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CA Utility Commission to Regulate DSL
mgrimes writes "According to this story on Internet.com, the California Public Utilities Commission has ruled that it has the authority to regulate DSL-based Internet services in addition to the FCC. Could be a good step in creating more competition in the broadband market... but then again given the PUC's track record, maybe we're all in for rolling DSL blackouts."
I'm sorry, but as benevolent as the state gov't thinks it is, i fear bad times are ahead, propping up current regional monopolies with subsidies.
"I would say that 99 per cent of what my father has written about his own life is false." - L. Ron Hubbard Jr.
You mean you West Coast dwellers don't have Sprint FastConnect out there already? Oh...lucky you... ;-)
DennyK
Personally I think this is great news. I live in Portland, Oregon, and keep watching my DSL provider (a local serve-to-certain-apartment-complex provider with mad bandwidth) take it up the butt by Verizon whenever they need line upgrades, since Verizon owns the actual copper. I'm all for competition, but Verizon is beating the life out of my DSL provider, and offers crap compared to these guys. Hopefully CA will do a good job with this, and it will catch on.
Normally I'm not a fan of government regulation.
But with current spotty status of DSL, I wonder sometimes if the FCC is really doing a good job here.
Yeah, CA screwed up on electricity, but my best guess is there is so much egg on their faces that the UC is going to go all out to make sure something like this worse.
Either that or it will fail miserably. If I were in CA, I'd have a dialup account for a backup...just in case.
The Internet is generally stupid
Maybe it's the fact that I am not atleast directly affected by this "regulation" but I dont see anything good in regulation (atleast on pricing) in matters like this.
;)
I believe, silly me, that competing market and companies ultimately provide best for the consumers.
Ofcourse there are cases in which this might be good as for people who live in a rural area, which would not be good business for a company. Or in case that some company reaches monopoly. But otherwise, why is it so good? Or does this only affect the fact that Large Bad Telecom Companies now have to lease their cables for Smaller Good Companies.
Flamebait?
Well, as long as the rolling DSL blackouts happen during the rolling electricity blackouts... bring it on!
SIGFEH
I just ruled that I have the authority to regulate interstate banking, in addition to the Fed. As my first act, I decree that 0.01% of all transactions shall be deposited in my various accounts, to cover my "expenses."
Anybody else want to rule that they have some spurious authority that supersedes a federal agency's direct purview?
...I'm not for the government getting too involved in this whole thing, I just want to see SOME type of competition going on.....At least until they start letting ANY company hang fiber on telephone poles, there needs to be sharing of the public "right of way" that is the utility distribution system.
The dark side of the past "franchise" approach that the cities have been taking so far can be seen with CATV! Absolutely NO competition in our area....only thing that's even come close to breaking the "franchise/monopoly" is Sat's like Dish Network, mind you I said "close to breaking".....
The dark side of regulation is obvious....less quality at a higher price......
What really burns me though is established giants suppressing anything/everything that even remotely resembles competition........
On this one, I'll take the Public utility commission over the giants....hands down....
My local cable plant is so outdated and Adelphia refuses to upgrade it quickly. I only get max of 30KB/sec during peak hours. :(
Ant(Dude) @ Quality Foraged Links (AQFL.net) & The Ant Farm (antfarm.ma.cx / antfarm.home.dhs.org).
If California smells money, they either want to regulate it or tax it (sometimes both!). It was less than a year ago that California "decided" that it could tax the satellites in GSO over CA. Until the Supreme Court overturned "Source Taxes", CA used to tax the retirement income of retirees WHO NO LONGER LIVED IN CA! This was because CA was the "Source" of their retirement pension. Nevermind, that they no longer live there and cannot vote in state elections (NO TAXATION WITHOUT REPRESENTATION!).
If CA sticks there paws in your cookie jar, LOOK OUT!
In most states PUCs are about ensuring that the compaines don't over-extend themselves and go broke. They are not there to protect the customers (other than the ability to get service).
Are there any states that have great PUCs from the point of view of the consumer?
I guess they will buy bandwidth for the next 20 years at todays market rate + 20%
like they did power in '00....
-- everyones not everybody and neither is everybody like everyone.
I found the Republican gubernatorial primaries interesting. The main competition was over who hated Davis more and it seems like most people ignored the more important issues.
The future isn't what it used to be.
"the California Public Utilities Commission has ruled that it has the authority to regulate DSL-based Internet services in addition to the FCC."
Doesn't this sound like "I give myself the right to hit you" or "I give my company the right to regulate what car you drive"
Who gave them the authority to rule over this in any way?
Does the child say wether he or his parents get to set his bedtime?
) Human Kind Vs Human Creation
) It'd be interesting to see how many humans would survive to serve us.
Those "ensuing blackouts" that everyone assumes occurred, didn't. At least I never saw one, and I was in California all summer. I'm wondering if this point will dawn on the republicans before they invest millions in anti-Davis advertising that attacks him for something that didn't happen.
Those Blackouts only happed in deregulated zones.
What is more worrying is that Grey davis and members of his cabinet (did I spell that right?) owned large shares of the power companies that made millions off of the energy crisses.
BTW, talk about being scared: replying to CmdrTaco with my meagre karma, now that is scary.
Check his uid thats not the real CmdrTaco dude.
I know I'm going to hell, I'm just trying to get good seats.
Before travelling overseas, I signed up for a MCI Worldcom plan that included, along with long distance service, a Worldcom phone card that had very low rates for the countries I would be visiting (UK was 25 cents per minute, France was about 40 cents per minute).
Because I was travelling, I never saw the bill until I returned home. It was then that I discovered the rates on the card and accompanying material were only good for calls TO or FROM the United States. Since I had made several local calls to relatives and friends during my UK and France stays, I had not been billed at those rates. The rates I got charged were as high as $8 per minute.
What was particularly galling was the fact that they could have bounced the call over the Atlantic twice, and I still would have be charges at the most 50 cents per minute.
I called MCI to complain, but they refused to negotiate with me. They insisted that since I had already used the airtime I was required to pay the full amount.
Angry, I flipped over my phone bill and, as per California law, there was instructions for filing a grievance with the California Public Utilities Commission. I was to make out a check for the amount in question and sent it, with my complaint, to the CPUC. I suppose in this fashion the CPUC was acting a big like an escrow agent, holding the money until they determined the outcome.
But it never came to that. A couple weeks after I mailed my letter to the CPUC I got an envelope from MCI Worldcom. Inside was a letter that had been sent to the CPUC and carbon copied to me. The letter basically asked the CPUC to disregard the matter, as MCI had concluded that "in the interest of customer service" and because "there was the chance that an unwary customer could be misled" they were going to only charge me at the 25 cent per minute rate I originally expected to get.
To this day, I'm not sure if this is a matter of the squeaky wheel getting the grease, or the phone company really and truly afraid of whatever big stick the CPUC may wield. However, I am at this point quite glad for the CPUC. However bumbling or inept a government agency might be, they have a process for getting things done and if you are willing to spent the time learning and following it, it's amazing what you can accomplish.
- JoeShmoe
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-- I wonder which will go down in history as the bigger failure: the War on Drugs or the War on Filesharing
I would say that most of the worries of to regulate or not to regulate DSL service and CABLE(data) service will go away in the next few years.. Why you ask?
Everything is becoming a service.. IP networking, Phone Connectivity. Video(cable tv). What does this mean?
Simply you are going to see companies soon competing for the right to bring bandwith to your door. While the services you choose can be offered by anyone.
Why not have your Telephone Service offered by NuPhone(fictious) with any US based telephone number you like.
Your Cable will come from your choice of any number of Television(formerly cable companies) providers(if not stations themselves).
Why is this? Simple... Soon not only will we have DSL everywhere and CABLE lines.. but also we'll 3g and someday 4g wireless networks which can provide all the bandwith for every service we need.
Now granted local phone companies will definitely fight for thier right to be compensated for local calls, but you have to understand there is nothing stopping a new VoIP company from offering service now or in a few years to customers and providing them with a phone # that can be reached by anyone and it never need touch the their local telco CO. Everything is turning into service to be run over the bandwith providers.. thats the future.. theres no changing it..
Lastly picture this.. you have a 3G phone provided by say... cingular(just an example).. they give you a number(202-456-5000). That number would be your Personal Contact Identafier.. Someone dials that number and they can reach you where ever you are based on what you set.. Is your phone on? calls route to your cellular.. is it off? are you at home? calls route via landline bandwith pipes to your house and runs through your old POTS lines to your house phones.. or are ya not around? calls get routed to a Voice Mail system that u can of course access from your house phones, your mobile phones or your PC via the web.
think about it.. its coming.. sooner than you think...
My friend extremely versed in the Telco-land, tells me a little while back, SWBell had the neat idea of extending the fiber running to the DSLAM for DSL service into the homes directly terminated w/an OC3 connection. Then they could provide cable like visual services--movies, ads, etc... at much higher speeds/resolutions.
:^(
He said recently, they stopped this idea, because as soon as they release it as a telco-service, the FCC says everyone else gets to offer the same thing, and SWBell has to give them (competitors) discounted rates so they can profit.
I'm all for the competition, and a free-market society, but the competition doesn't "own" the lines, so they can't do R&D -- nor do they have half the $$$ that the "Big Dogs" do. What really ends up happening, is the consumers get the shaft because the "Big Dogs" are too greedy to share their precious R&D toys.
Don't really see a solution to this one anytime soon.
A nice story.
I find it interesting that the libertarian ethos pervasive on Slashdot prevents people from realizing how powerful govt CAN be when done right, and how much regulation has contributed to the structure of the Net as it is today.
Lest we forget, it took the FCC prying open AT&T's monopoly (regulating it into being an "open-ended" instead of "closed" network) that fostered the intense competition in data-communications service provision that lowered data-transmission costs to the point where network growth became feasible. Lest we forget, before the FCC stepped in it was illegal to connect non-AT&T devices to the network.
Frankly. I'd like them more proactive in their procompetitive policies. It would be nice to see them do the same thing with the Microsoft API, for instance, so third-party developers aren't hitched to paying Microsoft simply to get the OS to function as promised.
Yea. We already gave it one shot. Covad, Northpoint, etc all jumped in the fray. And what do we have? Lawsuits over alleged abuses of a monopoly. Not quite the market we need.
Why do we need this competative market? Well, some theorize the Bells aren't really all that interested in DSL. If it weren't for the earlier flurry of competition, its likely nobody would have seen DSL rollouts at all. Now all we have left is a mess.
So if not the government, who else can possibly continue to place the pressure of competition on the Bells? Yep. Cable. And the Deathstar Corporation itself: AT&T.
When I moved to the Silicon Valley area, I was thrilled to have a choice of broadband service. I figured I would go with xDSL and select a nice third person provider. I put my order in. I even rescheduled when they failed to show. Three times. At that point, three months had passed filled with missed appointments, confusion, and even a DSL switch that sat there with a link light but no data for the last month. Then my wife saved our household with a call to AT&T cable. Three days later, packets were routing in and out of my apartment at a fair clip.
Was AT&T eager to rush data to my house and feed my broadband lust? Probably not. They sold me on a premium digital cable package. And soon began inquiring to our changing to their new digital phone service and long distance package (which was a part of the same digital cable network).
That's right. AT&T is gunning for PacBell's market. If we're lucky, they'll go after the other Bells too.
Wait. Did I just say 'lucky'? AT&T and cable companies. Versus the Bells. I'm not sure which to lable the pan and which to call 'fire'.
As slim a chance as it is... the only one consumers might have is in the hands of government.
California Public Utilities Commission has ruled that it has the authority to regulate DSL-based Internet services
OK... based on that logic.
I hereby rule that I have authority to regulate Microsoft's monopolistic behavior..
Prepare to bend over BillG!
Loretta Lynch, honcho of the California Public Utilities Commission, worked night and day in defense of the electrical and natural gas consumers of California while the forces of "laissez-faire" were screwing everyone. During the crisis, I read everything I could find anywhere about the pending legislation, the regulatory actions, spot market prices, plans for plants, environmental regulations, homebrew power regulations/incentives/products/services and even the lawsuit brought by the CPUC itself against the Federal Energy Regulatory Commission for being lax on crooked corporations--most notably Enron. Need I say more? Yep.
I live in the Republican-dominated state of South Dakota. What do these sincerely conservative people want? A regulated monopoly. What do we get? Power for about a penny or two per kilowatt-hour wholesale year round with nary a failure even with our horrible weather. When the lines go down, laissez-faire does not provide us with understaffed, undertrained, low morale linemen. The lights go on again pronto, and people do not get killed due to "cost consciousness" in the training budget. Through mandatory stable pricing, adequate capitalization, strict accountability, open records, and the mandatory glut, abundance, reasonable and stable profits, and cheap reliable power is the law. One day last summer when it was nearly 100 degrees outside, I saw no exhaust coming out of the fuel-oil-fired peaking plant as I drove by. We had juice to spare.
Ms. Lynch didn't put California into the opposite condition of South Dakota. Governor George and the "bold" legislative assembly initiative (the infamous AB 1890) illegalized long term price stability from any electric power seller to any electric power buyer in California, effectively making the Federal regulators the only regulators with significant, enforceable authority. Loretta Lynch raised a little hell a little frequently about that. Given those reckless laws on the books, Ms. Lynch and the rest of the CPUC were thrown the unpleasant duty to make rulings within a system that illegalized stability. The CPUC did its best within the insane laws there to make the system work like something that didn't lay out a red carpet for Enron to screw California. In the infamous May day of 1999, it was a CPUC-mandated scientific study that sounded the alarm about bad market conditions to come. When the crisis intensified, the State of California worked so hard for Joe Blow customer that they set up a trading floor to try to "speculate back" against Enron and its ilk with the biggest (little) army that could be afforded on short notice to man the phones and the energy-trading workstations. The fiery redhead, Ms. Lynch, kept up morale for the underpaid (by energy company litigants' standards), overworked and outgunned CPUC lawyers to take on Enron, Uncle Sam's lazier regulatory side, and anybody else who would bend the law against the ordinary customer.
Bear in mind that California is drenched in sunlight, whipped by the wind, sitting on oil and natural gas galore, and beset with few extremes in temperature (except in the desert, which is sunnier, windier, less populated, and and more predictable). For ten years "laissez-faire" indicated that no new plants should be built. Ok. Environmental and NIMBY ("Not In My Back Yard") dynamics were in play, but the CPUC is not to be blamed for bourgeois disgust with the actual production of what gets consumed. The CPUC is a consumer-protecting watchdog organization... almost as good as the esoteric little PUC in South Dakota. ;-) Only weeks before the big disaster in power prices in California, our since-deceased South Dakota PUC commissioner wrote a polite little note to the feds, saying (in effect), "Nope. We know you want us to deregulate like California, but we're just fine the way we are." The CPUC did not have that option. That commission did the very best it could in a horrible situation, and it did some good.
Look at the economic realities of the situation. The Feds took many billions of dollars for 3rd Gen licenses just a few years ago. Until five years ago, virtually everything these Telcos did from the rates they charged to the scheduling of service calls to the dollar amount of profit was controlled by the government. Some have existed for close to 100 years in this quasi-state owned condition. Now look at the bond ratings of these companies today with all that debt hanging over them. A very large chunk of that debt is the money given to the Feds. Remember, these are Blue Chip stocks owned by millions of grandparents and teachers and firemen. It is damned easy to make a political case for extortion of these companies by the US Government. Not a legal case, a Political case which is far far worse for politicians. Remember Condit who to this day has not been accused of anything legally.
There is no ethical way out of extortion for either party once the money has been handed over. Now add into the mix the Enron scandal. The only way these Telcoms survice now is by massive creative accounting. The only way they will survive the next few years without going bankrupt is if they can somehow generate a massive profit in a hurry. Avoiding bankruptcy is also the only way the politicians can avoid a massive political scandal far worse than Enron. They must give these companies some way to make a lot of money until the debt is paid off.
Long distance service is rapidly becoming of near zero value. The Net has built and uses a LOT of bandwidth. Digital Subscriber Line is dedicated to the proposition that it is more profitable to provide a flat rate, unmetered, always on connection for communications than to attempt to measure the usage of the communications. This is rapidly become the clear economic basis of the communications industry in the US for at least the near future.
The FCC has a clear and urgent political need to make damn sure the Telco's survive. The Telco's also have a desperate need to survive, they are surviving by accounting gimicks right now. The economic and political powers will conspire to give the telco's those garanteed profits. One of the best hopes for doing that quietly is to give them a monopoly on the only profitable service: DSL.
I Belive this to be a fair reading of the political tea leaves. The kicker is the California PUC. When deregulation came in, they lost the political power to regulate the profits of Telcos. Meanwhile, they also had a disasterous deregulation of the power industry foisted on them by the CA Legislature. The PUC is gambling that everybody is right about DSL. If they are wrong, the PUC is history. Of course, if they don't regain some power pretty quick, they are also history. By reclaiming political power through economic control of the utilities, they can set things up in the largest market just like they were before deregulation. Now note well, if one state can claim that power, EVERY state can do so. This fits well with the Federal need to give a monopoly while not giving back the money or repealing deregulation. It also fits well with the corporate history and attitude of the Telco's.
My cold bottom line analysis:
The CA PUC will be able to claim the political power to regulate all aspects of the communications industry in the state. Their policies will favor the creation of one or two companies to hold monopolies. This will have the effect of returning the entire political and economic situation in telcoms back to the previous quasi-state owned status quo. The only significant change is that rates will be set by the bandwidth and not by minute. Every political and economic entity involved gets what it wants. Except of course, the consumer. But the consumer also gets a nice brite shiny toy to play with, high speed connections at about $100/month. Just about what they were paying for phone service each month on the previous pay per minute plan.
Just so people remember correctly, it wasn't either deregulation or regulation that got California into so much trouble with the rolling blackouts, etc. It was the combination of half-assed deregulation AND half-assed regulation combined that caused their self-imposed troubles. The state decided to deregulate most aspects of the power industry, but didn't feel like taking the consequences, so it capped what power companies could charge for the power.
Forgive me for saying so, but people in California seem to have a bad habit of wanting everything, but not wanting to pay for it in some way or another. Like requiring 15 different grades of gasoline, but then complaining about the high prices at the pump. Or griping about the poor public education facilities in the state, but then not putting up the money to fix them up (actually, squandering the funds so that a bond issue had to be floated).
DSL is not a life necessity. There are people who would benefit much more if those legislators and administrators spent their time looking into solving CA's power, housing, labor, and immigration problems. I don't feel particularly bad for either the providers of DSL service or the consumers right now. One is scamming the other, and the other is allowing themselves to be scammed. So I don't particularly think that these regulation efforts are best spent in this area. But it's their state -- maybe they can do DSL differently? Somehow, I have a bad feeling!
Apologies for the rant. It just seems that people, Californians in particular, want to fix the wrong problems. Like when the Berkeley city council votes to condemn border disputes between Myanmar and Burma, but in the meantime, the streets of their own city go to shit, so homeless people actually flock there for the fringe benefits. Or when the state has a referendum on whether to outlaw the consumption of horsemeat. I mean really, how many people does this affect? And all the while, countless others are living in poverty, right next to dot com billionaires. Oops, there I go again. Sorry. I'll stop now.
The parant post has a point. Have you seen an American Landline phone bill? Over half of the basic service charges are not related to providing service by the phone company. It's add-on tarrifs.
That is why cell phones are replacing low use landlines in many areas. The service cost is more, but has less taxes making it close to the same final price as a landline with the added fees govt. fees. High volume use however does start to increase the cost for the airtime but not a landline. (translation - use landline for high local use or dial up internet or DSL, otherwise ditch the landline) This is offset by the included free long distance on a cell phone. If you use long distance a lot, a cell phone may be cheaper. As a free bonus, telemarketers are not supposed to call cell phones, and caller ID & voicemail are usualy not an extra 6 bucks a month each on a cell phone. Those features alone is worth quite a bit.
A landline with the same feature set as a typical cell generaly costs at least as much as a cell. It's hard to find a cell that is stripped to the equivelant of simple no feature POTS line.
The truth shall set you free!
If you realized what these fools have done to the electricity industry in this state then the last thing you'd want is for them to start regulating DSL. Expect politically modivated contributions from AT&T, Verizon et.al., industry insiders negotiating the contracts for us, and hair brained deregulation schemes which cripple the industry to the point where it allows us to be gouged for billions of dollars.
but then again given the PUC's track record, maybe we're all in for rolling DSL blackouts.
In-spite of what the television tells you, the purpose of the rolling blackouts was extortion. There was PLENTY of available electricity 'on-the-grid', but the utilities felt it was not in there (immediate & present) best interest ($$$) to deliver it to Californian citizens. Bush gave 'permission' to his Energy Cartel friends to 'crush' the Californian Government's regulations.
Wake up and smell the Plutocracy friend, the Energy Utilities got away with shutting off your power in order to sway public opinion... of course, youve probably heard of Enron and their relationship to the Bush's energy commission. The problem is that the 'market' will always decide to screw you, thats why you have a GOVERNMENT (community group) who REGULATES (codifies social agreements). Jesus.
Corporate monopolies are gov't monopolies,corporations only happen because they are sanctioned by gov'ts. You'll never vote out the people who created a gov't monopoly, gov't is a self-replicating virus. I'd choose the corporate monopoly over gov't, since, for the most part, the guns backing up the corporations are limited.
Damnit, Jim, I'm an anarchist, not a F@#$!^& doctor!
Let's face facts: someone has to build a new fiber-to-the-home network. That's going to mean starting a real company raising serious capital (the old fashioned dividend-paying stock model is appropriate here), but these half-assed measures (like DSL) just don't work well.
Put one of these in the homes. They cost well under $200 in quantity. Swap in a new box (say, Gigabit Ethernet) when it's cost-effective, but for now, 100Mbps will do. You're basically building one big honking switched Ethernet.
Lots of grunt work, but it's very doable. Call it the Internet Plumbing Company. And if someone implements HDTV over IP Multicast later on and whacks the cable TV monopolies, that's good too.
Since when does gov't intervention==more competition? The free market would do more for us. Only problem is there hasn't been a real free market in the US since the late 19th century.
Damnit, Jim, I'm an anarchist, not a F@#$!^& doctor!
typical... DSL is already heavily regulated, and that's the reason there's insufficient competition. But only beaureaucrats would believe that the cure for regulation is more regulation.
Market competition doesn't mean "competing to see who can give the biggest campaign contribution."
It's not just their ineptness dealing with the power problem last summer.
A few years ago, our sewer company raised rates from $14/month to $42/month - a threefold increase. As you might imagine, the auditorium was packetd with people who showed up at the puc hearing to complain about the rate increase. Instead of a 300% increase the PUC knocked a whole $5 off the increase and set the new rate at $37/month.
Just over a year ago, an oceanographer at the Monterey Bay Research Institute discovered high levels of e-coli in the tap water at Moss Landing. Another little town near here, Chualar, has water that is so polluted that the county trucks in drinking water. The PUC disavowed any responsibility in either case.
I don't mind government regulation if it results in tangible benefits to the populace but these cases have made it clear to me that the PUC is nothing more than a welfare program for clerks. Given their performance dealing with our water, power and sewer systems, I don't see any reason to expect they'll be effective regulating DSL.
----
Need a sig? Have this one..
Intel Bullies Yogis
CA's power troubles mostly were in over-regulation. Last fall I had microecon in school and we learned what happened: price caps. CA didnt want electrical companies charging too much for electricity. Ok, so the electric companies only provided enough power such that they would break even, but that failed to fulfill the power demand. Result: brownouts.
Turns out similar problems occured in living establishments (apts, homes, etc). CA put a cap on how much a place to live costs (was based on something like cost per sq ft.). This wound up discouraging builders from building new apartments and housing developments, or made them go with cheap ass establshments just so they could break even or barely profit. Result: more people living out of vans; which is illegal in CA.
This was all in a WSJ article titled "CA: The Free Lunch State" If i had a link i'd show it.
Basically, the lesson in the econ class was that price caps limit supply.
Some people say that deregulating the power troubles wouldn't work. But where I live, PA, we have electric competition, keeping supply/demand in balance. One local electric exec wrote a WSJ article (also from the econ class) about how deregulation helped the mid-Atlantic states prevent most brownouts and keep end consumer costs down.
The One Rule Of Chess You'll Ever Need: Don't play someone who carries a kit in their bookbag.
Having the various states "roll their own rules" for DSL is the dumbest possible solution to "not enough available broadband."
The effects will be:
- Higher prices. Companies will be forced to comply with different regs in California than the rest of the world, this means that Californians will pay the extra costs on their bill.
- Less service available. What businessman in his right mind would enter a market that is about to be heavily regulated by a group of west-coast liberals?
So if you want to keep DSL out of your neighborhood for another five years, by all means, make up your own rules.
Who did what now?
How do you create a competative marketplace with a service that already exists as monopoly (partly because of the nature of the resources involved)?
I'll give it a shot. It's an interesting question and not one I've thought about before, but one answer springs to mind, so I'll post it here where people can poke holes in it.
It's pretty clear that the "last mile" of telephone (and, to some degree, Internet) is a natural monopoly as long as the technology is based on a single kind of wire being run to each home (we now have three kinds of wires run to the average home, and wireless raises interesting possibilities as well, but I'll ignore that).
If we have to have a local monopoly, it seems to me that from a consumer standpoint, we'd rather have many, many tiny monopolies rather than a few large ones. Theoretically, large organizations can be more efficient because they can amortize costs over a larger installed base, but in practice large organizations tend to be worse at ultimately making the customer happy, regardless of the apparent benefits of scale. Many tiny local monopolies also makes it more reasonable for consumers to "vote with their feet", if necessary.
So, I would propose that telephone and cable infrastructure services be handled by the same entitities that currently handle other natural local monopolies, namely water and sewer. Now, most people are frequently pissed off at their cities; they don't, on average, tend to be run by the most capable of people, particularly small cities. However, the great thing about being pissed off at your city is that you, personally, can actually do something about it. It's a sufficiently small governmental unit, that your letters and phone calls carry some weight, and if you really need to you can always run for city council yourself.
In practice, few cities would actually want to employ the technical staff to maintain and operate phone lines and switches. In practice, they'd contract this out, the same way they do with garbage services (Tony Soprano is now paying close attention). The current phone companies would be very well positioned, initially, to provide those services, but I would expect a multitude of small companies to spring up overnight. The barriers to entry would be very low and competition would be stiff.
One obvious difficulty would be how to make the transition. I suppose the local communities would probably have to purchase the existing infrastructure from the telco that owns it, but the price shouldn't be that high, because the telco has already recovered their (high) costs of putting it in. The main reason it would have to be purchased is that many (most?) telcos are public companies, and the shareholders need to be compensated.
One of the downsides is the obvious risk of nepotism and cronyism in the process of contracting with operations companies, but keeping all of the information public should mitigate that risk. I mean, I really don't care if the mayor's cousin owns the telephone service company, as long as I get good service at rates similar to what everyone in other cities gets, right? Another is the possibility that service will suck. Cities are always interested in attracting and retaining people, however, and if they do a bad job, people will leave. It's not reasonable for me to move from Utah to Pennsylvania to get a better phone provider (not saying I would, either), but it would be reasonable for me to move to another town twenty miles away.
Finally, let me point out that this idea is not purely theoretical, or even mine. There's a community in Utah (Eagle Mountain) that has done this. The city provides phone, power, water, sewer, garbage, cable TV and even Internet service. All of the infrastructure is owned by the city and some of the operations are done in-house and some are contracted out. The city actually provides four different options for high-speed Internet (DSL, fixed wireless [like Sprint Broadband], 802.11b wireless [w/high gain antennas scattered everywhere] and cable), all available everywhere in the city limits.
All is not peaches and cream in Eagle Mountain, however. There were some rough periods at first, during which outages in power, phone, TV and Internet services were common, and many of the citizens got rather upset. This annoyance on the part of the citizens led to large, angry crowds at city council meetings, but eventually things got fixed. My boss lives there and he seriously considered moving for a while, but now he loves the place. Among other things, he really likes the fact that his wireless-enabled laptop has connectivity anywhere in his house, walking down the street, at church, at the park, etc.
Also interesting to note is that my boss is the main reason there are two wireless Internet options. The city had already put in the fixed wireless, but he went to the meetings and talked up 802.11b tech. That sparked interest and a local company was found that wanted to contract to operate it. The costs of installing the infrastructure were analyzed and reasonable rates set (it's around $40/month IIRC) and the system was installed. The ideas and suggestions of first one, and then a small group, of citizens ultimately lead to a great service for everyone.
I don't know if the same model would work everywhere. Eagle Mountain has the advantage that it is both a new, planned community and a fairly affluent one. But the idea is worth some serious thought.
Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
So whenever I hear that it's the half-assed combination of regulation and deregulation that caused California's consumers' problems, I think to myself that they would have been better off never deregulating at all. Los Angeles has a municipal power company and never once had a brown-out.
"The urge to fly from modern systems, instead of moving through them to even greater, fairer things is, I think, an indi
IMHO, regulating DSL is the worst thing that could happen to competition in the CA DSL market, and the best thing that could happen to the winner of the lottery for becoming that single DSL provider.
Key to financial independence: Spend less than you earn. Save and invest the difference. Do it for a long time.
Having seen first hand the truly screwed up state of broadband in CA (I've lived here for 17 years now), it's very obvious that the companies involved are actually backpedaling, rather than improving their service or expanding their service areas. For example, the CO near my house was scheduled to be upgraded by Pac Bell last May (so that I could get DSL), then it was supposed to be this May. Now it's not scheduled at all. What is my alternative? I called what is now AT&T cable, but their service is also not available in my area. Next I tried all of the little ISPs offering DSL. Turns out that I'm *JUST* close enough to the phone company's CO to get IDSL. Expensive and slow, but hugely better than the awful dialup connections from my house. Sign me up! 4 months later, I finally have working DSL through Verio and Northpoint Communications. Remember them?
This continues happily for about a year and a half. Then Northpoint suddenly realizes they haven't made money, will never make money, and shouldn't exist. My DSL is turned off with NO notice. Now, I knew it was coming because I'd heard about it in various places for about a week. 4 days after it's turned off, Verio calls to let me know that it's going to be turned off. Very competent of them.
Now I have to scramble to find some other solution to my lack of connectivity. Sprint! They're offering a wireless microwave based connection in the Bay Area. Well, to make this slightly shorter, it wasn't exactly implemented well and wouldn't work. Now what? Time to start calling ISPs again and get service through Speakeasy and Covad. I'd been avoiding Covad for 2 years because of how awful I'd heard they were, but now I have no choice.
Fast forward to 2 months ago. I've been opening trouble tickets with my ISP from the day the DSL was installed by Covad because of intermittent loss of connectivity. (this time installation only took 2 months) They can't figure it out. But they're still happily billing me. The service is worthless and I have a 1 year contract that isn't up until May. This trouble ticket has been open since October. It will never get fixed. At this point, I'm resigned to paying for this POS DSL until I can cancel in May and I start looking for something that might actually work.
Enter Gatespeed broadband. It's wireless. It's not microwave line of sight. It's not satellite. They claim they can install and have it running in a single digit number of days. It's 256k symmetrical, which compared to the far less than 144k I was actually getting out of the DSL that only sometimes worked, is fantastic. It costs about the same as IDSL (expensive). Sign me up! 4 days later it was up. There are occasional glitches, but unlike any of the DSL providers I've dealt with these guys actually tell me what's going on. They own up to the problems, claim them as their own and actually fix them!
So, why should CA have regulation? Because there are zero standards for service, billing, accountability, or anything else pertaining to DSL. Because getting DSL through an ISP means you're dealing with 3 separate companies, they don't have to be accountable. They can point their fingers at each other and say it's not their fault. In the meantime, your service doesn't work but you have to pay for it anyway. They can then turn it off with no notice. This situation is the poster child for government regulation.
"Suppose you were an idiot..... And suppose you were a member of Congress... But I repeate myself."
But I was thinking more of the summer, after Davis put in place his fixes (the exhortation to conserve, combined with discounts/rebates for conservation). Even though the chock-full-o-blackouts summer didn't materialize
The only thing that saved Davis was the weather. Pure and simple. The weather allowed enough rain for more hydro imports from Oregon and Washington states, and cooler temperatures with lower humidity on average across Northern and Southern California lowered demand.
Yes, the calls to conserve helped and were a good thing, but the lowered demand due to the weather was mulitple times more effective than ANY calls for conservation.
It's nice to see the PUC take some action when it comes to highspeed services, but the FCC is pushing hard to have control over all Telco based broadband services. The CA ruling falls on the tails of the MN PUC getting involved with the Qwest .net customer transfer to MSN. MN brokered a settlement that allowed people to get out of MSN. Which Qwest and MSN had made very hard to do.
The problem is, MN didn't have standing to regulate the DSL deal between Qwest and MSN. They had limited standing involving consumer issues mostly regaurding how the new service was advertized. These issues were taken by the Attorny Generals office. Which in MN is extremely agressive.
Insiders in the case and most of the board memebers knew that they no longer had the ability to regulate DSL in the way a non-enhanced service would be. And Qwest/MSN was very quick to point out that the PUC had no authority. What the PUC lacked in standing, they made up for in the ability of being a major pain in the ass. It was cheaper to settle for Qwest and MSN.
Qwest/MSN would have won most likely in federal court to make it an FCC matter. (The FCC takes months/years to hear a case) But, in the unlikely event that they lost, MSN could be considered a "Retail communications seller". Extremly bad for MSN because they aren't a DLEC or CLEC. The fine would be in the millions.
At any rate, CPUC can say they have the right to do this or that. But the LEC decides it wants to get them out of the picture for enhanced services they will win.
So it didn't have anything to do with huge energy conglomerates (like Enron, wait, no not actually *like* Enron, it was ACTUALLY Enron) fixing spot-prices of natural gas on the commodities market so they could take advantage of an artificially generated spike to rake in huge profits, while driving the (public) power distribution side of the business into bankruptcy?
I guess we'll see how the ongoing lawsuits pan out, but from what I've read in the press, the whole rolling-blackout deal had nothing at all to do with the state of semi-deregulation, and everything to do with plain old securities fraud.
These are my friends, See how they glisten. See this one shine, how he smiles in the light.
Also I too heard the so-cal didn't get hit that bad. Funny considering we provide more power and we also provide the majority of the water for the state. I'm voting to split CA. So-cal is a giant leech.
I work in the power industry and I live in SoCal, happily leeching away. In case you are interested the main reason Northern Cal has a demand vs generation+powerimports problem is that all you voters up there keep shooting down any opportunities to build power plants and transmission towers in Northern Cal. There isn't enough generation where the demand is and it's been almost impossible to get power lines or plants built. The main north-south lines are ALWAYS near full load. We need to build more generating plants where the loads are and build more lines for increased power transfer flexibility. Probably very unlikely given the perennial NIMBY mindset from my fellow Californians.
Well, 'Anonymous Coward', I didn't say it was Enron. I only said that it was a "certain energy company".
On the question of whether or not Enron is a piece of the puzzle concerning the false energy crisis of California, there are a number of articles tracing influences in that market, of which this article, What Cheney's Hiding, is only one.
Here are a couple others:
Not that I'd put any kind of idiocy beyond Berkeley city council, but did they really do this? As any fool know, Myanmar and Burma are the same place. And their government is certainly worthy of condemnation.
--
E_NOSIG
What the retail price caps did was:
Prevent the consumer from "feeling" the pain of his/her choices, so no incentive to lower usage.
Discouraged investment in new sources of power.
the whole rolling-blackout deal had nothing at all to do with the state of semi-deregulation, and everything to do with plain old securities fraud.
That may indeed have played a part, but the single biggest cause was the infamous "Blue Book" on wholesale (versus retail) deregulation plans that the CPUC staff published way back in the early 1990's. That book terrified the big utilities (and their bankers) away from investing the money to build new plants and transmission towers for ten years BEFORE the crises really hit. NIMBY played (and still plays) a big role also. The rolling blackouts situation was a decade in the making. This is well before any Enron or the other fifteen or so companies even had a chance to try and pull any shenanigans.
Prevent the consumer from "feeling" the pain of his/her choices, so no incentive to lower usage.
I dont fully know what it was like in CA (but I did get a $12/day surcharge at a SF hotel last June), but to my understanding, the limit was on cost per watt or something like that, not cost/month. Cost/watt would give conservation incentives by showing the person how much they were using.
Discouraged investment in new sources of power.
Precisely. The same concept happened in the living caps thingy. Energy companies had to reallocate the money they normally would've invested in new sources into funding production because their revenue from end consumers was limited.
The One Rule Of Chess You'll Ever Need: Don't play someone who carries a kit in their bookbag.
California wasn't the only state that had rolling blackouts, by the way. There were also many portions of CA that never lost power at all. There's no "pro government regulation of utilities attitude in the air" that I can see at all. People realized that deregulation was a failure. Simple as that.
Also, so many people have been having issues with Pacific Bell screwing up DSL orders that they just got fed up with it and took it to the state government. Now the telco DSL providers might actually have to provide the services that people have been promised or are already paying for. I really don't see how that's a bad thing. "Scared Californians?" No. Not at all. "We're not going to put up with this crap anymore" is the attitude in the air.
Maybe this will stop companies (*cough* NorthPoint, Verio) from pulling out of xDSL service with only a six-day warning. Your local Bell seems to have a strangehold on installation, repair and service... So what does it take for a community, city, etc. to run copper to a bunch of houses? Wouldn't it be simpler to bypass the Bells and run your own pairs? For example, what would i need to run a line to a friend a mile away in an urban/suburban setting?
The biggest trick the devil pulled was letting lawyers become politicians so they can write the laws.
It is important, in these debates, that we realize which of our beliefs is just that (a religious belief or statement of faith), and which are facts. Otherwise we end up with religious disputes rather than reasoned debate.
-E
Send mail here if you want to reach me.
At least you're honest enough to state that this is a matter of faith (religion) on your part, rather than a factual statement. Many who make this argument are not so honest.
So: Why can't I get DSL service at my apartment, if competition is so great? If the PUC can get me DSL service, and the free market can't -- why in the world do I care about your religion? All I want is DSL service, and if the free market won't provide it, hell yeah, I'll take PUC regulation instead!
Remember these words: We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America. Note the "promote the general welfare" bit in there. In general, a free market does that better than any other method... but when it doesn't, the founders of this country had no problem with government stepping in, whether it was chartering turnpike and canal companies, or creating a U.S. Bank in order to establish a common currency.
-E
Send mail here if you want to reach me.
Note that this reasoning would NOT, however, cover the ISP (who is more the "long distance provider" of this scenario), but would certainly cover the provisioning of DSL service between the end user and the ISP's DSLAM at the phone company switching station. At least here in Arizona, that part (the end-user provisioning) is already regulated by the Corporations Commission as a seperate service -- the ISP is broken out as a seperate charge from the line provisioning charge.
-E
Send mail here if you want to reach me.
They're talking deregulation here in Arizona, but the California fiasco made everybody pause to reconsider. At the moment we have the lowest electrical rates in the Southwest -- and getting rid of that for religious reasons ("competition is always better") doesn't strike everybody as a good deal, in the aftermath of what happened in California.
-E
Send mail here if you want to reach me.
What is this rumor going around that deregulation was even involved in the process? There was no deregulation. It is a fairy tale. The very use of the word is an implementation of Orwellian NewSpeak. It ranks right up there with called NAFTA a free trade agreement. Bogus.
Taking the shackles off of the left ankle of a prisoner, but keeping the shackles on the right ankle and both wrists does not qualify as "freedom". But somehow in my Home State of Fruits and Nuts, removing one regulation out of the millions regulating the power industry is called "deregulation."
A Government Is a Body of People, Usually Notably Ungoverned
No, what actually happened was that the power companies asked for the rate cap, in order to preserve their profits. After all, through the magic of competition, rates were sure to go down... Like most legislation today, it was basically drafted by the industry the bill was supposed to regulate.
In addition, there was the matter of a 10% rate cut, paid for by a bond measure, in order to make the deal more palatable for consumers ("Look! A rate cut! Pay no attention to the bond debt..."). We also included kickbacks to PG&E for coverage of their "stranded costs" (Translation: the expenses from investment in nuke plants which nobody wanted to buy; the companies allegedly needed cash to stay competitive; something the Libertarian pro-nuke Cato crowd often glosses over when discussing this issue...)
"I dont fully know what it was like in CA (but I did get a $12/day surcharge at a SF hotel last June), but to my understanding, the limit was on cost per watt or something like that, not cost/month. Cost/watt would give conservation incentives by showing the person how much they were using"
You are a little confused about the price cap situation. There was always a retail price cap from the inception of AB1890. The retail cap applied to the end user consumers. The retail cap came about for the "something for nothing" crowd. It was a way of getting support for the whole package from consumer advocates (no matter they say they said back then). The wholesale cap(s) came about later as desperate damage control when it became painfully apparent that AB1890, the blue book and the CPUC had disconnected the wholesale and the retail markets from each other. That old supply and demand thing is much more robust than they thought. With the retail cap, there was no incentive for consumers to lower their use so demand stayed higher than it probably would have and this prolonged the shortage. The wholesale cap had a similar effect by discouraging generation companies from buying expensive generation plant fuel and then not being able to recoup that cost through wholesale prices. Another long term effect of both caps, but especially the retail cap was to discaurage spending on building new projects.
It was something like 12cent a kW/hr. If it was set at some arbitrary amount per month regardless of use, the more you used the less you paid per unit. E.g., I'm going to set the limit of what you pay for gasoline at $100 per month, regardless of how many miles you drive. Instead of say $1.85 per gallon. So you drive more, you pay more, just not an overly outrageous amount per gallon.
Although the retail cap was set at about 12cents a kW/hr in the retail market, the wholesale market (at least initially) had no such limits. This led the absurd situation where SCE and PG&E had to pay wholesale generators 150, 200, 400, 600, (at one point briefly 5500!!) cents a kW/hr, while still being able to charge customers only 12 cents a kW/hr!!
Continuing with the gasoline example, you own a gas station and the other buyers of bulk gasoline at the refinery start bidding up the price until it reaches $250.00 per gallon. But the PUC says, nope sorry you have to sell that gas no matter what for no more than $2.00 per gallon. This is essentially what happened. And is why PG&E went BK and SCE came within an eyelash of doing so.
Enova Corp. (SDG&E) was not effected because they had paid off their long term "stranded costs" and thus didn't fall under the same provisions our wonderful idiots in the CPUC DRA (Division of Ratepayer Advocates - a bunch of leftist lawyers) forced on PG&E and SCE.
The other aspect of the price caps that always seems to be overlooked by the media is that customers of PG&E and SoCal Edison were for years paying artificially inflated prices so the power companies could re-coup the alleged losses from selling off most of their power generating facilities. This windfall allowed SoCal Edison to do ridiculous things like paying $millions to change the name of Anaheim Stadium to Edison International Monument to Idiotic Power Company Executives and to transfer literally $billions to Edison International, their parent company. The real joke of the whole thing is that they sold some of the power plants to their own parent, so they were allowed to re-coup "losses" that were nothing more than a transfer of property from one division to another.
The power companies happily overcharged us for years, but when prices took a turn they didn't expect, they came crying to the state to help bail them out. What they should have done was use some of those $billions of excess profits from previous years to cover their operating losses from last year. Now, thanks to the amazing negotiating skills of Governor Low-Beam, we'll be paying ridiculously high electric rates for the next 20 years.
My father owned an apartment complex with a pay phone on site in front. One day the phone company calls him up on the pay phone and tells him that instead of paying him a 17% of the phone sales money each month, they are going to charge $10/month for the convience of having a pay phone onsite. Flabbergasted, he called the Arizona Corporation Commission. Just over 3 minutes after his call to the CC, the phone company calls back and says that they aren't going to make any changes to his pay phone agreement afterall...
In Oregon, he bought a piece of land and wanted to get it hooked up to power. It had been unused for so long before that the power lines that used to supply it no longer could be used. The power company told him he had to buy new wires, pay them $6K, and the wires he just bought would become property of the power company. Dumbfounded, he didn't do anything for a week and then remembered the phone problem above from years ago. He went back to the power company and just -mentioned- the Utilities Commission and suddenly they decided to lower the fee to $1K (never even actually went to the Utilities Commission).
:-)