"Naked DSL" is a reference to the offering by a telco of stand-alone DSL service, without bundling it with telephony service. The ability to get DSL from a service provider without being forced to buy telephone service could have important market consequences. Consumers may wish to receive their telephone service from a VoIP provider over the broadband connection - however, if they are required by the telco to also buy telephone service with the DSL service, there would be minimal cost savings on the part of the consumer, and a reduction in telephony competition.
SBC/AT&T and Verizon were required to provide Naked DSL (DSL service not-bundled with telephone service) for a period of two years as merger conditions starting in October 2005. These conditions have since expired.
In other proceedings, the FCC preempted state regulatory decisions - holding that the states could not require telcos to offer Naked DSL. In that proceeding, the FCC also initiated a Notice of Inquiry requesting comment on "the competitive consequences when providers bundle their legacy services with new services, or “tie” such services together such that the services are not available independent from one another to end users" This NOI is open and pending as of October 2009.
|BellSouth Telecommunications Request for Declaratory Ruling that State Commissions May not Regulate Broadband Internet Access Service by Requiring BellSouth to Provide Wholesale or Retail Broadband Services to CLEC UNE Voice Customers.||WC Docket No. 03-251 Comments are due on or before June 13, 2005 and reply comments are due on or before July 12, 2005 Ex Parte Period|
03/25/2005 MO&O BellSouth Telecommunications, Inc. Request for Declaratory Ruling that State Commissions May Not Regulate Broadband Internet Access Services. FCC 05-78. WC Docket No. 03-251. Word | Acrobat
Notice of Inquiry
37. The Order, set forth above, addresses a discrete issue of broadband policy relating to section 251(c) obligations for unbundling. However, our disposition of the section 251 question does not address broader questions regarding the tying or bundling of services in general that have been raised in the record of this proceeding. In this Notice of Inquiry, we seek to examine the competitive consequences when providers bundle their legacy services with new services, or “tie” such services together such that the services are not available independent from one another to end users. We seek comment on how such bundling might affect both intramodal and intermodal competition and the effect that it might have on the public interest, including benefits to consumers. Several commenters in this and other proceedings have raised the possibility that bundling services potentially harms competition because consumers have to purchase redundant or unwanted services. As the communications marketplace continues to move toward bundled solutions for consumers, we ask commenters to address specifically whether competition is supplying sufficient incentives for providers to disaggregate bundles to maximize consumer choice. We seek comment on whether such bundling behavior is harmful to competition, particularly unaffiliated providers of new services, such as voice over Internet protocol (VoIP), and if so, how this is related to several previous decisions or ongoing proceedings relating to dominance and classification issues. Finally, we seek comment on our authority to impose remedies, the adequacy and costs of any potential regulatory remedies, and the least invasive regulations that could effectively remedy any potential competitive concerns.