ISP Group Breaks Off Negotiations With SBC

A group of California Internet service providers said Friday that it has broken off talks aimed at settling a dispute over market access with SBC Communications Inc. and will ask state regulators to curb what it views as a monopoly by the local phone company in the market for high-speed Internet access.

The settlement talks broke down after SBC asked federal regulators to exempt it from a legal requirement that it resell advanced services to other companies on the grounds that it does not dominate that market, the consortium said.

SBC petitioned the FCC on Wednesday to be classified as a nondominant provider of high-speed Internet access, including digital subscriber line services, and asked that it be freed from “costly and pervasive” regulations that do not apply to competitors.

The California ISP Assn., which represents both small ISPs and major ones, said SBC has abused its control of the local telephone network to give its Pacific Bell Internet affiliate an unfair advantage in the market for DSL services.

SBC already controls more than 80% of the residential DSL market in California, and approval of its petition to the FCC would force smaller competitors from the market, CISPA said.

“This is another attempt by the nation’s largest phone company to extend its telephone monopoly into a monopoly over Internet access,” said Jon Washburn, CISPA president.

SBC said it was surprised that CISPA broke off the negotiations and said its FCC filing had no bearing on those talks.

San Antonio-based SBC has rejected CISPA’s allegations in the past, saying it does not favor its own affiliate over independent DSL carriers.

CISPA will renew a request to the California Public Utilities Commission to prevent SBC’s DSL arm, SBC Advanced Solutions, from disconnecting residential Internet customers when they switch providers.