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.

Comments

Time for Bush admin to step up to the plate

[revscat]

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.

Re:Time for Bush admin to step up to the plate

[scoove]

The government should have nothing to do with bailing out companies that invested too much in tech with the wrong ideas in mind.

That's nice, in theory. However, the government created this mess in the first place.

Consider the state of the RBOCs in the first place - a monopoly granted a hundred years ago had at least a bit of time to get entrenched. Breaking up AT&T only segmented the monopoly into smaller (but also less dormant) entities.

The Internet nearly came under the same monopolistic jurisdiction back in the early 90s (namely ANS and the "Baby Bell NAP" architecture - thanks to UUNET, PSI and Sprint for killing this animal). Again, government (then (D) Sen. Al Gore and the NSFNET folks) promoted the vision of a Bell-centric model.

Now we've got plenty of (D) Senators and Representatives, like the Swamp Thing from Bellsouth (evidently a foreign nation within national bounderies) and a few (R) types on the paid Bell lobby working hard to fix what Gore couldn't complete. Bell dominance of the Internet last mile is a key component.

Per a few other points:

What's the long distance market have to do with an ISP like Covad?

Well, for one, Covads and other "OSI 2+ last mile" entities can help slaughter the long distance toll model, at least domestically. Don't forget that the Bells are still hungry for the long distance market - mostly since their upper management is still about 10 years behind (hey, they used to be 40 years behind - that's progress!).

government...bailing out companies that invested too much in tech with the wrong ideas in mind

What bailing out? Much of the problem comes from exclusive local partnerships with the Bells and cable providers, limiting right-of-ways to a single entity in exchange for a lucritive franchise agreement (read "bribe to the government"). Bailing out DSL providers - how? Through chapter 11? By demanding a community resource be opened to competition (which calls that franchise agreement network what it should: public property).

Seriously, how would you feel if I entered into an agreement with your community to be the exclusive grocery store provider, in exchange for giving 3% of the profits to the city government? What a deal for me: no competition, high margins, and the government gets to beef up its budgets (building bigger political empires!). I'll even throw in a donation to your re-election campaign too, and there's no quid pro quo (wink!). What this regulation proposes is recognizing the grocery store for what it is: community granted property that belongs to the community. It's a lousy way to fix the problem created by an unethical prohibition of competition, but there probably isn't a pretty way to get out of this Bell mess.

bail out monsters like Chrysler or Continental

And how many hundreds of thousands of dot-com jobs have been lost, in many cases thanks to the unethical action of the Bells?

rework federal law simply because yet another dot-com servicer went belly-up

Yea, you probably wouldn't want to change the pollution laws either even though all the fish in the ocean were floating belly up. Really, the only laws that need "changing" are the ones protecting bloated monopolies from complying with the law mandating they open up their community-granted networks.

Unfortunately, as long as these Bell congresshacks keep getting re-elected, we can expect the government to keep rigging the system in the Bell's favor.

*scoove*

Re:Time for Bush admin to step up to the plate

[Cramer]

Let us remember, to the RBOCs, LD equates to the ability to cross LATA boundries without involving a third party (LD company.)

For instance, look at Bellsouth.Net. It's their dialup hardware on their property with their dialtone, however, they have no wide area IP network because they cannot cross LATA boundries. Each POP is connected to the world via a "Global Service Provider" (UUNet in my area.) Connecting all these sites themselves would save them millions. (And give them a very big stick to weild over other ISPs.)

Alot of the problems in the DSL market stems from companies not being prepared for the bullshit required when dealing with Telcos. DSL is 100 times worse than normal telco services because hardware has to be installed on the Telco turf and that hardware needs power and connectivity to your infrastructure. Buying lines from Bell is no worse than buying anything else from them. There have been problems with some RBOCs prioritizing their own customers above competitive parties, but those have dwendled -- I've not (directly) seen any problems with BellSouth delaying installation of local loops. (Think about it, the RBOCs have a very powerful advantage in the DSL market -- they don't pay colo or loop fees.)

Re:Time for Bush admin to step up to the plate

[Cramer]

Face facts, some things simply are monopolies -- the "natural monopoly". We call them utilities and regulate them. Grocery stores don't present a conciderable infrastructure like a water company or power company.

How would you like having nine (9) local water companies competing for business? Each one will have to bury their own water mains and distribution lines. In the process, they will certainly end up screwing things up -- cutting people's water lines, cutting through distribution lines, etc.

How would you suggest we deal with this mess? Have the government install and manage the utilities infrastructure? Oh, that'd be funny.

Re:Time for Bush admin to step up to the plate

[well_jung]

Well, if the water company did a shitty job and didn't provide me with the services i want/need (which it's competitors can/would), then yes, I would like the option of another water provider.

There must some kind of checks/balances on corporations that are granted local or regional monopolies. That means they should be forced to open their infrastrcture where feasable. Even if were just huge fines, at least my city could fix some frickin potholes.

Re:Time for Bush admin to step up to the plate

[scoove]

We've got lots of your "natural monopolies" (schools, water utilities, electrical utilities, etc.) and most of them are excellent examples of how the concept doesn't work. Right now, nearly every utility and governmental service agency in our community is demanding more money for less service. No thanks.

At the same time, we have utilities that exist in a competitive environment.

Consider the telephone utility. I'm served by two wireline last-mile providers (the RBOC and my cable TV company). Both have a termination to my house. Natural monopoly? Not at all.

If both can figure out how to get a wire to my house, so can the electric companies.

If there is a problem with the logistics of running multiples (e.g. water & sewer), then the city should bid the management of the right of way for a period of time to prospective vendors, and upon my deciding to hook up to the public water or sewer grid, I can pay an appropriate fee for that access.

Remember, there's nothing from stopping me from using my own "sewer" (septic tank) or water (well or even local water tank delivery, albeit expensive). In this case, I'm not forced into anything I don't want to buy, and no monopoly is coercing me.

In the process, they will certainly end up screwing things up
Competition has no monopoly on screw-ups:-) (non-uniqueness). My local water monopoly does just fine without any competitors.

*scoove*

Re:Time for Bush admin to step up to the plate

[unitron]

The phone company and the cable company each has a line running to my house as well, but if I want telephone service I can only buy it from the telephone company and if I want cable television I can only buy it from that cable company.

If I want to connect to my Internet Service Provider I can only do it via dial-up. Phone company's been saying Real Soon Now on DSL for about a year and a half, and if it ever does get here I'll probably have to go with the phone company as an ISP if I want DSL. If I want something as fast as cablemodem, I can choose Roadrunner or Roadrunner. The cable company just added some more non-scrambled channels (including an exciting golf channel or two, but still no UPN so that I can check out 7 days or the upcoming new Star Trek) and raised the monthly rate. When local subscribers howled the county commissioners (who granted TWC the local franchise) said we don't have any control over that, go bother the FCC or somebody, and the TWC local manager offered the usual "added value for the customer" song and dance, and everybody ducked the "why can't we choose which channels we want to subscribe to and avoid paying for a bunch of stuff we don't want" question.

Smells like monopolies to me.

Interestingly enough the phone company has been using co-axial cable 75 ohm RG-6) messengered with BUG (buried under ground) wire (the actual twisted copper pair used for the telephone) for new installs for several years around here now, so there's a bunch of dark co-ax in the ground around here but no move to light it up with anything.

The phone companies are smart.

[Perianwyr Stormcrow]

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.

Re:The phone companies are smart.

[Alien54]

This is confirmed indirectly in the article, although the business model also has some potential problems.

Covad charges its customers less than the actual cost of setting up a new connection and makes that money back over time. McMinn says the company takes a bigger hit to set up business customers, but gets paid back more quickly than through its consumer business. So the company must strike a balancing act between its need to acquire customers, the cash it has to work with, and the time it takes to recoup its investment in new customers.

The times for telecom upstarts have become leaner as many companies across the industry have trouble building their networks

You could even have free installation for all of this, but then I wonder how long it would take make back the money. Throw in the large companies messing with the small companies, and there is a big problem.

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Re:The phone companies are smart.

[quartz]

Well, not everyone had problems, you know. Personally, I've never had a single problem with my DSL provider (Directv DSL, formerly Telocity). Setting it up took exactly how long they said it would take, everything worked right out of the box with my Linux set-up, line speeds are as advertised and I've only had to call customer support once in 4 months (and that's because I was too tired to realize that power cycling the modem would solve the problem). Besides, they give me DHCP, a fixed IP address, they explicitly allow me to run servers as long as I keep it non-commercial. And they never blamed Verizon for anything.

I know other people have had problems, but there are some of us who are very happy with our current DSL setup and I think that's worth mentioning. Back when I was shopping around for a broadband connection, I almost didn't consider DSL because all I've read on the net about it was horror stories. The only thing that made me reconsider was that there was only one alternative: cable, and I don't care for cable very much (shared bandwidth + dubious provider practices, like closing port 80 for everyone when they feel like it).

Re:The phone companies are smart.

[Cramer]

I (currently) work for a DSL provider/CLEC/LD company (BTI). I've seen both sides of the coin. The local RBOC can drag their feet and break things in ever more inventive ways. They also install loops flawlessly. In my limited experience (I'm not involved in provisioning the copper loop) they get it right most of the time.

Most of the line problems I've seen were in the CPE wiring. A few have been caused by the jack installed by Bell. They like installing those jelly filled things. Well, that jelly is marginally conductive at high frequency. And sometimes the modem/router is bad.

(BTI sells DSL for businesses, so don't freak at the cost.)

other dsl providers

[neurocide]

i'm on ATG (www.callatg.com) and it's working great. any speed i can get for $49/mo line and isp cost.

they also offer local/long distance telephone service here, and its cheaper than qworst. guess someone needs to realize that covad wasn't the last non-bell provider left.

dsl sux0rs.

[jon_c]

Nov 1: Move to Austin from Seattle.

Nov 2: Call speakeasy to request DSL

Nov 3: Get off the phone with speakeasy.

Nov 15: Speakeasy puts in order with southwestern bell

Dec 25: Southwestern bell hooks up the loop, but does it wrong.

Jan 15: Southwestern bell hooks up loop correctly.

Jan 25: some dude comes to my house to install stuff, but can't get it working becaues my house was built around the 1850's or some such crap. Tells me i -might- be able to get DSL but it requires sacraficeing a chicken around the next full moon, and thats not for another 15 days!!

Jan 26: I call about Road Runner cable, after ONE ring a person answers the phone and tells me I can have a STUPID FAST connect TOMMOROW.

Jan 27t: I get my cable modem with NO PROBLEMS, and bitchin 250k sec d/l speeds for 50 bucks a month. w00t!

-Jon

Re:dsl sux0rs.

[libre lover]

I have Road Runner in San Antonio and I can attest to their service.

One time I called to complain about dropped packets. The person who answered the phone asked me for my IP address, pinged me for a few minutes, then told me that my machine was dropping packets, not my cable modem. Turns out this was a known issue with certain 3c905 cards in Linux; I replaced it with an eepro which fixed the problem.

Also, these guys will not hesitate to replace bad cable, even if it's in your yard or home to fix a service issue. They have handheld spectrum analyzers and can haul out a TDR if necessary, and they know how to use them. I can't even imagine this level of service from the phone company.

BTW, it's 250K, not 250k :)

Re:dsl sux0rs.

[IronChef]

I had a competent lesbian technician dispatched from ATT@Home one time. She did a great job.

My friend down the street had an @Home horror story... weeks of intermittent service interruptions that they couldn't fix. They couldn't even TELL him APPROXIMATELY when a service guy would be out. Their system, in Seattle at least, is not capable of that. Weeks? Months? Hours? They could tell him nothing. he'll be there when he's there. Hope you're home.

Eventually he went up to a cable company van he saw on the street and talked to the tech, who came by the next day on his OWN time and gave him a cable amp that fixed his problem.

I have stupid fast downloads, but that is the ONLY good thing I can say about ATT@Home. Looking forward to going with Speakeasy DSL for the benefit of my servers.

Broadband USA

[qwerty123]

I think this just goes to show that the internet industry is very very dependent on government support. Without government intervention the internet would not have been created; furthermore, time and time again, government intevention was crucial to make sure the internet ran/runs smoothly. and there needs to be large over seeing force (and I'm not talking Mr. Smith's hand). Broadband is no different. The Internet is like a highway. Business and people use it, but ultimately the government must over see it.

Re:Broadband USA

[dada21]

This is totally incorrect. What we need is FULL government deregulation of the phone industry.

At this point in time, the government STILL regulates the industry. There are still price caps, still difficulties in setting up an infrastructure.

If the gov't keeps price caps up, it will be near impossible for ANY company to set up infrastructure. Because of this, the costs for companies WITH current infrastructure are low (the bells) but for others are high (the competitors).

The bells lobbied VERY hard (check www.opensecrets.org and see your local bell chairpeople) to make sure it stays this way. People believe that the gov't is staying out of the phone business, but they are 100% not.

If the gov't had stayed out in the first place, there would never have been this kind of trouble. What really troubles me though is that everyone believes having a phone or DSL is a right, not a priviledge. You get what you pay for.

I wish they never gave away free installs, free hardware, etc etc. 768k of ADSL should have cost, no matter what, $300 to install, $200 for hardware, and $100-$150 a month. Then we'd have people STILL happy to have the speed and good service. But free hardware, free install, $50 a month? Where's the profit so they can branch out?

Re:Broadband USA

[crawling_chaos]

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.

Regulation is not the answer

[iamklerck]

While there are indeed many problems in the US broadband market, regulation simply is not the answer. Government regulation and subsidizing of telephone is what got us into this mess in the first place. Government is the same reason we haven't seen any kind of advance in non-portable telephone technology almost since its invention.

The real solution to the problem is a completely open and free market. Let the consumers and the market dictate the answer. Whatever you do, though, keep the government out of it.

Re:Regulation is not the answer

[Private Essayist]

The real solution to the problem is a completely open and free market. Let the consumers and the market dictate the answer. Whatever you do, though, keep the government out of it.

So how should illegal actions taken by the telcos be handled? By consumers marching up and down in front of the house of the president of the telco? The DSL market is shrinking because the telcos are breaking the law in order to avoid doing what the law says they must do for competition. They don't care. They can pay their piddling fines, years later, as a simple cost of doing business. Meanwhile, after running their competition into the ground, they get monopoly prices, and there isn't anything the consumers can do about it.

And don't say this is the marketplace in action -- it isn't. The consumer made their choices and went with alternative sources of DSL instead of the telcos. Instead of competing fairly in response, the telcos broke the law and forced us back into their arms. So if you don't want the government to take any actions (including enforcing existing laws??), how would you solve this problem?

You say the real solution to the problem is a completely open and free market. We don't actually have that at this time.

Re:Regulation is not the answer

[FFFish]

Regulation of a monopoly is the *best* answer. It's the best answer for all public utilities.

Now let me qualify that statement: *good* regulation is the best answer. The half-assed sort of regulation that your FCC does is the worst answer, because it harms the public far more than it helps them.

Regulation works when it focuses on balancing the needs of the public with the needs of the monopoly. Generally, the public needs are more complex than the monopoly needs.

The monopoly needs to make a reasonable profit. It doesn't need to make huge profits: one of the consequences of being allowed a legal monopoly is a low rate of return on investment. This is balanced by the quality of the investment: it's 100% guaranteed to profit.

The monopoly is guaranteed a profit because it's the only game in town, it's an essential public service, and the regulatory body ensures that it makes a profit.

In return for the guarantee of profit, the monopoly must provide certain things to the consumer.

These consumer needs include: fixed and reasonable costs, guaranteed coverage, guaranteed customer service, guaranteed quality of product, and so on.

The upshot is that in places where well-regulated monopolies are run, prices are lower than in the open market, service quality is greater, nearly everyone has access to the service, and the product is outstanding.

An example of an outstanding regulated monopoly is BC's "Insurance Corporation of BC." It provides mandatory, basic auto insurance. Its rates are based not on driver age, sex, or horsepower, but on (a) how long you've been a safe driver and (b) the costs of repairing your model of car.

As a result, automobile insurance costs *for safe drivers* in BC are lower than most anywhere in Canada and, I daresay, in the USA.

This is a fair and equitable monopoly, well-regulated and run in the interests of the public. If you're a safe driver -- young or old, male or female, driving a Civic or a Viper -- you get insurance at great rates. If you're an unsafe driver, your insurance premiums are going to reflect that -- and, again, without bias as to sex, car model, or age.

When the needs of the public are represented by a good regulatory body, monopoly services are a blessing to both the public and the monopoly.

Monopolies

[YIAAL]

The Baby Bells have fought open competition from day one. I think DSL is a great technology, but who would have thought we'd be looking to cable TV companies for relief from monopoly?

There are a lot of people who want DSL but can't get it, or who have signed up with services like Telocity only to find their service mysteriously interrupted (and be told by Telocity that it's the Bells' fault). Some politician could capitalize on this, and probably will.

Re:Monopolies

[stripes]

I think DSL is a great technology, but who would have thought we'd be looking to cable TV companies for relief from monopoly?

More importantly, who thinks cable internet access is going to stay priced low after the DSL providers all fold? (or have any provision for having more then one IP address, or support anything other then Wintel, and if your lucky Mac...)

Re:Monopolies

[King Babar]

More importantly, who thinks cable internet access is going to stay priced low after the DSL providers all fold? (or have any provision for having more then one IP address, or support anything other then Wintel, and if your lucky Mac...)

Well, first off, I doubt that they will *all* fold; the Baby Bells will still sell it. As for support of anything but Wintel, I think you might end up being a bit surprised. Mac owners are pretty "boutiquey" people (i.e., they've got the cash) and whine loudly when things don't go their way. (I know; I'm one of them. :-)) Now, since the way of the Mac in the OS X world will essentially be FreeBSD, I'm pretty sure that the combination of Mac plus BSD/Linux users will be big enough to tolerate, if not hand-hold.

As far as prices go, I think there's also good news in that cable companies are feeling intense pressure from the dish. In the long run, I think they're on the losing end of the battle as far as broadcast programming is concerned, but probably in better shape for internet access until everything goes wireless. In the mean time, they really will need the market share, and I don't think they'll have time to get especially greedy.

But, of course, I could be completely wrong...

Re:Monopolies

[unitron]

"...who would have thought we'd be looking to cable TV companies for relief from monopoly?"

Who would have thought 2 or 3 decades ago that nowadays such a large percentage of American households would be getting cable television from American Telephone and Telegraph, but not their long distance telephone service?

I think all these companies are just going to keep going from business to business until they find one in which they can be a monopoly.

Re:Monopolies

[stripes]

Now, since the way of the Mac in the OS X world will essentially be FreeBSD

Not really, there is a compatibility layer on top of Mach so you can use FreeBSD device drivers and file systems, but that isn't the only driver interface. They have another one (Kext? I forget the name) that lets you use a fairly large subset of C++ to write your drivers.

It is possible that they might do a USB device (rather then ethernet), and end up making a OS X driver that can't be ported to FreeBSD trivially because it is C++ code.

Or they don't port it because they are bastards, and don't release the source for the same reason. :-)

At least one satalite IP service uses USB devices, and has no BSD support (a 3rd party supports the older USB device, and is working on the newer one).

As far as prices go, I think there's also good news in that cable companies are feeling intense pressure from the dish. In the long run, I think they're on the losing end of the battle as far as broadcast programming is concerned, but probably in better shape for internet access until everything goes wireless. In the mean time, they really will need the market share, and I don't think they'll have time to get especially greedy.

I'm not so sure they want market share more then the money from the increased prices, look at what they charge for the same thing dish charges... but I would be happy to be surprised. As long as I can get multiple fixed IP addresses from them...

I'll probably find out soon, since my home ISP is switching from Northpoint to Covad, and I'm not sure what they will do if (when?) covad falls...

As for support of anything but Wintel, I think you might end up being a bit surprised. Mac owners are pretty "boutiquey" people (i.e., they've got the cash) and whine loudly when things don't go their way. (I know; I'm one of them. :-))

I am too (I bought a PowerBook to run OS X on), I'm being pessimistic.

Familiar tale from across the pond as well

[Rogerborg]

Just as an FYI, this mirrors the situation in the UK. The incumbent monopoly, British Telecom (or just "BT" as they now style themselves) has been stalling and foot dragging on DSL as well.

• They claimed they'd roll out DSL fast, then spent years testing to make sure they'd "get it right first time.". They then delayed further to switch to a screwed up USB (rather than ethernet) system that nobody wanted, and kicked off with massive installation delays, broken promises and network snafus. If this was them getting it right, god knows what they'd have done if they'd rushed it.
• They went with a weedy 512/256Kbit/s ADSL system with a maximum 2.5km range from the exchange, meaning only urban customers can get DSL. They're now pushing this to 3.5km (woo hoo), but still have no concrete plans to bring affordable broadband to low density suburban or rural areas, other than a prohibitively expensive satellite solution.
• When they were finally forced to open their exchanges, they claimed that there was no space. They then offered local loops in the 50 or so least profitable exchanges, while selling off exchange space in the others as luxury flats!
• Despite the market and local loop being opened, try actually getting DSL from anyone other than BT. They've made the process of taking a local loop so expensive and awkward that nobody can compete that way. They rent DSL loops wholesale at £35~=$53 a month plus a connection fee, while retailing at £40~=$60 a month, which precluding any competition from resellers. Their biggest DSL reseller customer, Freeserve, has recently had to hike their retail price from £40 to £50~=$75 just to break even. So, you can pay £40 to BT or £50 to Freeserve for exactly the same service. Tough choice, huh?

It sounds like the same sorry mess you have with the Bells. On the bright side, the UK's two main cableco's have just teamed up to market broadband cable together, so at least there's some competition, even if it's not in the DSL space.

Re:Familiar tale from across the pond as well

[jbrw]

The expectation is that ntl and Telewest (the two main cablecos) will eventually merge, and that the joint marketing is the first case of them testing the waters with each other.

What any possible merger would mean for cable modem prices is anyone's guess.

...j

Of course Covad will go dark...

[shagoth]

That's what chapter 11 meant for Northpoint and Rhythms and even wireless provider Metricom. Only the telcos will survive DSL and heck based on my experience north of Seattle, they may not bother to deliver at all.

I don't get how there's such a huge problem.

[Telek]

Seriously not trolling here, but up in the Great White North I have had a cable connection at home now for > 2 years with very few problems at all, took 2 days to get it set up and I regularily see 250k download speeds. Actually there's this one site that has this insane connection that can upload to me at 350kb/s. I have also had DSL, had it set up in under 3 days without issue, and don't have any problems. And all this for $50/month (that's $33USD) with no contract, quit anytime, and your first 2 months free! And the 3rd-6th months are at $40CAD ($27USD) because we don't get charged for the cable modem until after that. If you're a student, you get an additional $5CAD off the price. (Plus there is $0 install fees, and you get a free 3com network card)

So why is it then that we're being charged much less than the US, and yet the US is falling left/right/center when it comes to providers?

I could see maybe it being because it's our telco and our cable providers, but this has been going on for years, and they do make money off of it. Plus it's not only those. You can get P2P satellite as well for very reasonable prices and exceptionally high transfer rates.

DSL from Pacbell Keeps Getting Worse

[nitsuj]

I've had Pacbell install DSL in a different apartment/house in San Francisco every summer, for the past three summers.

1999: $39.95/mo 384K up and 1.5-6M down

2000: $39.95/mo 128K up and 384K-1.5M down

2001: $49.95/mo 128K up and 384K-1.5M down

With that trend, it won't be long before a 56K modem is better.

This agreement is good news for Covad users

[selectspec]

This agreement with the bond holders is going free up cash flow for Covad over the next year and at least give it a chance. The only people who get screwed here are the bond holders. However, they agreed to the deal (it wasn't shoved down their throats by the courts).

Re:Why DSL ? Surely there must be something better

[Mr. Slippery]

The engineer who installed my DSL connection claimed there is a better technology in the pipeline called the 'ATM - Asynchronous Transfer Mode'

ATM is hardly "in the pipeline" - it's been deployed for years.

If fact, some DSL networks are based on ATM - ATM is a circuit switching technology used to concentrate a bunch of DSL lines into one upstream link.

But, as far as I can figure out, ATM isn't a "last-mile" technology. The advantage of DSL and cable modems is that they use existing last-mile infrastructure to reach you.

But then, maybe that's what was being referred to, a way to use POTS lines to being ATM to your desktop. Anyone know more?

Re:Why DSL ? Surely there must be something better

[ethaz]

Flabdabb Hubbard wrote:

The engineer who installed my DSL connection claimed there is a better technology in the pipeline called the 'ATM - Asynchronous Transfer Mode'. This is faster than DSL because it is a synchrounous system based on 53 byte cell switching. He explained that speeds of upto OC3 (200TB/sec) and above are possible with ATM, and it is even faster than the current fastest network - Synchronous Digital Highway (SDH).

ATM is a common technology for DSL backend networks. However, ATM overhead at speeds of DS-3 or greater gets to be quite a problem. In fact, it is referred to as the "cell tax". Major ISPs who run big national backbones (OC-48/OC-192) use POSIP (Packet over Sonet IP).

IF you are buying large pipes (DS3 or larger), make sure you are getting POSIP not ATM.

Baby Bells are smart, and customers get screwed

[Infonaut]

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

That's right on the money. The Baby Bells know that the FCC doesn't really care about promoting open competition. Here in California, PacBell was promising DSL before they could provide it - I have several friends who had a terrible time getting DSL through PacBell two years ago, while I had an effortless and very happy experience with Covad.

Of course, now that the competition has been destroyed, PacBell is jacking up the price and using rediculous service packages (want static IP? you get FIVE static IP addresses and pay twice as much as with a standard PPPoE connection) to make more money off of customers like me who absolutely need fast access.

I've seen comments in this thread about cable being wonderful, and I sure wish there were high-speed cable access where I live, but there isn't. Like many people, I'm stuck with one and only one broadband choice, and that really sucks.

I for one like the idea of the last mile being a public utility.

I'll care, and probably 330,000 others will too.

[miniver]

I've been using Covad SDSL (CAIS as ISP) for 18 months, and aside from problems that were directly traceable to Verizon, I've been quite happy with the service, the performance and the price. Granted, I'm a business customer, but I was willing to pay the premium for support and additional IP address space. There's no way that a cablemodem can meet my needs, Verizon won't do (no static IPs) Rhythms is dead (Chap 11), and Telocity is dying (bought by Hughes/Directv). If Covad fails, my only other alternative would be Network Access Solutions, which isn't looking too great either.

What's *your* beef with Covad? It certainly sounds personal.

DSL is not a cost effective technology

[hillct]

DSL is not a cost effective technology. It was antiquated the day the first installation was performed, and the hardware requirements together with the service and support costs make it an unatractive business proposition. The only reason the phone companies are in it is because federal regulations require that they provide broadband where possible. I'm certain that if DSL technology hadn't been developed, we'd have fiber to our houses right now.

DSL was developed in the days when it was thought that it would be impossible to lay fiber throughout the country in any short period of time. Ir REQUIRES copper between the CO and the customer, which means that anyone living in a development between 5 and 10 years old who has a couple T1s terminated at an older DSLaM outside their community is out of luck and will have to settle for the nightmare that is Cable Modem Service. This severely limits that market for DSL, which makes it all the more difficult to amortize the exhorbinent equipment costs. These issues combine to deter telcos from rapidly deploying DSL. Rather they choose to deploy it at the slowest rate possible under federal legulations, because once it is deployed, they will have incurred sunk costs which won't be recoverable for at least a decade, which means all those clamoring for fiber to their houses will have to wait until the telcos decide they've recovered their investment in DSL. All in all, it's vary disappointing.

--CTH

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Re:This is a good thing

[mellonhead]

I'm skeptical that they'll survive. From an earlier c/net article:

In September, SBC Communications agreed to invest $150 million for a 6 percent stake in Covad. On the surface, SBC's move looked like a vote of confidence.

But there may have been other motives. Analysts said SBC's investment in Covad had more to do with creating the appearance of competition than holding out hope for a Covad recovery.

"The (Bells) are a lot smarter than people think," one analyst said. "It's a travesty and a tragedy in some ways. By keeping a handful of competitors alive, they can show that they're leaving the market open to competition while maintaining higher prices."

From the current article:

Covad expects to pay a total of $283.3 million to bondholders and have $250 million in cash remaining that will enable it to keep running until the beginning of next year. The company estimates it will then need $200 million more in financing to reach a positive cash flow by the third quarter of 2003.

I also wonder about how they treat customers when they have spokespeople making statements like this:

Some customers who used Covad's service, directly or indirectly, said the company was slow to react to frequent service outages, consistently blamed local phone companies for glitches, and generally delivered poor service.

Covad spokeswoman Martha Sessums dismissed the complaints from current and former customers, saying "there will always be crybaby boobies who are unhappy with any company.

"I'd be happy to provide you with many, many customers who are extremely happy with our service," she said.

StarBand a real alternative?

[Infonaut]

I'm not too keen on paying $100/mo for the DISH network with StarBand service included in that. Not to mention the fact that StarBand seems to run only on "PC"s, most likely meaning Windows machines. I'm assuming that rules out Macs and Linux boxes. Am I right?

Re:StarBand a real alternative?

[Infonaut]

The only deal I saw from DISH was a combined setup, but then again, I didn't go too far into their site to find out. That's great that it runs on Linux.

Glad you did throw it out there - just knowing that there are options, even if none is perfect, helps.

Ha!

[yoz]

Er, yeah, that all sounds very well, until you get screwed by the Baby Bells in exactly the same way that the others were. As this mess has proved, there's very little you can do about it.

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Re:Go play in your Sand Box...

[IronChef]

40k upload cap? Luxury. Here in Seattle (@Home) I get about 12k.

I paid for a static IP address too. However, they are attempting to move their entire userbase to dynamic IPs via DHCP. Whenever I call tech support about an outage in my area, they threaten to take away my static IP. They are phasing them out now. Scary. DSL time.

Post lacks a clear understand of the restructuring

[loggia]

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.

Re:Why DSL ? Surely there must be something better

[Phroggy]

The sole reason for DSL is, DSL uses existing wiring to your house. Most people only have three wires to their house: electric power, telephone, and sometimes cable TV. Power companies have been investigating the possibility of providing broadband Internet access through existing power lines, but as far as I know, none of them have implemented anything yet. Obviously, cable companies are offering cable modem services. That leaves the phone lines, which are owned and controlled by the telephone companies.

Re:What's left for DSL + static IP's?

[neafevoc]

Try Qwest. A sales rep from there kept bugging me about Covad was going down (I'm with Covad on their business DSL... SDSL to be exact) and I asked Qwest about their policy with static IPs.

For a one time fee of 50 bucks, I can get a block of five. (That's the same deal I made with Covad.) Now that Covad is defiantly going bunkrupt, I better call Qwest tomorrow :)

BTW... that wasn't the only reason I'm moving over to Qwest... Covad doesn't offer 512/512 and dropped me from 768/768 down to 384/384 because they say that Pacbell re-routed the phonelines... now I'm even further from the CO :(

Re:Go play in your Sand Box...

[logicTrAp]

Speakeasy says you're not allowed to run a chat server, but they explicitly allow everything else. They do reserve the right to request you to scale back your bandwidth usage if you're hammering at your maximum 24/7 but that shouldn't effect most people, even if they want to run ftp, http etc.