Key lawmakers, including Sens. Mike DeWine, R-Ohio, and Herb Kohl, D-Wis., chairman and ranking Democrat, respectively, on the Judiciary Committee’s antitrust subcommittee, both are pressing the FCC and Department of Justice to require naked DSL.

Verizon Communications has begun offering a naked DSL service voluntarily in some regions but generally at a higher price than the total price consumers pay when both services are bundled. The concern is that if the agency requires naked DSL, Verizon and SBC will offer it at the same price as a bundled service, eliminating any advantages for consumers. The agency is unlikely to install price restrictions on such a measure, sources close to the agency said.

Commissioners may also spar over whether the big Bells need to divest some so-called special access lines, high-capacity cables they own that connect businesses to communications systems operated by long-distance companies and others. Bell rivals such as MCI and AT&T have for years complained about the rising cost of these lines. Both companies provide these lines in some markets, and regulators may worry that their combination with Verizon and SBC will in some markets eliminate competition there or significantly hamper it — reducing the number offering the lines from three to two.

“How much competition is left for these routes”? one analyst asked.

The DOJ and FCC may also require the Bells to divest customers in some markets. If regulators require divestiture of business customers and special access lines, the most likely (and most interested) buyers are Qwest Communications International Inc. and Sprint Nextel Corp., which both offer enterprise telecom services.

Another concern is whether the FCC should impose a condition that would prevent the two megatelecom companies from colluding. “The concern is that Verizon-MCI may offer some sort of special cozy low interconnection rates to SBC-AT&T and vice versa,” one observer said, “and that other telecom companies won’t get that deal.”

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