FCC Said to Rule in Favor of BellSouth on DSL Lines

Federal regulators have freed BellSouth Corp. from state rules requiring it to sell high-speed Internet service to voice customers of rival firms, people familiar with the matter said Friday.

In a 3-2 vote Thursday that has yet to be announced, the Federal Communications Commission ruled that states no longer had authority to regulate digital subscriber lines offered by BellSouth and others.

BellSouth government affairs spokesman Bill McCloskey said a commission ruling favoring the company could affect about 8,000 customers in four states who take DSL from BellSouth but local and long-distance phone service from rival carriers.

“The larger impact is that it would put the commission on record saying that there should be a national broadband policy and not one any state could opt out of,” McCloskey said.

The vote, taken late Thursday before Michael K. Powell left as chairman, is expected to be released after commissioners turn in written statements explaining their votes.

The decision would give the regional network owners, including SBC Communications Inc. and Verizon Communications Inc., the ability to bundle Internet access with local calling plans to dissuade customers from defecting to high-speed service offered by cable TV firms.

Vonage Holdings Corp. and other smaller carriers say forcing customers to buy Web access and local service from the same operator will limit competition.

FCC spokesman Mark Wigfield declined to comment.

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Bloomberg News was used in compiling this report.