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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."
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!"
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.
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".
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
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 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$.
Two black, bespectacled ex-millitary guys named Powel in the bush admin? Are they related?
autopr0n is like, down and stuff.
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.
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.
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.
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.
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.