battle between the Baby Bells and their rivals appears to be heating up. At a forum on Tuesday, sponsored by the Phoenix Center for Advanced Legal & Economic Public Policy Studies, executives at competitive telecom companies, academics, small business leaders and Bell lobbyists duked it out over their vision for the future of local phone competition. Though the agency has yet to formally release its plan for telecom competition, theconsensus is that FCC Chairman Michael Powell wants to release local phone companies from a requirement to lease portions of their networks to competitors at low-cost, regulated prices. Jack Goldberg, a director at InfoHighway Communications Corp., which uses the networks of Verizon Communications Inc. to provide service to business subscribers, said he worries the FCC will force his company and other Bell rivals into bankruptcy by eliminating the low-cost access. Once InfoHighway and others are gone, the Baby Bells will have a monopoly over local service, he said. “As events unfold at the FCC as everyone is predicting, many business customers will not have competitive firms to serve them,” Goldberg said. “The Bells will not be there to provide the customized service when they have no competitors.” United States Telecom Association spokesman Daniel Phythyon, who represents the Baby Bells, said the current regulatory structure discourages the Baby Bells from investing in their networks because rivals can rent those systems at below-market prices. A better system is to require all competitors to build their own networks, he said. But InfoHighway chief executive Joseph Gregori said the capital markets are unwilling to fund the investments required for startups to build their own networks. Until the market turns around, access to the Bell networks is critical for competition, he said. Broadband providers also see danger in Powell’s plans. Sue Ashdown, director of American Internet Service Provider Association in Washington, D.C., said the FCC may permit Bells to bar broadband providers from using newly laid fiber-optic lines. Instead, rival ISPs would be limited to the legacy systems, which offer slower data transfer rates because they rely on copper wires. “The future for broadband competition is sacrificed,” Ashdown said. �Copyright 2003, The Deal, LLC. All rights reserved.

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