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The Bells, The Bells, Only The Bells
"Where's the competition?"
asks James Glassman of Tech Central Station. Almost five years after the Telecommunications Act of 1996, which was supposed to open up competition for the "last mile," megacorporations like Verizon and SBC still have a stranglehold and their would-be competition is gasping for air. What went wrong in the local loop? And what's to come?
[Disclaimer, I am a Sprint employee]
I don't know. That's standard practice among most wireless providers and I wouldn't be suprised if Sprint would lease bandwidth to other companies, but if they don't I'd suspect it's due to incompatibilities more than stuffiness. Remember, PCS is a different technology than traditional wireless or even digital wireless. It may not be possible. I'm not privy to all that, but I do know from some recent meetings on Sprint's strategic goals for the near future that they intend to use wireless towers to get beyond the "last mile" problem.
Steven
-- I have marked myself unwilling to moderate-- I don't have other accounts to artificially inflate the karma of
Where's the evidence that it's due to deregulation? In fact, where's the evidence that the industry was even deregulated to begin with? The fact was that it was not deregulated. It was only opened up for potential competition. The PUC is still firmly in place. The monopoly rights of the utilities was taken away, the regulation was not.
There are many problems with the current power "shortage". But I don't see any of these problems arising from too many power providers. Quite the opposite. There are too few providers and even fewer producers. The California population keeps on growing while the power produced keeps on shrinking. It's next to impossible to get government (read 'regulated') approval to create a new power plant. In the meantime the older plants are starting to fall apart. The industry wants to build a huge plant in San Jose but politics is stopping it. They also want to create dozens of mini plants but they can't do that either. We really need nuclear plants to avoid the pollution of gas/coal plants, but even suggesting it is political suicide here.
The potential competitors of PG&E and Edison would have to be nuts to enter the California market. Which is why the only alternatives you see are resellers of out-of-state surplus (as if they would have any in the middle of winter) and tiny environmental producers like wind or solar. Power production needs a huge economy of scale backed by an army of lawyers. What we really need is inexpensive point production, like microplants or personal fuel cells.
A Government Is a Body of People, Usually Notably Ungoverned
The only thing deregulation enables is for people to resell the existing services. It doesn't create any incentive to build new infrastructure, that's not what they teach in business schools these days. They teach how to make money without actually owning anything resembling "old economy" capital.
Hence, there's scores of "new" telco companies that don't have any capital (leased lines and switching from the telco), any facilities (see above), any personnel ("fixing" is part of the lease), or anything else there. They're all virtual businesses whose only means of support is consumers too dumb to realize they can buy the same services from the "old" phone company for less.
Until the FCC makes great strides in making last-mile infrastructure development a desirable business (or Stanford, Harvard, and MIT B-schools decide that the old economy is "in" again), we won't see anything revolutionary in fix-wire telecomms for a long time to come.
Well no, AT&T's right and you're wrong, but it's not entirely obvious why, so I'll explain.
The ILECs (incumbent telcos) used to have a legally-sanctioned monopoly on phone service. Cable companies did only broadcast TV. The cable companies generally did NOT have legal monopolies, but it's economically hard for a second cable operator to enter a town that already has one. RCN, Knology and a few others are trying.
Now, cable companies are allowed to enter the phone and cable-modem businesses. But in those fields, they are the *second* provider, the competitor, since the ILEC had the wire first and had it on a monopoly basis. The rule in this country is that competitive entrants can charge whatever they please, because they're not monopolies -- they're challenging them and need to establish a business model.
So when a cable company provides ISP service over its plant, it is acting purely as a new competitor -- five years ago, only the phone company was there. If you change the rules and regulate the cable companies' provision of ISP service, then you're a) entering the scary domain of regulating ISPs, and/or b) applying rate regulation to a competitive new entrant, which in so doing dries up capital for new entrants faster than an Arizona summer day.
The cable companies should learn that the ISPs are their friends, and they should be competing with the phone companies for the wire business. They've not figured it all out yet, but AT&T is going down that road. They are not going to renew existing exclusivity deals with @Home. Regulating it, hwoever, is the ILECs trick for keeping the cable companies to the TV business and out of their hair. Legally, DSL providers (LECs) are regulated common carriers open to all ISPs at a posted price; cable companies are not common carriers.
[disclaimer, I am an employee of Sprint]
The article basically says that since the Baby Bells (SBC and Verizon) own the physical "last mile" lines, they are keeping a stranglehold on the possibilities of competition for local service. These companies are still getting to enter the long-distance service buisness, which they weren't supposed to do until they opened up their lines to competitors, by sucking up to politicians.
How is Sprint facing this? Wireless. Screw the physical infrastructure of the last-mile lines. Sprint basically gave the baby Bells the finger and started building digital wireless towers everywhere they can. Pretty soon you'll be able to buy a wireless broadband modem and hit a PCS tower with a digital signal without touching a bit of Bell property. Since the wires are all owned by someone who won't share and has no interest in letting Sprint in, Sprint is doing what has been proven to work in markets where the physical infrastructure doesn't exist. Make it wireless.
Steven
-- I have marked myself unwilling to moderate-- I don't have other accounts to artificially inflate the karma of
Just look at what happened in San Francisco. AT&T actually said that not allowing open access to their cable lines would increase competition, while allowing it would decrease competition. That's completely backwards, and they knew it, too! But that didn't matter, the local government listened to them, and ruled against open-access, allowing SF cable telecommunications to become an AT&T-owned monopoly.
The word "competition" has been hijacked by lobbyists, and is now used to refer to situations where the exact opposite of a competitive market exists. Too bad most of the public hasn't caught on yet. They still believe it when corporate lackeys tell them passing a law that allows a single company to buy up every radio station in sight will somehow "increase competition". Ugh.
Free Hans!
Okay. I'll consider.
Okay, I'm done considering now.
NO!....
The problem, as I see it, is that if Government Inc. is giving you the line, they also have the right to tell you what you can put on it (either in terms or hardware or the types of data), perhaps look at the data any time they want, and, unlike other large corporations, they've got people with guns to enforce their will.
Do we really want the same corporation that gave us the DMCA providing us with our internet access? How long before the lines had to be monitored to "Protect The Children®"?
(I may be wrong about this, but as I recall, the US Post Office has more of a monopoly than some may realize - I believe it's literally illegal to use a private courier [e.g. UPS or Federal Express] for your regular mail! Do we even want to risk any chance of this happening to ISP's?)
A vote for the lesser of two evils is still a vote for Evil.
Hacker Public Radio is our Friend
I think it's the same with phone companies. People don't want the hassle of having to deal with some tiny local company run by a couple of college students that could go out of business in a week and where the maintenance and support are questionable. They know and trust the companies that are already around. The vast majority of people are going to stick with the big, old companies purely out of trust issues, IMO.
The american dream is a 'dream' because it is so incredibly difficult to attain. We live in a capital economy which eventually is dominated by super-large corporations. When you start a small company, you are swimming with sharks, and if they sense that you -may- become a threat, you are bought or eliminated. Simple as that. Its the economy we live in.
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Good quote, too many chars. Seriously, the slashdot 120 char limit sucks!
Here in Minnesota, I now get my telephone services through AT&T (formally MediaOne). It comes over my cable line, and it is a good deal compared to what I was paying UFWest (now Qwest).
I don't know if they're rolling out service in many other areas, but I am pleased with the quality, and it certainly is giving Qwest some competition.
My only gripe is that once again my local telephone service is being provided by Bell. How long until they get a monopoly on local service again and need be broken up?
It is the mark of an educated mind to be able to entertain a thought without accepting it. --Aristotle
The simple fact is that landlines won't exist in twenty years at all. Nowadays mobility is the key; landlines are clearly archaic.
Land lines are still relevant, at least here in the states. The company I was working for was doing some work for a car dealership a few years ago. As part of it, we all got to know most of the Big Guys(tm) there, such as the owner, CFO, etc. At the time I happened to mention while shooting the breeze how I was thinking about getting rid of my land line, because mobile phones were so much more convenient. The CFO told me flat out that yes, I could do that, as long as I didn't want to ever be approved for a loan.
Apparently money lenders here more or less require one to have a telephone number at a fixed address. I can only assume it's because they want to know there's a place you're ostensibly going to show up at eventually, so if you start having repayment "problems", someone can stop by to "encourage" you to continue making your loan payments.
So landlines aren't quite dead yet. Maybe if all the GPS-tracking of cellphones I've read about on certain mailing lists comes to be ubiquitous, landlines will be unimportant. But until then, they're still going to be necessary.
(And the day I can ditch Verizon for someone else will be one of the happiest days of my life--from the very moment I called them to activate service (when it was Bell Atlantic here), I've had nothing but problems from them, and their attitude has, in general, sucked.)
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"The urge to save humanity is almost always a false front for the urge to rule." --H.L. Mencken
Wireless cannot compete with wired bandwidth.
Is there something in the future to fix that? I don't know. But as soon as VoIP and VideooIP start replacing POTS, I think the landlines will have a sudden advantage.
There may be a schism up ahead in which both will compete in the same space, but really, they are independent and can survive off different markets.
Landlines can be used fairly easily to provide something like T1 level speeds to the average user, where the digital network can stream both video, voice, data, etc. In the future, we can expect several times more bandwidth than that...
Wireless is currently slow, and IIRC, 3G wireless is only expected to go up to 2mbps, which is just slightly faster than current DSL pipes... DSL has been shown capable of going up to 7mbps over copper wire (IIRC), and with the simple addition of another pair of wires, you can get 14mbps... with more complex wiring, of course (4 wires, for example), you could prolly get even better bandwidth and throughput than current t3 trunks ^^
And that's not even talking about the potential of fibre-optic landlines ^^
Geek dating!
GPL Deconstructed
Here in BellSouth territory, it's common knowledge that Bell does everything in their power to derail competition.
For example, they have managed to get a stranglehold on DSL. How did they do this? Despite the fact that competitive providers have DSLAMs at the COs, Bell still has to go out and handle any "last-mile" issues. When they are required to do this for their DSL competition, it's all too common for them to be too short staffed to handle the job. Delay after delay after delay sets in. Four to six weeks pass, and the end customer STILL doesn't have DSL.
Oddly enough, should the customer get fed up and elect to choose BellSouth's "Fast Access" DSL service, a technician is somehow immediately available and dispatched. We've even had reports of Bell techs, dispatched by Covad/Netrail, telling customers that "there is a problem with your line, it's going to take a few weeks to fix. However, if you want BellSouth DSL, there are other things we can do to get it working immediately." Of course, this is NOT Bell's official policy, and they'll deny it to the ends of the earth if you call them on it.
The whole thing is a joke. The baby bells will do anything in their power to hang on to their monopolies, including breaking the law.
The simple fact is that landlines won't exist in twenty years at all. Nowadays mobility is the key; landlines are clearly archaic. My generation her in Britain doesn't use land-lines at all - everyone has a mobile. They are cheaper and offer higher quality. When 3G liscences arrive, the competition will be annihilated.
I predict that companies such as Vodafone and Erikkson will control the infosphere in the future. They are the ones we should be watching, not 20th century corps like Verizon.
KTB:Lover, Poet, Artiste, Aesthete, Programmer.
KTB:Lover, Poet, Artiste, Aesthete, Programmer.
There is no
What happened? Cherry picking. The cost of putting together even a new long distance network, let alone a local network which - even given access to an existing local loop - is a complex and expensive proposition to get involved in, is astronomical. Competitors, with the exception of the cable companies, exclusively targetted big businesses and left the consumer market to token long distance services and that was it.
The assumption the US legislature made was that all telephone companies will try to serve the whole market, or see all parts of the market as having the potential for dramatic profits. That assumption, frankly, is a load of tosh.
AT&T got a monopoly in the early part of the 20th century because of a recognition on both sides that providing universal service was only an advantage to a telephone company if it owned the entire market. AT&T accepted regulation as the price for this. But while "universal service" is useful to a competitive telephone company, it is a burden to provide, and nobody wants to do it. As a result, competitive telecoms is focussed pretty much exclusively on the bodies that pay the most, ignoring the residential and small business markets.
Legislators made the mistake of thinking that the only barrier to entry in the residential market was the absense of an open local loop. But this was untrue even in 1996 - cable companies have always had the capability to operate telephone networks over their loops, and many American cable companies have experience from running exactly those types of system in the UK.
William Kennard, FCC chair, once introduced Britain's OFTEL boss of the time as proving competitive, deregulated, telecoms could work. OFTEL, of course, prove no such thing, and most of the move forward to de-regulated telephony has been the result of ideological bunk, rather than because anyone has a clear, sensible, way of making it work.
How do you fix it? There are several options. You could forget the crap and go back to heavy regulation. You could, on the other hand, remove the local loop from the telephone companies. This forces the creation of a market for the telephone companies to serve. Whether this is enough to encourage telephone companies to dip their toes in the water of residential telephony is open to question, but it's a better situation than what we have now.
What you don't do is just assume that competition will automatically develop if you "open" a market. Competition will only ever appear in markets where there is a great deal of money to be made, and the residential telephony business is not where that's at.
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You are not alone. This is not normal. None of this is normal.
It's even more fun here in Britain. all of the last mile line is owned by British Telecom (who used to be part of the General Post Office, whose sole owner was the government. The post office and BT were split and privatised about ten years ago, BT were supposed to have allowed other providers access to the last mile of line about June this year. The current timetable is looking like being June next year, and even then, there's no space in the telephone exchanges for all the providers who want access. Therefore, who gets access will be decided on a beauty contest (i.e. whoever offers the best prospective services, which is in no way related to who can actually provide these services), with a roll of a dice settling any ties.
It would have been a lot better if the government watchdog over seeing all this actually did anything (see any days version of www.theregister.co.uk for more sarcastic details)