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Baby Bell Deregulation Bill Fails To Pass In Kansas
Masem writes "A rather interesting debate has been happening in Kansas recently that has been mirrored across the country, in that the baby Bells have been trying to urge state governments to remove the restrictions for them to offer their lines to outside parties; in exchange, the Bells have been promising to develop a strong broadband network in the state. (See, for example, this and this story on DSL Reports for efforts in Missouri and South Carolina.) However, the legislative commission in the Kansas House of Representatives that oversees the telecomm industry has voted against such deregulation, citing concerns on monopolies and competition, despite heavy lobbying by SBC in favor of the bill. SBC has stated that they will now put their broadband deployment plans in Kansas on hold, but look towards the outcome of similar discussions on the same bill on the Senate side of the Kansas Congress."
I fully support the idea of belling babies, in principle. I've had these little bastards sneak up on me before with their deceptively cute little eyes and sharp little growing incisors, and I can say from uncomfortable experience that it's just not pretty When Babies Attack.
The question is, who's got the guts to do it?
Please. If they thought they could make money from the network, they would have already developed it. If they think they can not make money, or they envision a free ride somehow, they won't develop one.
Their is only 1 consideration for corporations. How much money. Promises are meaningless.
Let them develop the (quality lowcost) network on the promise that they will be deregulated after they do. See if that happens...
"SBC-Kansas president Randy Tomlin had said that without the legislation, SBC wouldn't invest in expansive broadband deployment in the state. The company only offers the service in 24 Kansas communities.
"The big losers today are the people of Kansas," said a visibly angry Tomlin as he read a prepared statement following the meeting. "They lost the opportunity to keep pace with other states when it comes to telecommunications access."
OK, let's see what we have here:
The Kansas legislature voted against allowing SBC to cut off competitors who wanted to compete against them in DSL service. Free market types kept saying that it's their lines and why should they have to share them? The answer is because without government regulation, the consumer would be faced with a monopoly situation that would be anti-competitive and anti-consumer. Let's see if SBC agrees:
SBC wouldn't invest in expansive broadband deployment in the state. -- Translation: We lost and we are taking our toys and going home. Oh wait, we are home. Well we won't do any more investment because we care about the consume-- er, because we care about our profits above all.
"The big losers today are the people of Kansas" -- Translation: The big winners today are the people of Kansas.
"They lost the opportunity to keep pace with other states" -- Translation: Other states that are also under attack from the incumbent Bells.
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So, it's basically nothing more than blackmailing the government, with potential paying customers held in limbo. Doesn't seem like a very smart move.
Of course, harming customer confidence seems to have no meaning in the telecom/broadband world, where a few companies essentially already own all the business. Because, where else are you going to go? Just call any broadband provider's customer/technical support to learn that.
It has been proposed by many of the Baby Bells' competitors that the government could solve this problem (and all of the fighting) if it would split the ILECs: one company "owns" the last mile and sells access while the other new company offers serives over those wires. Naturally, the Baby Bells have been fighting this proposal tooth-and-nail.
I honestly don't know if that proposal is the best solution, but if it comes down to splitting the Bells versus local governments seizing control of the last mile...as a customer, I'd prefer the former over the latter.
--K.
Sig: Bad people happen. Try to avoid being one of them.
Can these companies be held liable under the RICOH act? In essensce, what they are doing is extorting the people of these states? They are demanding huge sums of money in order to provide broadband service.
I don't think it's really extortion, since it's unlikely they would build out broadband if they _did_ have exclusivity on their lines. Here's why:
The bells have copper going everywhere. It's very expensive to run new cables places, even without right-of-way considerations. That huge expense is the reason that it took so long for many cable companies to offer broadband in many areas (Cablevision still doesn't offer it in all their areas, I think). If you don't already have right-of-way, it's extremely unfeasible to run new cables. That's why the telecomm act required the bells to share their lines in the first place.
So, assuming for the moment this passed... why would the bells bother developing a new broadband network? Once they have exclusive use of those lines, what competition is forcing them to invest the money... rather than just jacking up the prices?
As Teletruth shows bells have defaulted on their promises in the past, choosing to rake in profits from their existing infrastructure rather than invest in new (expensive) work, even when they're allowed to charge for the infrastructure work!
You might say that cable modems are the competition that would drive them to invest, but so far the only response I've seen from Verizon is a bunch of ads telling how much worse cable modems are, while their service is the same price but slower, and not even available for my apartment. (6-year old construction, too... not like we were in an old neighborhood or something.)
Either way the legislation goes for the bells, I doubt their customers have to worry about seeing broadband any time soon.
I'm not completely familiar with all the details on this, but having dealt with SBC for a number of years now with the company I work for and having been a locked-in customer of theirs for all my life, all I can say is Hoo-Yah!
Their arrogance is typical of all regulated (and unregulated) monopolies. The president of SBC Kansas Randy Tomlin, according to the Topeka Capital Journal, reacted angrily, "The big losers today are the people of Kansas. They lost the opportunity to keep pace with other states when it comes to telecommunications access."
Reality check, Mr. Tomlin. Your company will never voluntarily provide any kind of broadband Internet access in any locality of less than 2500 people, unless, of course, your definition of broadband is 26.4 kbps through a Pair Gain system. With is currently the case for the majority of your customer base. You most likely don't have a clue as to why wireless broadband is taking off either.
These tossers got exactly what they deserve, particularly after eliminating several hundred jobs in Topeka right around the first of 2003. This should give some idea to their cluelessness. Eliminate jobs, then ask the legislature for an end to regulatory oversight of their "broadband" division.
SBC has become among the most predatory of the "Baby Bells" and it's time somebody told them, "No!" Even AT&T praised this bill's dismissal in committee.
It isn't often I praise the actions of our legislature in Kansas, but this is one of those times when they deserve a good word for their actions.
"Insanity is doing the same thing over again expecting a different result."
Broadband should be rolled out by local cooperatives, not big corporations. You can't trust a baby bell to deliver service. Maybe then we'll get metered broadbad, rather than gouging us all for a few industrial users.
What if it is just turtles all the way down?
My parents live in Kansas. Way out west where the only way to actually get technology was to form (gasp) cooperatives. That's right, apparently the anti-communist propoganda 50 years ago failed to disuade the locals from setting up cooperatives to share the technology for all. Granted at first they only shared phone lines (the so called party lines). What does this cooperative get them these days? Well it got them DSL 2 years before my appartment in Manhattan had it. Rates are as good as I've seen anywhere and since its a cooperative, everyone gets a check once a year or so with a refund. Check out the local telco united www.ucom.net. See any lack of service there? Any exorbitant prices? Nope, didn't think so. Granted, some people might want to go with SBC -- maybe they see a pretty ad on TV or something and really want to switch, but when it comes down to it -- and your next door neighbor works for the local phone company, the people of Kansas know what side their bread is buttered on.
Let me first say I am biased. My mother works at the coporate headquarters in for SBC in San Antonio, TX.
Now, from what she tells me, SBC is forced by current regulations to sell access to their lines to competing phone companies for less than it costs SBC to up keep those lines. I saw another poster say that SBC does not own those lines. Yes, they do and they are the only ones who do up keep on them. No other non-Bell company has the infrastructure or know how for doing line upkeep. So if SBC goes under you will suddenly find that there is no service without SBC. These so called other phone companies are just carriers with no real phone line assets. Since by federal regulation (what is often called deregulation) they don't pay SBC the cost of up keeping lines that they use, it comes out of the SBC shareholders pockets...even when SBC does not carry the majority of the customers in any given area.
Keep that in mind next time an SBC guy comes out to fix your line even though you use a different carrier. You are essentially getting a free service (or ripped off if you carrier is charging you a service fee for it).
Within a couple days Ameritech came back and said the line was ready, so Northpoint was scheduled. When the Northpoint tech got there he said the pair was not ready, and called Ameritech who stated it would be at least 2 weeks. When Northpoint called to follow up with Ameritech, they said it was ready and to send out their tech. Trip two for the Northpoint guy resulted in even worse line conditions, trip three was planned and supposedly coordinated with Ameritech. This went on 3 more times just at this one house, and finally the line was ready and the DSL was operational. It took about 120 days from order to live, and everyone was pissed.
Now repeat this scenario for 5 other execs at my place and 2 friends of mine who lived in the same general area. I was an Earthlink dial up customer at the time, signed up with them for DSL, they were told by Ameritech we were ready to roll, they sent me a self-install kit, and when I tried to hook it up and it failed, they told Earthlink my address wasn't ready. And for 2 years I lived without DSL, unitl Earthlink gave up on this market, Northpoint was gone, and Ameritech had the local market to themselves. Two weeks later my line was approved, and on the fourth wee I had DSL at home.
This is clearly and abusive monopoly, and the fact that they are openly blackmailing state and local governments should be dealt with in a swift and harsh manner. As a country we have been promised repeatedly that deregulation of all public utilities and services will promote competition, preven monopolies of this sort and generally lower prices. Yet my DSL was held hostage until Ameritech could profit directly from it, my cable T.V. cost more than ever, heating cost go up each winter, and cell phone rates aren't much better. Hmmm, globalization, corporatization and deregulation of everything isn't helping consumers, big shock.
Here in Arkansas South Western Bell has already halted its DSL expansion until it can get a bill passed which will allow exclusive line rights. If you believe what they have to say about it looks like this:
1) SwBell spends untold dollars expanding DSL coverage
2) The bastards at the ILECs come in and rent the lines at a quarter of the cost and undercut swbell's profits
But the real situation is more like this:
1) Tax payers subsidized the installations of phone lines and gave swbell exclusivity for a long time in exchange for the initial investment, which, mind you, was subsidized.
2) Swbell wants this next phase ( dsl expansion ) to also be subsidized and have indefinite exclusivity.
Other little facts:
South Western Bells president made $84 million last year.
They proposed a plan to put neighborhood gateways into every dark spot in the central arkansas by 2002 ( project pronto ), upon deregulation, the plan was frozen.
They are laying off workers fast enough to make fuckedcompany give them big ratings
SouthWestern Bell is screwing everyone.
I see a couple of people above moaning that SBC is forced to sell the "last-mile" loops to competitors for under cost, meaning the price they charge to the CLEC is less than it costs to maintain the wire.
This is patently false.
What the truth of the matter is this: the ILEC has to price the loop costs equally for all comers, INCLUDING THEIR OWN INTERNAL CUSTOMERS. Thus, out here in PacBell land, the costs that PacBell charges a CLEC (say AT&T or Covad) to lease a loop is the same costs is must charge PacBell Internet to lease that loop.
Guess, what? The ILEC like to subsidize their ISP and premium service groups by "selling" them loops for less than they cost. Regluation simply forces the ILEC to play fair, by allowing other CLECs to get this same price, and thus not allowing the monopoly on physical loop ownership to spill over into other services.
The ILEC could charge CLECs the proper amount to cover their costs, but they'd have to charge their in-house divisions the same rate. Thus, in reality, it is not the CLECs who are getting the free ride on the backs of the ILEC, but that the ILEC is propping up one of its own companies at the expense of another part of the ILEC conglomerate.
The Kansas legislature was completely correct - don't ever believe an ILEC "promise" in exchange for relaxation of regulation. They lie through their teeth constantly.
Fundamentally, the real solution is to force the ILECs to divest from physical loop ownership, and spin off a seperate company which is only allowed to own the loops, but may not sell data/voice services over those loops. Keep the hardware (a natural monopoly) distinct from the data (a natural competive market). Right now, we mix the two, to the detriment of all.
-Erik
There are always four sides to every story: your side, their side, the truth, and what really happened.
Why Covad, despite having the technical knowledge, equipment, and personnel to do so, was not allowed to fix the shoddy SBC telephone line that connects my apartment to the CO? There are an unholy number of bridge taps, load coils, and a couple of LONG unterminated pairs connected to my line which make it impossible for me to get DSL from anyone, including SBC. And it's SBC's fault it's screwed up in the first place. All fixable, but in the three years I've lived here, SBC has not lifted a finger to fix things up.
The Covad tech apologized for not being able to set up DSL for me due to the poor condition of the line, but lamented that under the current rules, SBC *WILL NOT ALLOW* Covad to fix the lines themselves. If SBC wants a monopoly on my g*ddamn phonelines, they had better be able to do this "upkeep" your mom claims they are doing. They've not been doing it on my lines, and they've been shirking their maintenance duties for years in Indiana. They have been sanctioned repeatedly for it by our state government. This is as close as you can get to a government stating "You, SBC, are guilty of sucking."
Your Mother is either not in a position to know what's actually going on, or is part of the marketing machine that tries to make their competition out to be bad guys. They are not. They are fighting like hell just for the chance to be ALLOWED to clean up the unholy clusterfuck of a mess incumbents like SBC have made of the phone system. Which was given to them in the form of right-of-way and tax-funded subsidies in the first place. It is not theirs to lock up, no matter how much they repeat that to themselves, your mother, and their potential customers.
"But they should have to build their own lines, too!" you whine. That, my friend, is impossible. The right-of-way has been granted, and it is being held rather tightly by the incumbents. Call up your local government and just TRY to get approval to run some cable on a couple of telephone poles, or to dig a miles-long trench for some fiber. I'm sure they'll sign you right up as Mr. New Phone Company. Nobody new can run their own lines. Thank god for wireless, and here's to hoping it crushes SBC in the coming years.
I'm sorry for the harshness, but after SBC has fought and fought to avoid upgrading the lines to my area, and actively prevented the Covad techs from cleaning up FOR them, I have no respect for them.
I sincerely hope the government takes the lines back and kicks the lazy bastards out, since SBC and their ilk are clearly not capable of keeping things running.