Verizon Communications and other U.S. local telephone companies will be freed from numerous regulations on their high-speed Internet services, the Federal Communications Commission decided Aug. 5.

WASHINGTON, D.C. (Reuters) -- Verizon Communications and other U.S. local telephone companies will be freed from numerous regulations on their high-speed Internet services, the Federal Communications Commission decided Aug. 5.

The agency unanimously agreed to treat the service, known as digital subscriber line (DSL), as an "information service," which insulates it from many traditional telephone rules, such as requirements to lease network access to competitors.

The designation would allow the big local telephone companies, called the Baby Bells, to cut off or potentially negotiate new terms for Internet service providers such as EarthLink to use their networks for broadband.

The United States has fallen to 16th in world rankings of broadband deployment per capita, leading Republican FCC Chairman Kevin Martin to make rolling out high-speed Internet service to consumers a top priority.

Cable and telephone carriers are battling to provide customers with a suite of broadband services, like fast Internet access, video and voice service, already serving about 37.5 million customers.

The FCC's decision came after several days of intense negotiations among commissioners.

Because there is a vacant Republican seat on the five-member FCC, Martin had to convince at least one of the agency's two Democrats to agree to the new DSL designation.

Martin has been trying to equalize the rules for DSL providers and cable companies such as Comcast. The decision follows a U.S. Supreme Court ruling that backed the FCC's ruling to label cable broadband an information service.

Verizon and SBC Communications, the two biggest local telephone carriers, have complained they are at a disadvantage in competing against the cable operators because their service has been subject to stricter rules.

DSL is seen as attractive because it is cheaper, but it offers slower data download speeds than cable service. There are roughly 15.5 million DSL lines in use, compared with close to 22 million customers who get broadband from cable companies.

The commissioners decided to require DSL providers to continue for nine months to pay into the universal service fund (USF), which subsidizes communications services in certain cases, unless a new funding system is developed sooner.

The ruling also provides a one-year transition period for independent Internet service providers and the Bells to negotiate access agreements for existing customers.