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DSL Amidst Phone Wars
DrewCapu writes "The SF Chronicle has an article which talks about the battles between SBC and AT&T & MCI over supposed unfair practices concerning DSL and switching phone companies. All sides have their own spin on it. Can't we all just get along? Things have been heating up ever since SBC got closer to offering LD in CA."
I live in Alameda (near SF), and I can tell you that the article is not stretching the truth at ALL. I personally have DSL thru a small local ISP who partners with Covad, but when I moved to my new apartment, I still had to get a landline from SBC (as they've apparently cut off the likes of Covad from getting dry pairs with no phone account associated for DSL). More on topic, several of my customers have switched to other local carriers, and either had to give up DSL (for cable, which in Alameda is run by the very excellent Alameda Power & Telecom, but I digress), or keep one SBC line.
I guess having AT&T and MCI on "our" side is a good thing, though with the Yahoo!/SBC DSL crap SBC is giving out now, I don't know why anyone would want to stay with 'em.
If I recall, the US is the only place that still has this. What if you're someone whose main phone is a cell phone, why should one have to get a redundant land line just to simply get DSL, whether it be the main carrier or an alternative? DSL is expensive as it is (contract, connection, no dissatisfaction guarantee), but one must also pay for deposit, connection fee and service on a land line as well? This is the main reason cable has more customers: the price is lower, they don't charge connection fees, they don't make you sign a contract, they don't make you buy the modem or NIC (hell the NIC is yours to keep after service is terminated), and you sure as hell don't have to pay for simply having a signal line to connect on.
SCB here in Memphis charges $50 a month for service. They make you buy the modem, they charge a connection fee, they require a contract. This on top of having to have a land line. All of a sudden this overpriced DSL now in reality costs $82, at the very least.
I'll stick to my $30 a month cable connection.
Whoa! Let's clarify the rules -- it's a lot more subtle. More like Microsoft's monopoly than the old Bell System.
Anybody can open a local phone company nowadays. Lots of us have... but if you want to reach residential subscribers, you can't afford to pull new copper wire (old technology, very capital-intensive) to each house. That is a true "natural monopoly", which means that the cost to a competitor would be much higher than the cost to the incumbent, making competition unworkable.
However, there's no natural monopoly to various other aspects of the business. So for instance Bell competitors (CLECs) can rent the wire, at a regulated rate, and provide dialtone and/or DSL over it. Covad does this, for instance. The current regulations (which may change; the Bells are doing a full-frontal attack on them at the FCC, and chairman Powell's their lapdog) also require the Bells to rent their switches at wholesale to CLECs. So a CLEC can lease Bell copper loops and switches, and thus provide service with none of its own equipment. This is called the "UNE Platform" and is how most (though not all) non-cable residential telephone "competition" works. Note that if it's called UNE-P, the CLEC sets its own prices quite freely, vs. the declining-in-popularity so-called "total service Resale" where the CLEC is just taking a commission on Bell's regular rates. So UNE-P lets New York City and Chicago subscribers get flat rate service, without Zone charges; it powers MCI's "Neighborhood" too. Note that Bells are not required to provide DSL to CLECs as a wholesale service, so it isn't part of UNE-P.
The controversy: If SBC (or another Bell) provides the dialtone, then they will also sell their ADSL atop it. The price for residential ADSL is held down because the dialtone line is paying for the loop; SBC's own ADSL "business" gets the line for basically free. So can Covad -- they can rent the "high frequency element" of an SBC dialtone line for near zero. BUT if the SBC dialtone line is being provisioned on a UNE-P or Resale basis, so MCI or AT&T (etc.) is the end user's phone company of record, then SBC as a matter of policy chooses not to provide its DSL service. This is pure spite, not technology --the UNE-P line is identical to an SBC-service line, and the UNE-P CLEC is already paying for the loop.
The nice thing about UNE-P is that you can switch carriers without really touching anything -- it's a computer entry, of who gets billed how much by whom. But because SBC refuses to sell DSL atop UNE-P, they "lock in" voice subscribers by threatening to take away the ADSL. They're gambling that they'll make more money by keeping voice subscriber than they'll lose by having UNE-P subscribers switch to other DSL providers. And, more likely, they are just such monopolists at heart that they don't give a rat's ass about maximizing their own profit, if they can thumb their nose at a competitor.
This all has interesting antitrust connotations (no, Bells are not exempt from antitrust any more) but that will take years to play out.
SBC didn't have a choice in giving AT&T/MCI/Bob's DSL access to their phone lines. If I 'member correctly, it was the toll for providing LD service to their captive local-phone audience (Telcomm Act of '96 - corrections, anybody?). They'd love it if folks had no choice but SBC products when picking telephony services, but that's not an option, according to Congress.
In the meantime, they would love to grab DSL users and generate more revenue. They're losing their ass on phone services, and as DSL becomes more commoditized on the backend, they stand to make a fortune (Pronto is becomming a large success), provided they don't screw it up. However, they've got competition in the form of DLEC/CLEC providers like Covad offering DSL and phone services over their wire. So, they've got to be competitive. Which lowers our costs.
To answer your question: all of the above. And they can't have it both ways 'cause the FCC and Congress told them so. Otherwise, they would.
It depends on who your phone company is, their equipment, and so forth.
Some local providers do this because they don't want the added expense of having two copper pairs (the local loop people because they have to allocate and maintain that many extra lines, and the CLECs because they have to pay the local loop people for every copper pair they use).
If you are getting business-class service, such as SDSL, then you automatically get a second copper pair for it and no voice line is required.
On a semi-related note:
We recently placed an order through Speakeast for SDSL service, 1.1M upload and download rate, static IP, etc. We are paying $200/mo, but it is business class service. Wanna host your own servers? go right ahead. Wanna run filesharing apps all day long? None of our business what you do with your own line.
The difference comes with having both a good, customer-friendly ISP (speakeasy) and business class service (aka NewEdge isn't going to take orders from the RIAA).
Natural != (nontoxic || beneficial)
The washington think-tank CATO held a conference on 11/14 called "Telecom and Broadband Policy After the Market Meltdown" where they invited industry analysts to debate the effectiveness of industry and government to solve the complete fuck-up that is home broadband in our time.
here's the link to the page, scroll down for the four-part, two-day real-video webcasts. put yourself in the know.That's not entirely accurate. According to the way the FCC wrote the UNE rules, SBC has to provide it's competitors (AT&T, MCI, Verizon, etc) the lines for something like $11.00 each. These very same lines cost something like $20.00 to SBC. How do I know? I work for SBC, closely with some of the groups that are involved with the UNE-P hullabaloo. Is it really unreasonable for a company to be able to get THEIR COST for parts of their infractructure that they are legally required to sell to their competitors? These same competitors didn't lay the same ground-work... This whole thing is kind of like "affirmative action" in that the concept is good but the execution is flawed. Special rights? No, just EQUAL rights, along with the responsibilities and crap that goes along with it.