Telecom equipment manufacturers in Canada and the United States are hoping that a recent ruling by the Federal Communications Commission (FCC) will spur telcos south of the border to buy more equipment. Already, one of the largest of the so-called "Baby Bells" has decided to expand its broadband service. Last month, the FCC ruled that ILECs no longer have to make DSL service available for third-party access. But states will still have a say in how local competition is regulated (NL, Feb. 24/03). Some had feared that this would stall further deployment of technology and thus affect equipment vendors. SBC Communications Inc. and BellSouth Corp. stated immediately after the decision that they would not invest in new high-speed networks unless the local rules were changed. But on March 19, Verizon Communications Inc. announced that it plans to expand its broadband capabilities by almost 30%. "This is the kind of announcement we are expecting to hear more of from the other Bells in coming months since the FCC deregulated their DSL business," American telecom analyst Jeff Kagan wrote in his regular dispatch to journalists. "Verizon must have been chomping at the bit waiting for the FCC ruling to make this announcement. They were the first to pull the trigger on this one and will start putting pressure on the cable industries’ lead in broadband market share." Before the Verizon pronouncement, Andy Weirich of Ottawa’s Catena Networks was quoted in a local newspaper as saying larger telcos are likely to build more infrastructure. This could only help his company and other firms like Nortel Networks Corp., Cisco Systems Inc. and Lucent Technologies. But the vice-chair/president of Verizon’s Telecom Group said the company is not planning to change its projections for capital expenditures, despite the new deployment. "We’re making some very significant shifts from some of the more traditional voice technologies into the newer broadband, DSL, fibre-related technologies," Larry Babbio told a news conference. "So what I think this shows you here is a more concentrated effort in the area of broadband." That is in line with predictions for capex spending. For several years now, IDC Canada has been warning that the recovery for equipment vendors is a long way off (NL, Feb. 24/03). The FCC decision does little to change that forecast. "With this ruling it is not likely that big guys in the U.S. – SBC and BellSouth, local ILECs – will be spending or expanding their infrastructure," IDC Canada analyst Warren Chaisatien tells Network Letter. "I think that’s a very likely scenario there. And obviously if that is the case then it would confirm our view that capex is not going to rise and at best it’s going to stabilize." But one of the people who voted for the new rules foresees great things ahead. Kevin Martin is a recent appointee to the FCC who defends the decision as a principled, balanced approach. "The order removes unbundling requirements on newly deployed fibre to the home, allowing for deployment of infrastructure to provide the broadband and video services of the 21st century," he wrote in Telephony magazine. "It provides regulatory relief for new hybrid fibre-copper facilities, deregulating the fibre and new packet-based technologies that provide broadband services today." Martin’s vote put him at odds with commission chair Michael Powell, who had been hoping his fellow commissioners would endorse a deregulation plan Powell has been working on for several months. Both men are well connected Republicans. Powell’s father Colin is Secretary of State in the current administration; Martin’s wife Catherine is communications director for vice-president Dick Cheney.