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Policy

Comcast, Verizon Volley Over Exchanges

3/13/2005 7:00 PM Eastern

Verizon Communications Inc. is playing a numbers game, and some in the cable industry are complaining.

Comcast Corp. has accused the regional Bell operating company of violating federal rules on transferring customer phone numbers to new providers in an attempt to impede local-telephone competition.

Comcast told the Federal Communications Commission two weeks ago that Verizon refused to transfer a number unless a customer who has elected to drop just local phone service also dropped digital subscriber line service.

LOST ORDERS

“This adversely affects competition and consumers,” Comcast said in a March 2 letter to the FCC, adding that Verizon’s noncompliance means “Comcast is forced to cancel the orders of significant numbers of consumers who have affirmatively chosen Comcast as their phone provider.”

FCC number-portability rules require the Baby Bells to transfer numbers to competitors unless it is not technically feasible to do so. Comcast said Verizon likely can’t rely on the exception because other phone incumbents routinely transfer numbers in cases where customers want to switch phone carriers but continue as DSL subscribers.

“[Verizon’s] practices violate [federal law] and [FCC] rules,” Comcast said.

Last month, Tom Tauke, Verizon’s executive vice president of public affairs and communications, said that in the “not-too-distant future,” the company would unbundle voice and data products so that consumers can purchase DSL on a standalone basis.

“Today, it’s a technological issue. It’s not a marketing issue,” Tauke said. “I know there is a little bit of frustration in the business that we haven’t been able to make it happen to date.”

Comcast’s concerns about Verizon — which first surfaced at the FCC more than one year ago — came as the No. 1 cable company prepares to roll out voice-over-Internet protocol service in 20 markets by the end of this year and across its 40 million-home footprint by the end of 2006. The company expects to sign up 8 million customers within five years.

But number portability is considered essential for new entrants, because many consumers and small businesses are reluctant to go with a rival carrier if they can’t retain their phone numbers. Issuance of a new number means that customers would have to spend time — and even money — to get the word out to family, friends and clients.

OTHER OPS MAD

In recent months, Time Warner Inc. and Bright House Networks have lodged similar complaints with the FCC. Bright House urged the FCC to consider requiring incumbent phone companies to sell DSL as a separately priced and marketed service, sometimes called “naked DSL.”

AT&T Corp., which is being acquired by SBC Communications Corp., has told the FCC that BellSouth Corp.’s policy of refusing to sell DSL to a customer that doesn’t purchase its local phone service was “anti-competitive,” because consumers would be unable to experiment with AT&T’s CallVantage VoIP service without paying twice for voice service.

Some state regulators have issued orders that would require the Baby Bells to sell naked DSL. But BellSouth has asked the FCC to rule that states do not have authority to force the sale of DSL to a consumer who is not a BellSouth voice customer.

September