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FCC's Powell On Monopolies
A reader writes: "According to this Washington Post article, the FCC's Michael Powell wants to do via rulemaking what Congress wouldn't - give a big wet kiss to the Baby Bells. Proposed rules would exempt future investments in broadband from unbundling requirements that make competitive local exchange carriers like Covad viable, instead considering (pretending?) that cable, satellite, DSL, and whatever future broadband the Bells choose to deploy are sufficient competition. Says Powell: "our greatest challenge in promoting broadband is deciding how best to stimulate enormous private sector investment." Consumer advocates are of course not amused."
For a second there I thought they were talking about Colin(sp?) Powell..
Could this destroy all the benefits consumers have received from the deregulation of the telecommunications industry!?!
Oh, nevermind. I guess we're still waiting for that competition in local service to really kick in.
:-| have a day
I've seen what can happen when there is no competition. Like with cable, defore digital satellite, they charged us out the nose for 50 channels. Now I have 3 times the channels for 1/2 the price.
On the other hand, my DSL provider is a baby bell, and it's the only game in town. However, our prices are actually a little lower than some places that have cable and a couple of DSL providers. They know if they jack the prices up, we won't subscribe.
These baby bells have been a monopoly for a long time, and they know how to make a lot of money, without pissing us off too much. In general, though, competition is usually a big plus.
"Da ist ein Technölüst in mein Unterpanten!"
Barfly: Give me some of that O.E., right now dammit!
Bartender: But sir, all we have is Mad Dog 20-20.
Barfly: Ah well, a couple of more dead brain cells won't hurt me. Filler up.
Unless you live in a major city, you probably can choose between no more than two methods of accessing the internet. Here in southwest Reno, there simply is no cable, and no service for getting satelite feed into your home; it's DSL or dial-up. (Or, I suppose, you could pay to have a T1 run into your home like a couple guys I know.)
Monopolies on a regional scale are no worse than monopolies on a global scale. Rockefeller got his start with regional monopolies; even though the price of gas may have been a full 50 cents cheaper 40 miles away, nobody was going to drive 40 miles to fill up their tank.
Besides, isn't this like saying that it's okay for ABC to control every channel on TV, because, hell, there's still movies and radio, right?
"Beware he who would deny you access to information, for in his heart he deems himself your master."
This is going to nuke ISP's that use MegaCentral from qwest, not Covad who gets their own unbundled line elements.
Unbundled lines wont be going away anytime soon.
-- dieman - Scott Dier
Personally I could do without all the in-betweens. We tried to have DSL installed at an office we had once rented. It took 2 months; the coordination between the service provider, the line leasing co., the trunk line owner, and the various other parties was abysmal. Then after installation, you had to "make the rounds" whenever there was a problem ("Oh, that's not us. That's an upstream problem. Contact Company X"). Conversely, installing cable modem service was simple. Within 3 days, it was up, running, and faster than DSL. And when it goes down, there's one place to call who can resolve all the issues. I'm sorry, but middlemen for the sake of middlemen just does not make sense, especially when they provide no value to the service in the end, and can actually muddy up to whole process.
In my area (Austin), SWBell has put out of business just about every DSL carrier in the region. Their service has also been subpar lately, so we may have no option but RoadRunner. Honestly, do the Bells need HELP making monopolies?
I just submitted this story to slashdot. In any case, here is an article on Newsfactor, explaining how this decision will release the phone companies from their obligations to open their networks to rivals. Here is the action by the FCC, and here is a dissent by Commissioner Michael J. Copps, who warns that the commission is committing itself to "specific and potentially drastic changes to our precedent that carry with them enormous impacts in the market".
Of course there will be enormous private sector investment. What better than investment than being issued a lincence to steal the stratigic industry of the 21 century.
When VPNs are outlawed, only outlaws have VPNs.
This is what I've been waiting to see from Bush administration FCC appointees. We've already seen it with his energy policies, and it's only a matter of time before his executive appointments start effecting us in ways we haven't seen in many years.
Despite hanging on to a House and Senate majority throughout the 90's, the Republican party could never sufficiently craft the laws necessary to push their big-money favoritism. The rule of thumb in Congress is always looking at the number of votes necessary to pass the laws that will get you reelected. For many House conservatives, they knew their majorities were too slim to pass laws that would get beyond a Clinton veto, let alone the even-slimmer margins in the Senate.
With the presidency in their back pocket, however, the Republican party placed numerous individuals into prominent Cabinent positions. Their sole goals: protect big-money interests, and get that money to us for use in future elections. It's just that simple. Covad's not going to be contributing a ton of money to Bush's reelection campaign, because they're just barely hanging on. On the other hand, Verizon et al. have hundreds of thousands of employees, who can easily be made party to soft-money contributions.
This is your executive branch. The only way to deal with it is to throw the bums out in 2004.
RW
How is it going to help increase the rollout of broadband if the restrictions on it make it undesireable to build? No one is going to invest money in infrastructure that they're forced to share with the competition at a price determined by someone else. If government wants to handle broadband in this manner, it should just make it a publicly-owned utility instead of pretending that it's a private business.
> Says Powell: "our greatest challenge in promoting broadband is deciding how best to stimulate enormous private sector investment."
I have long held that the US government is a "government of the shareholders, by the shareholders, and for the shareholders".
He seems to agree, except that he thinks that's a good thing.
Sheesh, evil *and* a jerk. -- Jade
asdf af asdf sadf sadf asdf sadf sadf sadf sdaf ewr wqer qrtrlksaf jh ewhr lkkjf hsalkf yufhe khfd dsf
Verizon et al are already armpit-deep in development of broadband infrastructure.
They've already made the decision that they're willing to invest billions in it, because it will make them gobs of money no matter what the regulatory situation.
--Blair
Michael Powell isn't the FCC's as a institution. He is the man George W. Bush appointed.
Don't go blaming the FCC for sucking up to big businesss contributors, and their attempts to stifle competition using political influence. It's not them.
Remember people, elections have consequences.
That's some deep stuff, man.
Kill everyone!
Click here to begin killing: http://homokaasu.org/killeveryone/kill.asp
That these same "consumer advocates" were high amuzed that Microsoft pays no federal income tax, has a larger political slush fund than Enron, and is cross subsidizing their game box from revenues that have been determined by a court of law to have come from a monopoly. Give me a break, telecom is a much freer market than M$.
"our greatest challenge in promoting broadband is deciding how best to stimulate enormous private sector investment."
That's easy, enormous private sector profit.
Quotes:
l
m l
"The best that I can discern is that the public interest standard is a bit like modern art, people see in it what they want to see."
"The oppressor here is regulation."
He called the FCC mandate to evalute corporate actions based on public interests "about as empty a vessel as you can accord a regulatory agency."
http://www.fcc.gov/Speeches/Powell/spmkp806.htm
http://www.motherjones.com/magazine/SO01/fcc.ht
And plenty more examples out there.
Two black, bespectacled ex-millitary guys named Powel in the bush admin? Are they related?
autopr0n is like, down and stuff.
All special days (independence, mothers , fathers, veteran's and so on) are pretty offensive anyway. Now, I dont mind if a family or a private person wants to celebrate such a special day but like the separation of the church and the state, Id like to see all these days denied an official recognition.
This is why employers generally frown upon nepotism in the work place. If only the government and hollywood were the same.
Then the government decides to make more monopolies?
Pick a plan and stick with it already!
I mod down anyone who uses M$ in their posts. I like to live on the edge.
Having worked with small telecommunications companies over many years, I have seen the "benefits" of deregulation
Trunk carriers should not be able to compete in the domestic market. Although the short term effect for the consumer is deemed "wonderful", the long term effect of subsidising sales in the domestic market by the carrier income to squash the little guy who has to compete without the hugh cash cow that the teleco has standing behind it, is quite devestating.
Not only do they never see fair competition in the carrier market (bringing the cost of calls down), but the consumer ends up subsidising their own domestic product and putting the lil guy outta business. And in the long term this reduction in consumer goods pricing is short lived.
Don't matter where you live, the telecos are making some of the largest profits ever in history.
Are showing their true colors. Big business is who they support. They don't give a shit about the people. All you so called conservatives, I hope you're happy cause Bush couldn't give a rats ass about you.
The telcos have spent the past few years throwing up roadblock after roadblock at the CLEC's, thus keeping them minor players in the broadband game.
The FCC, instead of PUNISHING them for breaking the law, now wants to REWARD them for doing so by allowing them a virtual (pun intended) monopoly on non cable broadband services.
The reason for the FCC's doing this is because the FCC wants access to broadband sped up.
Seems to me that what the FCC SHOULD be doing is forcing the bells to abide by the laws that have been in effect for the past five plus years!
Maybe then the Covads and Rhythms of the world might have a snowball's chance in hell of offering reliable, reasonable broadband service.
But then again, I'm probably all wrong here. After all, I'm not a Republican, which makes surely me wrong....just ask one.
All that stupid crap was started by one scientist in 1990-91. He now admits that the proper prediction of warming is what the global warming skeptics had always maintained: 1/2-3/4 degrees C in the next 40-50 years.
It sounds like the regulations were well intentioned but poorly designed - a common problem with regulation! In addition, the phone companies have non-regulated businesses in which they would rather invest.
I personally believe that monopolies (whether RBOC's or water companies or M$FT) should be forced to divest themselves of all other businesses. You are either a monopoly or not. If you are a monopoly, all of your business is subject to public utility regulation. If you are not, you aren't. The current approach is to allow monopolies to also engage in non-monopoly businesses, so they screw their monopoly customers in order to invest in their other businesses, or use their guaranteed monopoly-based cash flows to subsidize unfair competition in other areas (a la Microsoft).
BTW, someone asked about the Powell name. Yes, Michael Powell is the son of Colin Powell.
The only good weather is bad weather.
Whatever Happened to Broadband? Return competition to the marketplace, find out why the Tauzin-Dingell bill will destroy the high-speed internet marketplace instead of expanding it and who's responsible.
Covad only really focused on serving those people who could already get DSL via other means. Those of us who don't live in the city are still without service. I'm not rooting on the monopoly, but if that's what there is to be, at least maybe they can tell the telcos that they have to offer universal service withing five years or so.
Now, to defuse the right/left thread here, according to Open Secrets the telco equipment and services companies gave more money to the left than the right, so on the face of it blaiming Michael Powell for repaying political contributions might be just a bit, far fetched. Then again, the telcos DID give a bunch of money to the right, more than to the left.
The problem is that the FCC deals with so many different facets of the internet it's hard to really tell anything. I mean, Electronic/Communications industries gave more than 343,000,000.00 US dollars since 1990. That includes such players as SBC, Microsoft, Global Crossing, and more.
My head hurts. All I know is that there is too much money from business going to political coffers to let me be comfortable. So, I didn't defuse anything here. Made myself think for once...
Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.
ok, this is what pisses me off. Cable companies are now requiring me to buy cableTV to get cablemodem. If not, my cablemodem costs me 58 bucks a month. DSL in this town (baton rouge) costs $50 a month + tax etc. Either way, i pay close to 60 a month for high speed internet.
I'm an internet junky, and i'm declaring the dream almost dead. Why want to know why? I'm going back to dial-up, and dialing into where i work.
This is one of the key reasons why ISDN died.
And this is one of the key reasons why the CLEC's died. They were constantly harassed by the Telcos, just to protect their profits.
Even today, you can't start an ISP by providing dry-copper lines and DSL modems. In theory, you should be able to. But the Telcos will shut you down REAL quick (as they've done already) and there's nothing you can do unless you have millions for legal fees, and years to wait.
If you want to see broadband increased over phone lines, just spin off the handling of the lines into separate companies, and away from the phone companies.
But it will never happen. It's pretty clear that the Telco's have bought off the Bush Administration, just like Microsoft did.
First, I think it is ludicrous to assume (pretend?) that DSL is the "big dog". There are about 2x as many cable modem subscribers as DSL subscribers. So acting like the RBOCs don't have competition is just dumb.
Secondly, if you factor in equipment costs, DSL is more expensive to offer (by a significant margin) than Cable Modem service. In effect, those $40+ price points for DSL are there because its really expensive. And wholesaling to Covad, etc, doesn't fix that problem. Nothing fixes that problem except time. So I don't find anything wrong with the RBOCs being cautious about deploying broadband - they spend billions on equipment, billions on fixing the installed plant, and, yet, they don't make a lot (any?) money per customer.
Think for a minute. If Cable Modems are cheaper to deploy, more profitable for the operator, and outpace DSL 2 to 1 in deployments (and possibly growth as well), don't you think that there might be a reason for that? Don't you think that is a perfect example of competition (even between oligarchies) at work? Or do you somehow think that the laws of physics and economics don't apply to broadband, because you think its really cool?
I mean, for goodness sakes. If Slashdot had been around in 1972, you'd be complaining that cable service only passed 20 million homes, bitching about how the cable companies were deliberately stalling, and agonizing over the lack of "overbuilders" to spur competition. Conveniently ignoring the billions of dollars of equipment and millions of man hours that went into making that system work and grow.
Get over it. Broadband is deploying quite rapidly, given the enormous financial issues. Competition is working, and the RBOCs are in second place. Resellers didn't change that in the past, and there is no reason to believe that they would change that in the future. Frankly, the problem that everyone needs to worry about is whether the cable companies will end up as the monopoly residential broadband providers, not the telcos. This whole 'resale' issue is minor league stuff.
My login isn't working - this is Gorrpet.
Some here have argued that anything would be better than the appalling lack of support coordination under the present system. I refuse to pay protection money to these gangsters. Thousands of ISP's fix problems nationally and internationally every day, usually in minutes. It's only deliberate Telco obstructionism that prevents similar service levels with DSL, where there are usually only two or three parties involved. PUC's have recognised this and fined Telcos tens of millions of dollars, but the fines are much less than the potential profits from Internet monopolies.
Michael Powell argues that the Telcos need help to get DSL rolled out. The Telco representations to the Congress say the same thing. Yet the Telco reports to their shareholders say that DSL roll out is proceeding ahead of schedule. The real problem is that most people in areas served by DSLAM's can't afford DSL service, and the FCC and Congress aim to make DSL more expensive.
If you've been around a while, you know there was a time when ISP's could provide DSL connectivity for about the same price as dialin over "burglar alarm" circuits. The regulators response was to allow Telcos to stop selling "burglar alarm" circuits. The Telcos use exactly the same circuits, with exactly the same equipment to provide T1 service in many areas. The only difference is that they charge more than ten times as much. Do not expect regulators to protect you unless you pay them millions of dollars or get millions of voters to call Congress.
Much has been written of the Telcos desire for unregulated monopoly DSL, yet their aims are actually much broader. Telco flunkies such as Powell, Tauzin and Dingell want unregulated regional monopolies on all Internet delivered using Telco circuits:.
Your local Mom-and-Pop ISP folds when costs increase ten-fold. You have no independent ISP except possibly two-way satellite and national-brand cable. Not only is broadband more expensive but you can say goodbye to $19.95 dialup too. The U.S. will become an Internet backwater, a distinction the FCC has already managed to gain for us in TV picture quality and 2G/3G cell service.But surely deregulation is a good thing? Congress recognised in 1996 that mere deregulation would, because of the power of the Bells, result in a change from regulated monopolies to unregulated monopolies. What is needed to improve service and reduce prices is competition. One can't directly legislate competition, so Congress offerred a carrot. Those Telcos which opened up to allow competition in their areas would be permitted to diversify. It would be like requiring Microsoft to re-establish competition in the browser market before being allowed to enter the instant messenger market. Now the Telco asses want their carrots without competition. Long-term that's bad for everyone, although short-term it's great for Telco execs who want to cash out.
Don't take my word for it. You know how to Google. Check the facts, then call your congress-borg and tell them "No on HR.1542". Tell your friends what you find too. They're gonna believe you more than me or some politico.
I found this link for emailing Congress over at AISPA. I hope we don't melt their server. (A phone call is more effective.)
This was indeed a victory for the companies that have spent effort, time, and money into putting down cable that allow us to watch television and have broadband internet connections. It is quite sick and shows the current state of our country when a company takes it upon themselves to lay down miles of communications cable and then have the government come in and expropriate that property. This wasn't just a victory for Cable companies, but it was a victory for individual rights of everyone in this country.
Now the 800lb gorillas are grown up and want all restraints removed so that they can get down to some serious pillage.
At least Microsoft's monopoly wasn't subsidised up the wazoo. This Telco situation is a no-brainer by comparison.
Massive enforced transfers from taxpayers to campaign donors are the antithesis of individual rights.
Broadband companies won't go to a city unless another one has, so it ends up with a whole bunch of providers in single cities, while us in the less (or sometimes more) populated areas, don't get anything.
Sure, I could shell out $70/month for starband, but it's slow ping, and the transfer rate isn't as good as isdn on an uplink.
"And we have seen and do testify that the Father sent the Son to be the Savior of the World"
1 John 4:14
Of course, he may be taking orders from someone who can collect payoffs in the perfectly legal and aboveboard ways we call campaign contributions and soft money.
Any public official who states this decision in the public interest is a liar, fool, or both.
Tech Public Policy stuff
Wonder how big companies sway the government?
The Enron Matrix
They called it "the matrix" -- a computer program that brought a scientific dimension to Enron's effort to seduce politicians and sway bureaucrats.
With each proposed change in federal regulations, lobbyists punched details into a computer, allowing Enron economists in Houston to calculate just how much a rule change would cost. If the final figure was too high, executives used it as the cue to stoke their vast influence machine, mobilizing lobbyists and dialing up politicians who had accepted some of Enron's millions in campaign contributions.
It looks like the FCC has got it completely backwards. Instead of regulating a separation between data transport and applications, it has reclassified data transport as a service, and thus removed open access requirements.
This is the exact opposite of the collective wisdom of the networking industry, as I collected here.
Powell today reiterated his opinion that all broadband platforms - cable, wireless, satellite and DSL - should be considered when crafting broadband policy.
"It's important to conceptualize broadband broadly," Powell told reporters following today's meeting.
It is indeed - but rather than prop up a series of monopoly rights, providing an opportunity for Howard Jonas to acheive his stated aim:
"Sure I want to be the biggest telecom company in the world, but it's just a commodity. I want to be able to form opinion. By controlling the pipe, you can eventually get control of the content."
Powell should be considering how to enable maximum flexibility by separating the commodity business of transferring packets from the open applications that define what the packets mean. This is how to maximise the value of the net for everyone, not for a few local monopolists - a fine job for a regulator.
... was not to open the local areas to competition (as the BabyBells and their ilk claim which slows "progress"), rather it was the institutionalizing of the monopoly on local infrastructure by what was in effect a giant telecom company.
Fundamentally, the only really decent way to fix things at this point is this:
Force the spin off of the local physical plant into a seperate company. That's right. split the Bells into a telecomm and a wires company. Give the wires company complete ownership of everything from the local CO to the customer. AND FORBID THEM FROM DOING ANYTHING ELSE BUT RENTING THEIR WIRES FOR SOMEONE ELSE TO USE.
Presto! Everything is solved! The local wires company takes care of all maintenance, has no incentive to prefer one telecom player over another, and will invest in upgraded technologies if someone wants it. Even better, this type of company is easily stimulated by government legislation to put in infrastructure where it might otherwise go (e.g. "We'll give you $100 per line if you wire areas with less than 10 people per sq mile" - that's how we got the country wired for telephone).
The Bells and all the CLECs then get to slug it out on a more level playing field (where the Bell's size does lead an advantage, but no more so than granted anywhere else in business).
While the Bells own the local infrastructure, it's always going to be a battle. It's not one which we have to fight. And frankly, this is such an obvious thing to do that other than hard-core lobbying by the Bells, there is no sane reason NOT to do it.
-Erik
Disclaimer: I work for Covad, a competative DSL CLEC.
There are always four sides to every story: your side, their side, the truth, and what really happened.
I voted with the majority, for the peace and prosperity guy that believed open competition was better for America than allowing monopolies to dictate the rules.
Sounds good.. very good. But eventually there will still be only one company.. except it will masquerade as two... The wire company and it's wacky sidekick The Provider. The only real answer is giving the wires back to the public. Making it a community owned/run system.
Because natural monopolies do arise. They're a fact of capitalism. And when it's something as important as net access (this point could be argued I agree), then it should be socialized.
And everyone wins.. The companies that pioneered in this arena, still have billions of dollars of profits they made. And we could imortalize their names as they should be, as innovaters and builders. Not as they may eventually become, hoarders.
Josh
Warning: Status drunk, ignore post.
Wouldn't you know it, just when commodity code and encyrption technology available to the masses, the fcc decides it's time to change the rules that allowed for this innovation to flourish. I wish they'd just change the rules so that cable companies were required to provide open access to isp's and the like vs. squashing any resemblence of competition this market has seen the last 100 years.
All I can say is I hope ultra wide band gets approved really fast.
--Isn't it ironic, the day of the announcment came on valentines day, what bastards!
Cable companies have taken a 73% marketshare in broadband. Why? Several reasons, one of which is that DSL providers aren't treated as Internet providers. I applaud Powell for trying to rescue us from Comcast and AOL/TW by making them compete with Verizon, etc.
Genius, I've wanted this for years. Unfortunately, each state
has local control of this; and people just aren't organized
enough yet to fight the state regulatory body.
No incentive my ass. They are telling you this line of crap to get their monopoly back.