FCC faces Internet decision on AT&T, Qwest

By Peter Kaplan

WASHINGTON (Reuters) - U.S. regulators are expected to decide on Thursday whether to grant a request by AT&T to lift some regulations that govern what it can charge rivals for access to the company's high-speed Internet lines.

The Federal Communications Commission is facing a deadline of midnight on Thursday to rule on a petition by AT&T to scale back the regulations.

Analysts have said the commission could rule at the same time on a similar petition by Qwest Communications International, whose request was put on hold by the agency last month.

The FCC eased the same regulations on Verizon Communications last year. Verizon's petition was not approved by the agency, but went into effect when one of the commissioners was recused and the remaining four deadlocked.

All the requests have been strongly opposed by smaller rivals such as Sprint Nextel Corp., Time Warner Telecommunications and XO Communications.

These competitors argue that they have few alternatives to get access to the high speed lines they need, and are being charged more and more by the dominant carriers.

Some commissioners and lawmakers on Capitol Hill have also expressed concerns about easing the regulations on AT&T at a time when the FCC is studying a whether to reimpose similar restrictions on the business services offered by the major US phone carriers.

But Verizon and AT&T counter that the market for high-speed access has been growing more competitive and that prices have been declining.

Analysts say the five-member FCC is split over the issue between Republicans and Democrats. One of the three Republicans, Robert McDowell, holds the swing vote.

"He has played his cards very close to the vest," one source close to the matter said.