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Covad Files For Bankruptcy Protection
xnuandax writes: "Well, it's finally happened, DSL provider Covad Communications has buckled under its post-tech-bubble debt load and filed for Chapter 11 (See this c|net article). While this doesn't mean that Covad is turning off the lights on its 330,000+ customers, things are not looking so rosy for the last competitive (non-Bell) DSL provider left standing. Seems that the USA is setting herself up for a broadband cartel (of Baby Bells) that's going to make OPEC look like a poster child of free market competition." The announcement is from earlier this week, but they've been acting bankrupt for a while. Just like with Loki though, this doesn't mean they're out of business, at least not yet.
Well, everyone says that the Pres. Bush administration is married to big money interests. Now would be a perfect time to prove all those people wrong. If Pres. Bush can get the FCC and/or Congress to rework the Telecommunications Act of 1996 to reflect the current situation of the telecom market (namely that long distance is no longer an attractive market), he could prove himself to be an astute leader and someone who is truly dedicated to free market principles, not someone who is dedicated to campaign contributors.
I doubt it will happen, but I'm hopeful.
The fines for their anti-competitive practices appear to be far less than what they stand to gain in the future if they destroy all competition...
One would almost think that things were engineered this way from the beginning.
Everyone who I've talked to who has gotten DSL service from anyone other than the phone company has related a tale of delays and ball-dropping by the phone company... which are believable, since they are the ones with the incentive to do so! If Covad provides bad service, it will drive them out of the market. If the phone company provides bad service... well, isn't that what phone companies are known for?
All in all, it makes me wonder if the last mile shouldn't be a truly public utility, with all companies at an equal footing outside of it.
What we call folk wisdom is often no more than a kind of expedient stupidity.-Edward Abbey
Ribalah Ribalah Ribalah TIMMAH!
GOBBLES!!!!!!!!
I would argue differently. I believe that it is time that government recognized that last mile broadband service is the electronic equivalent of the local road system. In other words, a service best provided by state and local governments and paid for by state and local taxes.
And for all the knee-jerk Libertarians, yes this would open a huge avenue for government regulation of the Internet. Sorry, it was bound to happen sooner or later, and I'd rather it be the government doing the regulation than Verizon's Board of Directors. I at least have some ability to change the former.
You can only drink 30 or 40 glasses of beer a day, no matter how rich you are.
-- Colonel Adolphus Busch
The poster seems enamored with trumpeting the very old news of Covad's restructuring. Sadly, the post might make many miss the progressive way in which Covad handled its financial issues.
(1)The operating companies of Covad which supply your DSL are not going Chapter 11
(2) Instead of waiting until Chapter 11, Covad negotiated with its bondholders and made agreements to eliminate $1.4 billion in debt. This early meeting with bondholders is a very progressive and innovative move in contemporary business. Covad has received many accolades for this maneuver already.