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Verizon's Solution to Terrorism: Eliminate Verizon Competitors

Posted by ryuzaki0 on from the rim-shot dept.

The New York Times has an article about Verizon lobbying for rate increases and to remove all requirements that Verizon provide telecom services to competitors, claiming that being a large, sluggish monopoly is somehow advantageous in responding to disasters, although Verizon hasn't managed to restore phone and data service in large areas of Manhattan yet. In a related story, an association of small ISPs has surveyed its members and come to the revelation that the Bells are stifling competition.

25 of 209 comments (clear)

  1. Not necessarily right, but.... by nbvb · · Score: 5, Interesting

    It doesn't mean that Verizon is right in wanting to squash all competition, but there are things called natural monopolies.

    Your electric company is one. Water services.

    I don't know what anyone else in the US is going through, but here in NJ, the electric company (PSE&G - Park, Sleep, Eat, & Go Home) for all their faults, works. My electricity is reliable as can be. And when it does fail, they're out here _immediately_ to fix it!

    Natural monopolies, as long as there's oversight and consumer protection, can work.

    In fact, sometimes it's BETTER to have a monopoly than not. Look at the mess in California's power when they tried to introduce competition.

    Letting companies like Microsoft (which is NOT a natural monopoly) run around, are bad. They're just an unchecked bully.

    Anyway, back to my point... I don't think Verizon being the only game in town is necessarily a bad thing... as long as they're kept in check, rates are kept reasonable, customer service is a MUST, and they provide the services required.

    And they may have a point --- if all the equipment in the facilities were theirs, they could certainly have it back up and running quicker than following some silly FCC rules & procedures for working with other companies....

    1. Re:Not necessarily right, but.... by gr · · Score: 4, Insightful
      Your electric company is one.
      No it isn't. My electric company (PECO in Philadelphia, PA) is required to provide me with notification of the availabity of other companies from whom I could be purchasing power rather than them. The system is arguably even more difficult for PECO than what Verizon has been told to make available to consumers, since PECO is the one who has to pay for the mailings to tell me about their competitors.
      Anyway, back to my point... I don't think Verizon being the only game in town is necessarily a bad thing... as long as they're kept in check, rates are kept reasonable, customer service is a MUST, and they provide the services required.
      You're forgetting the fact that Verizon didn't get where it is any more naturally than Microsoft has. It is one of the Bells, you know, the original case study for why monopolies should be broken up? And it just recombined with a long distance carrier to expand its still-extant monopoly vertically.
      --
      Do you have a /. uid shorter than five digits? No? Then piss off.
    2. Re:Not necessarily right, but.... by ewhac · · Score: 5, Insightful

      Natural monopolies, as long as there's oversight and consumer protection, can work.

      Your qualifying clause in the middle there is, of course, the key to the whole thing.

      You may perhaps be forgetting that the telecommunications industry was ostensibly deregulated around 1996. That was the huge omnibus Federal legislation that included, among other things, the Communications Decency Act. It was touted as being a massive win for consumers as competition would emerge for all services, driving prices down, and help spur the development of new services. "Your cable company and phone company will compete with each other! Prices will fall! What could possibly go wrong?"

      What went wrong is that the telecomm companies started merging. Before "deregulation," this was prohibited. Now, rather than engage in the messy and uncertain business of actually competing with each other, they just became the same company.

      Now, let's say you're an ILEC. Someone walks up to you asking for a high-bandwidth digital connection. Naturally, you're going to steer them toward your T1 and T3 offerings which are pure profit for you. "But that's ridiculously expensive!" you protest. "Tough sh!t, where else ya gonna go?" they reply.

      The ILECs didn't start offering DSL until the CLECs, like Northpoint and Covad, did it first. xDSL service from the CLECs continues to suck because... Well, why aren't you buying a T1?

      In fact, sometimes it's BETTER to have a monopoly than not. Look at the mess in California's power when they tried to introduce competition.

      Kuro5hin is currently down, or I'd point you to a most excellent article there explaining why this happened. Basically, the deregulation plan in CA was completely botched. They made the power delivery company (PG&E) buy power in the most expensive manner possible, then imposed consumer price caps, disallowing them from passing on those costs to consumers.

      However, it should be noted that PG&E used to be both power generation and transmission (the plants and the wires). After deregulation, PG&E split into a power generation arm and a transmission arm, both wholly owned (but separate) subsidiaries of a parent company. So while the transmission arm was going $5 billion into debt paying for power, much of that money was being paid to the power generation arm, which reported record profits. When asked, "Why aren't you cross-captializing?" the parent company had no coherent reponse. There were also other little shenanigans going on, such as power plants taken offline, ostensibly for maintenance, to make power scarce and drive the prices up. And don't ask what happened to the State of California's budget surplus.

      So, yes, natural monopolies are fine, iff (if and only if) they are well-regulated.

      Schwab

      --
      Editor, A1-AAA AmeriCaptions
    3. Re:Not necessarily right, but.... by G+Neric · · Score: 4, Insightful
      So, yes, natural monopolies are fine, iff (if and only if) they are well-regulated.

      no, natural monopolies are not fine. The point about natural monopolies from econ 101 is that they are inevitable (because economies of scale make the biggest producer the cheapest), and therefore they require regulation for any hope that the market price will be close to marginal cost. But that regulation is guaranteed to be imperfect (political rather than economic) and somewhat static or at least "behind" and is no substitute for actual competition.

    4. Re:Not necessarily right, but.... by zerocool^ · · Score: 5, Insightful


      Reading straight from my Microeconomics textbook, "A monopoly is a firm in an industry where the entrance of competing firms is blocked."

      From the article:
      In Washington, Verizon lobbyists have asked federal regulators to make it more difficult for competitors to lease space on its network, arguing that its success in restoring phone service in Lower Manhattan proves that only a big company could handle maintenance, recovery and security in the wake of such a disaster.

      Looks pretty cut and dry to me.

      --
      sig?
    5. Re:Not necessarily right, but.... by taniwha · · Score: 4, Interesting
      Basically, the deregulation plan in CA was completely botched. They made the power delivery company (PG&E) buy power in the most expensive manner possible, then imposed consumer price caps, disallowing them from passing on those costs to consumers.



      I remember the fight over the CA deregulation bill very well - PG&E fought FOR it and was in favor of the rate caps (really fixed rates), the consumers groups fought against them - PG&E spent a lot more money (millions!) and won. Any other story is just revisionist history



      Why did they do such (now obviously) silly thing? because at the time energy prices were low and the fixed energy prices were low and the fixed prices that they got the state to put into law gave them a fixed profit - they were trying to extend their monopoly for a few years in face of deregulation. They took a bet that energy prices would remain low - it was a business decision, they didn't have to force through the fixed prices into law. As we can all see now it was a bad business decision and they are now in bankruptcy court - it serves them right - they were greedy and screwed themselves. Personally I have no sympathy.

    6. Re:Not necessarily right, but.... by blang · · Score: 3, Insightful

      You are absolutely correct. Propbably the first comment do far that deserves +1 Insightful.

      People were wrong about thinking that half-assed competition in California would be a good idea. The were wrong again when they thought that competition caused the crisis.

      In true developed countries, there has been deregulated full-competition energy supply for a meny years now. And before they got that far, there was public debate about the pros and cons,
      and care was taken to avoid pitfalls.

      US politics is different. Powerful lobbyists can butter up legislators to stall the process or get it their way. In other countries we have the occasional kickback or bribe scandal. In US politics you rarely have a curruption scandal, because it's all legalized. One may bribe openly by contributing to campaigns. I laugh everytime an american is shocked about corrupt politicians in African countries.

      In an advanced, modern nation, suppliers, brokers and delivery companies are free to trade contracts on different markets. The spot market which takes care of short term supply, to balance the grid, the short term market, which has a horizon of a couple of weeks, and the long term market with a horizon of a couple of years. On the spot market you can get energy almost for free when there is a surplus, but prices can easily jump to 10x regular prices in a crunch. End consumers get to chose their provider, and can bind their contracts to the long term market, or chose to pay a variable market rate.

      The only thing the california crisis proved, was that legislators are incompetent and currupt, consumers are stupid, and that energy companies are greedy. We surely did not learn anything new.

      But we all digress. On Verizon, it is no coincidence that they put forward these proposals now. They have all their ducks lined up. The current FCC board is very friendly with the baby bells, and so is Bush's government. If you want to get to the bottom of this, follow the money.

      --
      -- Another senseless waste of fine bytes.
    7. Re:Not necessarily right, but.... by Detritus · · Score: 4, Interesting

      Regardless of who lobbied for the flawed deregulation scheme, it wasn't just the "greedy corporate overlords" who were hurt. It was also PG&E workers, small stockholders and pension funds. The State of California, and its citizens, deserve much of the blame for not taking corrective action in a timely manner and letting the utilities slide into bankruptcy.

      --
      Mea navis aericumbens anguillis abundat
    8. Re:Not necessarily right, but.... by mpe · · Score: 3, Insightful

      A natural monopoly comes to be when the market decides that a single product is more advantageous than a diverse one. The OS example is a pretty good one. There were advantages from application development, training, standardization of hardware on having a common operating system, and MS took advantage of it.

      Except that they did so by bending and occasionaly breaking the law. So it's hardly the case that the market decided. For that to have happened there couldn't have been things like the exclusive OEM contracts...

  2. Re:Verizon... Microsoft Telco? by sbrown123 · · Score: 5, Insightful

    Get cable. Sounds like in your area its cheaper and more powerful. Why even bother with Verizon? I have them in my area and picked cable instead of their poor DSL.

    This is not a troll fighting that cable is better than DSL. I support cable since its an alternative and forces the phone companies into having to compete which, in the long run, should allow for cheaper DSL and better service.

    If you have an alternative than take it.

    As for Verizon using the 9-11 terror attack as an excuse to stiffle competition: what a bunch of B.S. Greedy companies will use anything to get ahead. Microsoft was all behind calling computer viruses terrorist activity just to try to avoid fixing the problems they were having. Lord forbid they spend more time making their products more secure!

  3. Large areas? by jordang · · Score: 5, Informative

    Not that I'm a fan of Verizon, or use them for any type of service whatsoever, but to say that large areas of Manhattan are still lacking phone service is quite an exaggeration.

    According to the NY Times article, only 10,000 of the 300,000 (or 3%) damaged lines have not been restored, most of those in Chinatown the surrounding area. I personally live only a few blocks south of where the WTC once stood and never lost phone service for a second, and everyone else that I know in NYC that had lost service had it restored very quickly. I see Verizon workers working 24/7 in this and other areas trying to restore lost services.

    Sure, Verizon is no angel, but gimme a break

    Jordan

  4. But what about change by pres · · Score: 3, Insightful
    For things like power (though now we do see power generation buy third parties) and water and even the phone where you have to run copper wires this is true. No one else could afford to run all this stuff and once one company has run it, getting it to give access to others will almost never work out (would you give it up if you had it).


    However, while there are usually strong laws requiring these companies to provide good basic service, there is nothing requiring them to add new services. Sure it would be nice if they added DSL, and if every company had their own copper lines EVERYONE would be offering DSL because they would want the customers. But there is no drive for these companies to offer things like DSL until it is clear there is a HUGE market and it will be worth these while. They have no drive to start offering it until then.

    So these monopolies are great for a while but at some point things break down. I am hoping the wireless world will fix this at some point. If you have a large amount of bandwidth that you can use without having to run actual cables but just have some central access points we could see other companies actually break in (ie. we do at least have some actual choice in wireless plans, not just having the same company providing the service regardless of which long distance company we choose).

  5. Natural monopolies by psicE · · Score: 5, Insightful

    Phone lines running to your house are natural monopolies. Phone companies providing services and billing you for your calls are not. Before making any regulation, make a distinction between the two. The phone lines and dial tone can be provided best either by a single company that's heavily regulated, or by a municipal line-rental company (think Tacoma's municipal cable). The service and billing of calls, however, is in no way a natural monopoly, and eliminating choice in this will not help anyone.

    Another interesting thought, though - phoneline-providing companies are not completely natural monopolies. I have AT&T Broadband for my local phone company, which means that my phone service comes over cable lines, which I'd have running to my house anyway; so if Verizon didn't have any competition in local phone that used its lines, or if there were no local phone lines at all, I could still have AT&T.

  6. Stifling competition by Anonymous Coward · · Score: 3, Interesting

    I work for a small clec and the survey comes as no surprise to me. I may be paranoid but it always seems like Sprint is trying to screw us. If something goes down and we enter a trouble ticket on it they just say something to the effect of "Well there's nothing wrong on our end." If we pursue the matter further they say "Well, we looked and it must be you." By some mystery of nature after they "look" what ever outage has occured will start working again. We have to request that they hook up customers so we can provide dsl service. Half of the time they record the work as done and when we go to setup the customer on site it's not. Of course if we request they fix any of these things they just look, it magically starts working and we get charged. It makes us look like idiots to our customers when it's really a situation that is out of our control.

    Anyway...

  7. natural monopoly vs other stuff. by Multics · · Score: 5, Interesting
    I think Verison did a so-so job recovering from 9/11. There are still gobs of data circuits that are not up and have no scheduled ETA for being back. Ditto 10k or so voice circuits. We'll sadly never get a fair accounting of Verison vs Other connection delays.

    That said, it is an enormous undertaking rebuilding around several large central offices that were simply obliterated. In the bad-old-days where there was mother AT&T, this kind of mess would have brought people from all over the country in to fill the gap in raw bodies. We're left with the impression that this particular disaster was nearly 100% covered by Verizon people. Would calling for help to other operating companies have expidited the return to service?

    All that said, at the beginning of deregulation was a proposal (squashed by lobbying) that central offices become 'open facilities' and all the copper in the street also become 'open'. Then these facilities would be serviced by a separate regulated monopoly which would level the playing field between the big, the small and the miscellaneous. Then outages like 9/11 would be dealt with by the 'open network operating company' as well as all those firms that provide dial tones.

    I think it is probably time to revisit this as the ONOO would have sufficient scale to deal with network failures while still keeping real compition alive.

    -- Multics

    P.S. I have customers in Verizon and Ameritech/SBC. Give me Verizon *every* time. Ameritech genuinely sucks -- there are now times that simple things simply can't be done because there is no one left with the knowledge of how the damn system works.

  8. Sorry by none2222 · · Score: 3, Interesting

    Now is especially the time to defend a US citizen's basic freedoms, of which purchasing in a free market (controlled neither by the government nor by an oppressive marketer) is one.

    I'm sorry--I don't recall any protections against "oppressive marketers" in the Constitution. I do recall a bill of rights, which includes an amendment reading "The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people." Among those rights retained by the people, is the right to start a business, buy and sell as you please, and not be punished by the government for being successful. A century and a half bad laws, and two centuries of supreme court corruption, do not change the meaning of the constitution.

    --
    If you have a problem with my views, REPLY, don't moderate!
  9. Re:Now is not the time by zmooc · · Score: 4, Insightful
    Just a thought... what most western governments are trying nowadays is to control the infrastructure of a country by regulation of natural monopolies. Why? Because they want an "Open" market. But that's not what I would call this; this is totally artificial and in a way unfair to the company that "happens to own the infrastructure". In my opinion this behaviour shows pretty cleary what the ideal situation would be: the government should provide the infrastructure by itself, just like roads etc. The services ran over these infrastructures (phone, internet, traffic, trains, blabla) can then easily be provided in a rather open market with multiple companies.

    This can in a way even be extended to file formats, protocols and even API's but that would cripple development (so there should be legislation that all file formats, protocols and API's have to be open:)).

    Anyway...we don't live in utopia, so don't bother...

    --
    0x or or snor perron?!
  10. No "level playing field" in utilities by Corgha · · Score: 5, Insightful
    Verizon never asked to eliminate its competitors. It merely asked to be allowed to compete on a level playing field.


    This does not to me seem possible.

    Now I am no expert on the history of utilities in the U.S. (maybe someone with a Ph.D. can shed some light on this), but it seems to me that many people seem to forget that Verizon and other utilities have the advantage of huge amounts of existing infrastructure. (In fact, "Verizon" didn't even install a lot of it -- they inherited it from AT&T in the breakup.) Not only that, but this infrastructure was installed with the aid of and through countless special arrangements with local and larger governments (e.g. the U.S. Federal Government's Rural Electrification Act of 1936).

    These governments realized long ago that it was in their best interest to aid utilities in building public infrastucture, whether through loan guarantees, municipal franchises, or other means. Although private firms played a much larger role in the U.S. than they did elsewhere, the utilities' monopolies are nevertheless to some degree government-granted.

    While one might suggest that governments simply give the same aid to competing utilities in running another set of lines/pipes to every consumer, that is not only a very wasteful suggestion, but also one that ignores the fact that times have changed and it's no longer so easy to install the infrastructure. (I certainly don't want the streets torn up any more than they have to be.)

    It is so unreasonable, then, that we ask these utilities to provide other companies access to the infrastructure that we helped them put into place? (...without dragging their feet and making every install from a competitor take gratuitously long)

    Finally, while I agree that some things, like the maintenance of the two copper wires that run from my apartment building to the CO, lend themselves well to natural monopolies, it's not clear that all the other things that Verizon tries to do (Internet access, long distance service) should fall under the same umbrella.

    The free market is a great ideal, and I'm all for it, but there are some circumstances where practical concerns make it unattainable and outside interference is required to prevent abuses. Pretending those practical concerns don't exist does not make them go away.
  11. Re:Outrageously misinformed commentary by Snowfox · · Score: 4, Insightful
    Michael, please refrain from pushing your political views on others through your position as a slashdot editor.
    Editor: One who writes editorials

    Editorial: An article in a publication expressing the opinion of its editors or publishers.

    Slash is an editorial web log. Repeat this to yourself over and over: "Despite all claims to the contrary, Slash is an editorial web log. Slash is slanted toward what its readers want to see and believe. Slash is not a news site."

  12. Exploitation by suwain_2 · · Score: 4, Insightful
    Am I the only one who is REALLY bugged by this? What bugs me isn't that Verizon wants to eliminate competitors, but that they're doing it under the guise of "preventing terrorism."

    Everyone and their cousin seems to be using the tragic events of September 11th as a way to push their laws, change their polices, etc. For example, I've noticed that movie theaters make a big deal about you bringing in bags. Is Osama bin Laden going to come to a tiny movie theater in the middle of nowhere? I doubt it. Is it going to make it harder for people to bring in their own food and put more money in the pockets of the movie theater? Yup.

    I assume I don't need to mention all of the insane laws that have been passed to give the government more power to eavesdrop on inoccent people ^H^H^H^H^H^H^H spot terrorists. Nor do I need to mention that more than 1,000 Muslims are in jail on no real charges at all, but the government seem to think that being Muslim means that they must be connected... I'm not saying that they don't have some possible terrorists, but, umm... I have my doubts that there were 1,000 people involved. I'd rather see a potential terrorist go free than a perfectly innocent person rot away in jail only because he's from the Middle East.

    My intent isn't to bash the government, but merely to comment on how sick and disgusted I am by all the people profitting from the attack.

    --
    ________________________________________________
    suwain_2 :: quality slashdot p
  13. Re:Outrageously misinformed commentary by abe+ferlman · · Score: 5, Insightful

    Michael, please refrain from pushing your political views on others through your position as a slashdot editor.

    Yes, please, if you wish to editorialize, become an edito... oh wait.

    I mean, you can't be so opinonated when you are working for a respectable news service as opposed to a narrow interest-group related news-gathering site... er, wait...

    I mean, you have a priveleged voice as editor, it's not like I can just post a comment and disagr... er, um...

    --
    microsoftword.mp3 - it doesn't care that they're not words...
  14. An ISP perspective.. by defile · · Score: 5, Informative

    We probably took part in this survey, and we concur with most of the results. As a small NYC based ISP, we depend entirely on Verizon to conduct our business. Perhaps I can lend some views from the inside.

    1. When the dialup market was worth being in, Verizon (which was once in part Bell Atlantic, which was once in part Nynex) took years to increase capacity to our office. We just could not add dialups fast enough to meet the demand. There were many periods where our lines were hopelessly busy and there was very little we could do but harass Verizon.

      This is important. We had to work extra hard around Verizon's deficiencies to provide a reasonable quality service. Eventually capacity was increased, but by the time that happened, the dialup market had dried up. Oh well.

    2. We depend on Verizon to network our offices. One business we're involved with is "lighting" buildings with T1s and sharing it with tenants for a reduced price.

      Lately, Verizon's been pretty stable and we haven't had any major catastrophes. Several years ago the story was much different. T1s would constantly go down. Adding redundant lines to different locations was in many cases useless (since the redundant lines went down at the same time!), and often quite expensive.

      Verizon definitely knows that this is a business they should take care of. They're much more responsive to T1 problems, but there's still room for improvement. They are getting better though. Perhaps we're just lucky?

    3. Our adventures in DSL-land have been.. interesting. We resell Verizon ADSL (but provisioned to our network) and the rate it's sold to us leaves us no choice but to price it higher than Verizon's offerings. This isn't that bad since our customers come to expect that they pay a little more for higher quality service from us, but it must be nightmarish for ISPs trying to sell it as a mass-market commodity.

      The most significant value-added feature we offer over Verizon ADSL is that when it goes down, customers simply report it to us and we take care of harassing Verizon to get it fixed. Then we get back to our customers with the progress that's been made.

      Talk about innovation!

      We partnered with NAS to provide SDSL, and they seem to be the only major DSL carrier that can narrowly avoid bankruptcy. Verizon now offers SDSL though (to us, for resale) for significantly less, so NAS's future is still uncertain.

    Verizon's quality of service has improved noticably in the past few years. It's still very substandard, but they're much more attentive to problems now. Maybe we're just having a good year. Keep up the complaints people, they might actually be listening.

    Oh, also! We're lucky enough to be one of the few ISPs to partner with AOL Time Warner. We could be selling cable internet by sometime next year.

    But the FTC has to approve the deal. Our tiny less than 20 employee company was being grilled by FTC officials on a whole range of issues. Apparantly this looks very suspicious to them.

    AOLTW execs explained to us that they see sound economic advantages in partnering with small ISPs and want to do it despite FTC interference. Whether this is genuine or not will remain to be seen.

    But I've already said too much.

    Shameless plug time: If anyone's interested, we're New York Connect.Net, Ltd.

  15. Fight Tauzin-Dingell - It's the RBOCs Dream by ethaz · · Score: 3, Informative
    The RBOCs, all of them, are supporting the Tauzin-Dingell Bill which will allow them into the high-speed, long distance data market without opening up their local markets to competition. This way they can be the only national backbone providers and still use the local monopoly to stop local competition.

    In five years time, the RBOCs will have succeeded in either bankrupting or buying AT&T, WorldComm/UUNet and Sprint. I suspect Level 3, XO and some of the other small players will just be bankrupted. XO is close to that now.

  16. What would you expect from Darth Vader? by primenerd · · Score: 3, Funny

    I've heard him... Vader does the voiceover for the commericals! Verizon is part of the Empire!

    "People everywhere just want to be free" (of Verizon)

    --
    AUGAUUUGCGCACAUAUCUCAGCGAAUGAAAGGGAUUAA
  17. Re:It's not that they're stifling competition by isdnip · · Score: 3, Insightful

    Yes, the Bells want competition. About as much as Fidel Castro wants free elections. I know well; I work with CLECs, write business plans for them, work on the interconnect agreements between CLECs and Bells, etc. The Bells do every trick in the book, and then some, and know that they can get away with flouting the law by using political influence.

    The Bells are the holders of the former AT&T local monopoly. AT&T got the monopoly in 1876 via the patent. When that expired, they bought another patent (Putin's, for the loading coil) that gave them a monopoly on calls of more than ten or so miles. When that expired, they already had a huge advantage over their many, many competitors (CLECs were common as dirt ninety years ago). They then agreed to become a regulated monopoly, and the other local phone companies either accepted a buyout, shut down, or stayed out of Bell territories (whose territorial borders, most of the urban/low-cost-to-serve areas, were then blocked from expansion). So we ended up with multiple local monoplies.

    Those days are over. VZ wants it all, minus the regulation. Whatever works for CLECs, they'll come out against it. Count on it.