DSL Line Sharing: Ready, Set, Go

By Lisa Phifer
Core Competence, Inc.

Last November, the FCC ruled that local exchange carriers must allow competitive carriers to offer high speed data services on the same copper pair used by the incumbent to provide basic voice services. This arrangement, known as line sharing, grants CLECs unbundled access to the high-frequency portion of the local loop -- the same access already enjoyed by ILECs using those loops to deliver low-frequency voice.

In its ruling, the FCC found line sharing not only technically feasible, but necessary to enable cost competition in the small business/residential DSL market. In its mandate, the FCC set a target for state public utility commissions (PUCs) to establish interim rates, terms, and conditions so that line-shared service could be offered by CLECs within 180 days. Now, as we near the end of this grace period, we find CLECs lined up at the starting gate, anxious to deploy line-shared service just as soon as ILECs are ready.

Spurring Deployment of Residential DSL
March 31, 2000 residential DSL line estimates published by the San Francisco Chronicle illustrate the lead ILECs now enjoy in a market without line sharing:

SBC Communications 150,000	COVAD Communications 23,000
US West 102,000	NorthPoint Communications 8,000
Bell Atlantic 53,000	Rhythms NetConnections 3,000

But according to Judy Levine, NorthPoint VP of Consumer Marketing, "Line sharing is a breakthrough that will improve DSL service delivery and bring broadband service to more American consumers." Rhythms VP of Product Management Mike Calabrese agrees. "It fundamentally changed the economics of DSL. We wanted to position ourselves in the marketplace to be ready to go when it happened."

CLEC predictions for rapid deployment of line-shared residential DSL are rosy. "We expect to see service really rolling out by the end of the year and in early 2001," said Eric Moyer, Director of Product Marketing at COVAD Communications. "COVAD can now reach about a third of the homes in the US. By the end of 2000, we plan to provide service to 45% of these, and expect that a significant portion will be line-shared."

Benefit to Residential Consumers
Why are the FCC and CLECs so convinced that line sharing will benefit residential consumers? 

Line sharing eliminates the labor cost and delay required to install a new copper pair to just deliver DSL. ILECs are already piggy-backing DSL onto existing POTS lines for this very reason. Line sharing will allow CLECs to do the same. "Today, in a pre-line-sharing environment, COVAD must lease a second line from the RBOC, the line must be connected to the home, then a COVAD technician installs inside wiring and a DSL modem," explains Moyer. "In a line-sharing scenario, the wiring is already done. The installer -- or ultimately the end user -- can just plug in the DSL modem."

Opening the residential market will bring about other changes that reduce cost. "Now that G.lite-based ADSL is being deployed, users will see standard ADSL modems more readily available -- at computer stores, shipping with PCs," said Moyer. "Once these modems become available in the retail consumer electronics market, prices will drop." Combining line-sharing with commodity-priced modems will result in a lower-cost "plug and play" environment for consumers.

Sounds Great, So What's The Catch?
Line sharing is feasible only for voice-compatible forms of DSL, such as ADSL. It isn't relevant for SDSL and other xDSLs that require exclusive use of the loop. It is of limited benefit to CLECs who also offer voice because it only applies in the case where the ILEC is already offering voice on the loop. But this footprint fits the vast majority of residences and many small businesses, representing a huge and largely untapped market.

Analysts worry that the devil is in the details. "Just because a legal decision has been made doesn't mean that it will work," says Lisa Pierce of the Giga Information Group. "The first issue CLECs have to tackle is how to access the high-frequency portion of the local loop without interfering with other high-frequency applications that may exist in the same cable bundle."

But COVAD's Moyer says "We're not really seeing many cases where this happens today. Usually someone forgot to install a filter on some device at the home or business." He believes that CLECs can address this concern by educating support staff to ask the right questions and by training installers to seek out and correct known sources of interference.

Whether DSL service is provided by the CLEC or ILEC, the incumbent remains responsible for line conditioning -- the process of removing load coils, taps, and repeaters from the local loop. In its ruling, the FCC found such equipment unnecessary on loops under 18,000 feet, but gave ILECs latitude on longer loops. If the ILEC can demonstrate that conditioning a longer loop would degrade voice service, the loop can be exempted from line sharing -- but this exemption is permanent, preventing the ILEC itself from offering line-shared DSL on that loop. The ILEC can recover the line conditioning cost from the CLEC, but the CLEC can decline conditioning if it would result in unacceptable cost or delay.

Another significant technology challenge: upgrading ILEC operations support systems to permit ordering, provisioning, billing, and testing for the unbundled network element--the high frequency portion of the loop. This challenge doesn't end once the service is activated. Maintenance and trouble-shooting for the shared line includes three parties: the ILEC, the CLEC, and the ISP providing DSL-based Internet access. Analysts like Pierce predict customer confusion and increased cost of customer care.

But COVAD's Moyer downplays this concern. "If a consumer has a problem with voice service, he calls the RBOC. If he has problem with his DSL service, he calls the ISP and the ISP will coordinate with COVAD as necessary to resolve the problem," said Moyer. "This really isn't any different than today when an analog line is used for dial-up Internet access."

Continues