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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.
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
Well, as long as the rolling DSL blackouts happen during the rolling electricity blackouts... bring it on!
SIGFEH
OK. So you're rather good at crafting the obvious flamebait. Now go ahead and take a whack at the other side of the argument. How do you create a competative marketplace with a service that already exists as monopoly (partly because of the nature of the resources involved)?
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.
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.
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.
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.
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.
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.
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.
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
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.