California ISP's Urge SBC to Get Naked → Pffft

As long as theyre at it why dont they ask the cable companies to unbundle the tv shows, Im tired of paying for Lifetime to watch HBO.

You are now seeing the second step in a two year fight with AT&T( NOW YOU SEE WHY SBC IS BUYING IT) and MCI( VERIZON OR QWEST) and others. The other ISP resellers are being helped by the AT&T legal guys who are fighting for a change in the resell rules.

The first step was the the California Public service commission forced SBC and Verizon to process all order from other CLECs and not block switching of local service because a customer has DSL.
The next step is to force SBC and others to make their systems which they say cannot provision a separate voice line from DSL and visa versa.

SBC with Verizons backing was saying that their system can only provision a DSL if the customer is local voice customer. Their system cannot give someone a DSL line when they have local phone service with lets say AT&T in California. SBC showed the commission their system in a sealed meeting that their is only one option for a DSL. This is the reason that SBC says you can only get DSL if you are a local voice customer( it is the only option in the provisioning system). The California commission is about to force SBC to fix their system to allow provisioning of a DSL line only or any other combination.

But the FCC has ended price caps on unbundled network elements and this supersedes any state regulation to a slim area of scope. We will see this taken to the FCC if SBC loses in California. The FCC controls all TSLRIC rates ( all network element prices and resell prices) with the states having some say. And these rate are created by mathmatisicans hired by the RBOCs to show what it cost them to build and operate a telecommunications network in the local market.

You miss a very large and relevant point. DSL Internet access is not offered by the regulated entity and, as an information service, the service itself is not regulated and is outside the reach of the FCC or the CPUC. If the unregulated information service provider wants to restrict its service offering to a bundle, there is nothing the CPUC or the FCC can do about it. They can try to regulate it by pressuring those they do have regulatory power over - but then you start the slippery slope of regulating ISPs - which the government has no business regulating...

Like it or not, this is not an FCC or CPUC issue. If it is, then God help us because it means the government is in the business of regulating ISPs and if you are so naive to think that it will stop here - I have some land to sell you and I'll even bundle it with the water rights to the ocean that it's not on....

All ISPs who own their own network or want to lowest price for network elements are regulated by the FCC and state public utilities commission.

Actually ISPs - and that includes separate affiliates of telcos - are not regulated by the FCC or the PUCs. Providers of "telecommunications services" are regulated and Internet access is, by definition, not that. Either you are too stubborn to admit that Information Service providers are unregulated, or you work for the FCC which, in that case, the World is yours to regulate...