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FCC Abandons Linesharing, Kills DSL Competition
raygundan writes "According to Reuters, the FCC today decided to greatly curtail the laws that force incumbent phone companies to share their lines with their competition at cost. This does not bode well for companies like Covad Communications who provide DSL using phone lines to bridge their data networks over the "last mile" to customers. The new rules do force line sharing as long as companies are willing to offer voice service, but this essentially states that if you are not already a phone company, you cannot offer DSL. The existing rules will be phased out over three years. There is still some hope, however, that a federal court might strike down the FCC ruling. Oddly, the news agencies seem to be reporting this as a minor change to the rules, rather than an end to all non-ILEC competition in DSL." The FCC's front page has links (luckily PDFs as well as Microsoft Word files) about the decision, including statements from each of the commissioners.
From the article:
The Federal Communications Commission on Thursday voted to exempt new high-speed communications networks from requirements that they be shared with competitors, a move aimed at encouraging investment in bringing fast Internet access to consumers.
Right. Big time investment. Just around the corner. We just need to know it won't all get snapped up by our competition. But we're planning. Yes we are. Big Time Investment. Promise. Even though the economy's in the crapper. Investment. In the future. Of the internet. For Consumers. Investment.
Horseshit!
This is such complete and total doublespeak. Every telecom network in this country was built with public assistence. That's the way to "encourage investment." This is simply a move to allow the established Bells (and neo-bells, like SBC) reap more profit off of existing (publicly subsidised) infrastructure.
Where am I going, and how did I get in this handbasket!
Howard Dean for president
If I laid out a serious amount of money to establish COs and copper to (nearly) every house in the United States, I'd be a little pissed at the government for making me open it up to people who are offering competing services.
.. oh .. a year. When phone companies jack their DSL rates, and the competition gets locked out of the copper ... guess who they're going to turn to?
Technically, the Bells really should be able to lay down the law when it comes to who access their cables. I mean, it's their cables.
I'm all for competition, but this is kind of an awkward situation.
On the other hand -- all ya'll who are hot to trot with wireless Internet access: hop on the venture capital wagon, and start your roll out in about
I've been puzzling over something, lately. If AT&T was such a terrible beast that it needed to be broken up into (what, 11?) baby-bells, how is it acceptable that these things are pulling a T2, gathering themselves together so only 3 baby bells exist? Seems the whole anti-competitive issue begins there, not with the FCC yanking the rug out from under non-bell DSL providers.
A feeling of having made the same mistake before: Deja Foobar
DId you read the FCC desicion? I guess not, because on the FIRST PAGE of powell's DISSENT, he disagrees with the ending of line sharing. Next time, RTFA(read the fsck artical)
/sarcasm on
/sarcasm off
Dammit, thats so unfair. The government should force companies to sell their property to other companies at cheap rates. Why should companies benefit from investing in infrastructure? The big companies should just buy lines for other small companies to use for free because they have more money. Damn capitalist pigs.
Seriously? Anyone here believe in private property? I mean, would it be fair to for the government to force you to fix your relatives computers whenever they wanted because you have more knowledge then them? Or you to lone your car to the homeless guy down the street because you have more resources then them? I mean, if you want to, then sure. But to force you??
with dsl, the physical layer is the only thing under control. the code layer (dsl) and content layer (isp) is NOT controlled. it's open.
with cable broadband access, all 3 layers are controlled. you have to abide by WHATEVER the cable provider says. they have been proven on slowing down connections to sites that are competing with them or their network, and even blocking those that they see fit.
this vote is an abomination to the end-to-end openness that the Internet once was.
What you all must realize is that the ILEC's have been given HUGE tax relief on behalf of the federal government in exchange for their responsibility to deploy and upgrade next generation networks. Theoreticly, the last mile option these ILEC's are fighting for are owned by US taxpayers. There has been much relief and many writeoffs done by ILECs for years on this infrastructure, however they have neglected to fullfill their promises in a timely manner.
/early 90's. It wasnt until deregulation in 1996 that we started to see DSL.
You must realize that before deregulation, the telco's were selling us $1,500/month T1's and per-minute ISDN service. DSL technology is old and could have been deployed in the
Wait five years from now after deregulation occurs and we are still paying $50/month for 1.5Mbps ADSL when the rest of the world will have fiber strung to their doorsteps. The Bells have a history of stagnation and emtpy promises, thats why the telco act of 96 was created in the first place.
What we should get out of this whole thing is real innovation and competition. Now that it's becoming increasingly difficult to be a successful DSL provider, maybe we'll start to see viable alternatives to cable and DSL. Wireless has real potential, if you can make it sufficiently low-cost and secure ("secure" in the sense of making it difficult for people to hijack).
Oh, and by the way, wherever there's a cable company there's competition. We get our phone service from our cable company here. The only monopoly is in the phone lines, so all you need to do is what the cable companies are doing (and doing very successfully): find an alternative to the phone lines.
My understanding is that Bell has X cost invested in a mile of copper, but they had to lease at Y cost to Covad, actually losing money in the process.
09f911029d74e35bd84156c5635688c0
I live in the Washington, D.C. area where our local telephone monopoly is Verizon. About two years ago, my housemates and I tried to order DSL from them. When they finally turned it on (several months after we ordered it), it worked fine for a few days, then went completely dead. So we called tech support. After waiting 45 minutes or so to get through:
...another 10 minutes of pointless troubleshooting...
Us: Our DSL doesn't work
Them: Is your computer on? Is the modem plugged in to the phone jack?
Us: Yes, blah blah
Them: What color is your modem?
Basically, Verizon's tech support was completely useless, and the DSL never worked again. A month or so later we ordered DSL from Earthlink (with the line provided through Covad). They connected us within a week, and the line has worked flawlessly ever since.
If Earthlink, Speakeasy, etc. go away, getting useful broadband is going to be very difficult.
Basically, local telco monopolies have absolutely no incentive to offer acceptable customer service, and in my experience, they don't.
So the phone companies have monopolies on the wires running to your house, and you have no alternative but to use them... Exactly whose fault is it?
* The phone companies who own the wires running to your location?
* The local governments, who regulate how many wires can be put up, and extort plenty of cash from anyone who wishes to emplace new ones?
* The state governments, who already charge heavy tariffs on current communications methods (hey, it's a monopoly, we can milk it as much as we want), and also put more tariffs and more barriers on newcomers to the business?
* The federal government, which severely limits anyone who wants to try a wireless solution?
Forcing non-telephone companies off the lines of existing telephone companies' wires was a stopgap to the monopoly that brought an end to ATT.
Make sure that you understand: if it hadn't been for the FCC forcing the phone company to share its lines, then the Internet (and along with it, any innovation based on it) would not have come into existence as we know it.
As it stands, cable TV controls the physical, code, and content layers of TV broadcasts. Think about it: is there more than 1 wired cable TV provider in your area ? no, because it's a regional monopoly system. With this voting, the FCC is essentially giving that SAME control to the phone companies. when the phone companies are the only ones providing DSL service, then they will be controlling both the physical AND code (dsl) layer.
I don't give a crap (yet :). In Canada, cable modem access is wide-spread, even people like me (in the middle of nowhere) have it. DSL is limited to city centres (I'm, like, at least 10KM away from the nearest access point). The Canadian push to get the entire country onto the Internet most likely means that regulations such as this one will be few and far between.
Oh sure, let's all get 20 companies to lay their own pipes. Make sure they all work in your street. Oh all the tarmac-and-dirt-flinging-fun that would be caused.
But seriously, we could spend all day blaming one party or the other for this, or we could discuss the merits and problems of this new decision. Particularly interesting, to me, would be a description of the good things accomplished by the existing regulations. I was under the impression that the whole partial-deregulation quagmire was universally perceived as a disaster. Apparently you don't think it was. Why?
Yeah, the problem is though that the government subsidized the creation of Bell's infrastructure in the first place.
Just because the government handed out some money to someone, does that give everyone else the right to share their assets? The government subsidizes farmers, but if I wander onto a farm and pick a few apples, I'll get arrested for theft. Or a better example, I wouldn't be able to walk onto the farm and plant a few sq. yards of my own crop. Or at least I shouldn't be able to.
_______
2B1ASK1
Nope, it's your cable. They built it on public easments with monopoly protection. Keeping others off those lines is about as bogus as keeping others from being able to run their own last mile network, but that seems to be the way it was and is. Now demands have been made that others can use those lines AT COST and offer services that the Bells were unwilling to offer.
I'm hoping that Powel plays this well. As someone else pointed out, he does not agree. This is just the kind of thing that will turn Powel into a houshold word, if he can pull it off.
If he can't, I expect the Bells to start pushing their high priced and highly restrictive service. Woot, I might get to chose between two really lame monoply servers who own the internet.
Screw them. Build your chunk of the wireless mesh today.
Friends don't help friends install M$ junk.
This whole thing could backfire in the long run.
I seriously considered turning off all of my landline services last year. The only thing that stopped me was the announcement that DSL was finally available in my area.
If no competition in the DSL market causes me to turn off my DSL service, I'll likely turn off my landline phone as well, and go strictly cellular.
What we could see happen, with wireless technologies becoming more and more viable, is the elimination of any wired communications to the home.
Eliminate the "last mile" of copper and you eliminate the Baby Bells.
In many areas SBC only offers service out to 14,000 feet (maybe everywhere now, except for existing customers, and of course there are always exceptions but I'm not one of them) and even then they only offer 768k/128k for the price of 1.544M/128k. This is largely because if one or two subscribers are experiencing too much down time (as mandated by the FCC) then a whole CO (or more) can get shut down, and SBC has to pay big fines.
So basically, SBC/pacbell (in my area) is being forced to provide infrastructure, forced to update it to benefit their competitors, and for what? Because they were there first? That's bullshit, son. If the government wants to control the telephone infrastructure to this extent they should have to own it, and they don't. It's one thing to say that the phone company has to provide reduced-cost telephone services to poor people like me, it's entirely another to suggest that they should be leasing capacity to competitors at less than its value considering the amount it costs for maintenance.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
The only solution I see is to federalize these copper lines because of they years of protected monopoly status for the bells and allow linesharing. Powell is for protectionism.
In Canada the local phone company basically has a monopoly over the last mile, and we're known to have some of the best DSL and Cable internet access available in the world.
The problem isn't lack of competition, quite the opposite, more competition means more companies each with redundant staff and bureaucracies. The solution is to actually have the FCC mandate service quality. DSL service sucks down there because the phone companies are free to do whatever the hell they please.
If you had a government regulating body which looked out for the best interest of the consumer and dictated that the Bells must meet these service levels for customers things would be rosey.
But ooooh no, regulation is bad for business. BS! In natural monopolies like this it's the only way to go. You simply TELL the company they must provide quality service, no excuses.
Until this happens we're going to continue to see the weekly story on slashdot of people whining that their DSL is too slow or they can't get service.
Those lines were heavily subsidized by tax money, and the phone companies have priceless right-of-way for their lines. (Try calling your government and asking if you can put up some poles to run an ethernet cable to your ISP)
It's hardly "private property" when public money built it.
And to top it off, it's not "free," either. The CLECs (like Covad) must pay the phone companies the *same* rates they charge to their own DSL divisions. Covad pays SBC the same as SBC's DSL division pays SBC. And on top of that, SBC (or whoever your ILEC is) gets paid for the damn phone line in the first place.
So, they get paid for the line, AND paid AGAIN for the line by Covad, AND tax money, tax breaks, government assistance, and right-of-way to build the lines in the first place, and you think that keeping the lines open for competition isn't fair?
Screw that.
ILEC's should be forced to provide the infrastructure at-cost to CLEC's because the ILEC's have benefitted for DECADES on their monopoly status.
how long was it before you could actually buy a phone instead of lease it from the company?
Why is it "lucky" that they provide PDF's as well as Microsoft Word files? What office suite do you use? I use OpenOffice and it opens Microsoft Word documents just fine for me. Perhaps your experience has differed. Or maybe it was just another one of the snide jabs at Microsoft that is all too common in the story headlines on slashdot.
-Matt
Duke '05
they're refusing to upgrade their networks until they can be assured that they'll be the only ones to profit.
I'm sure their argument is that they won't upgrade because they are afraid if they do they *won't* profit. Me? I don't know who to believe... Sure the phone company is greedy and wants to keep this pie all to itself, but on the other hand their competitors are just as greedy and want a free ride. Government has to step in and set a wholesale price that in the end is arbitrary and probably has a greater corelation to which company funded which campaign than to how much the line costs to install & maintain.
The problem is that the one wire to your house IS a monopoly and there aren't many good ways to get around that. The only way to have real competition is between different networks - phone line, cable TV line (maybe the power line? wireless?) anything else is still a monopoly and you are only arguing about how to regulate it.
There were two major points being decided upon today by the FCC. The one people on Slashdot are crying and moaning about is for DSL only and has been outlined throughout the comments. The second point the CLEC access to lines through UNE-P which is what the Bells really cared about. This decision went the way of the CLECs/state regulators in that the RBOCs must still share their voice network with non-facility based LECs at state mandated prices. Note all of the RBOCs stock prices if you want to see which side won the war, no matter the decision of the DSL battle.
Scott, Keeper of the Crystal Flame
While technically feasible, the concept of line sharing IS stupid. The physical infrastructure is the monopoly issue, and should be treated as such: DSL service providers should be leasing the physical copper wires (to the extend that they are physical copper wires, anyway) from the customer to the CO.
I don't want POTS on my DSL line! I have no need for POTS! My cell phone is my primary phone number.
The market should embrace novelty, and if the cost of doing that is a second pair of wires to your home to accommodate POTS, so be it! (With the important market caveat that other people must feel the same way...) Splitting hairs over the incramental cost for DSL above POTS service is not productive.
Make the 3rd parties offer "full service" for them thar copper wires!
/reality on
/reality off
Most of the lines that are being leased were paid for by the public by means of government subsidies to the Bell(s). Not only were they subsidized by the public, but they have been paid for many times over; so they aren't losing any money. And they are definitely NOT private property. Even so, the CLECs ARE paying for the use of the lines (and the lower cost is not any lower than what the ILECs pay).
Covad has an enormous network of hardware and cable, they are only needing the last mile of wire to the home. Now they can no longer lease that small segment of the line that's ALREADY there.
Now, there was some sort of provision for new networks that were deployed to newly developed communities, and I can see the Bells being a bit ticked off about that...
"The Bells also won't have to let rivals lease access to new fiber lines that they lay down to connect new housing developments or businesses. Even that decision, however, is bound to cause confusion in cases in which portions of the Bells' networks are composed of both copper and fiber."
but that is only an issue with them selling their new network to phone carriers since Covad uses their own equipment and is just leasing a section of the line (as opposed to the CLECs phone guys who lease every bit of the line and the hardware that connects it).
Powell actually wanted full deregulation EXCEPT in the DSL market. What happened was the opposite. While this will help keep phone costs down, there's no reason at all that this will help lower DSL costs (it might, however, help DSL availability since the Bells have more incentive to offer it).
The other big issue is what is the point of having multiple phone lines going to the same building? Powell said ending the leasing of lines would encourage AT&T et.al. to run their own lines to offer competitive service. Does he realize how expensive AND wasteful that is?
IANAL, but I play one on
I love it when people who don't understand the history of the present situation try to act like they know something.
:)
Finally the bells can use their *property* without subsidising their competitors.
Property that was paid for via a government protected, anticompetitive monopoly with tariffed rates that kept costs high and federal laws that prevented competition. Line sharing simply recognized the reality of how those lines were paid for and how the law kept others from competing. We payed artificially high prices for decades to finance that property with the stated purpose of developing a public infrastructure...not as an act of "corporate welfare" for the Bell system.
This will be a good thing in the long term 3-5 years.
No better than what happened when the cable companies kept increasing rates and not improving service when THEY didn't have any competition. Think about how bad the cable is now...even WITH the competition from satellite services. With most consumers having only one, perhaps two broadband options left to them you can expect the costs to rise, bandwidth to get metered, and content to be prioritized via PPPoE. Fewer choices is NOT a good thing. Don't believe me? Ask any economist. And note that the non-Bell ISPs *consistently* beat the service ratings of Bell ISPs...see Broadband Reports.
As for comparing us to South Korea...? Do you really think our situation in the U.S. is even remotely similar to that of South Korea???
With previous rules there was no incentive to upgrade their systems because then their competitors would be able to use it too. Now we can have: cable, phone, satelite, wireless, and (perhaps) power line all competing.
With the previous rules the Bells simply followed the strategy of deliberately keeping their equipment primitive and broken to block competition long enough to put them out of business. They knew they were the choke point for the CLECs, and that if they could deny them revenue long enough they could put them out of business. And with most of the CLECs the strategy worked...most of the CLECs went under. Here in California Pacific Bell/SBC had a whole host of tricks to make it difficult for CLECs like Covad to get wire pairs for DSL installs...but remarkably had no problem at all when it came to handing out those same pairs to companies installing home alarms.
This is a good thing even if it is not the socialist position.
Drop the stupid rhetoric. The old, regulated Bell system was clearly more like socialism than what we have now. The US government protected them from competition for the better part of a century to allow them to build up their infrastructure. Ensuring competition by allowing competing providers to use the existing infrastructure just makes sense. Would you require each trucking company to build its own highway to transport your frozen chickens to market?
This regulation of forcing the baby bells to share their networks at cost is killing the large telecom companies. You know, the ones that laid the fiber in the first place, invested all that money, and employ many more people.
These "virtual" phone companies that ride the carriers _at_cost_ have been largely responsible for part of the telecom bust. It's the same model as Enron. Selling things that you don't actually own or maintain. If something goes wrong, you have to pay the carrier $$$ to get it fixed.
A few months ago slashdot was bitching about why cable was clobbering DSL and was taking over broadband, and there would be no more competition. Do you want to know why? The reason is that SBC (in my area of the country) is forced to give up their lines ANY TIME SOMEONE WANTS TO USE THEM, for free (at cost, but that bandwith is lost to SBC).
If you want real broadband competition you cannot cripple the companies doing the investment into the network of DSL.
Cable companies do not have to share their lines. The telecom deregulation act did some good, some bad. (We got worldcom and a bust, but attributing everything to that is not the best idea.)
I get long distance for 5cents a minute, and may soon switch to MCI for unlimited local and long distance calling.
Don't whine about access to a network you never built!
Yes. That would be fine. As would actual deregulation. If phone companies want to be able to cross all those million private property boundries with force of arms behind them, then the government should own those lines. Otherwise... I don't see a problem with taking away their leins on private property, and telling them that they no longer operate a utility. They must pay landowners to cross their property. And they aren't the only ones that can do it.
Either option works for me. Our current situation is crony capitalism, plain and simple.
There are no trails. There are no trees out here.
Powell isn't the only one. In fact, only two of the commisioners admit support for that specific issue. Makes you wonder how they can be dissenting from a majority decision when 3 out of 5 don't support it, and 2 of 5 were strongly in opposition in their public statement. Simply put, they got the copper-loop issue wrong.
See what happens when you take state governments out of the loop? I swear, repealing the Seventeenth Amendment just keeps on seeming like a better and better idea...
The phone companies (among others) are granted what is known as a "natural monopoly". Basically, the right to string wires (or bury them, etc.). Go the the gov' and ask them for permission to do the same thing... you can't have it. And, because monopolies are (in general) a "bad thing", in that they can extend to other areas (eg. If the phone company where the ONLY company allowed to string cable, the cable companies would be, well, screwed). As long as we are NOT allowed to string the extra cable, and this is imposed by gov' fiat, the companies that HAVE the cable must be forced to "share the wealth".
...choke... another "natural monopoly".
And that's the argument for why "TELCO must share". As to "viable alternatives", what would you propose? The only viable alternative I can see is the TV cable company.
Ratboy.
Just another "Cubible(sic) Joe" 2 17 3061
You guys fail to realize that municipalities control exactly what wire, where, and when flows over their easements. Most municipalities have already decided that only one cable company may run wires in the community, and only one telephone company can run wires. All others are screwed, the best the municipality will do is let others bid when the 99 year telephone services contract is up in the city before they renew the contract for that lucky one company to run the wires. So there is NO chance any other company can come along and run their own wires/cable. In this scenario, therefore, there is no way to have a choice because the municipality decided who the monopoly is for you.
If you really want competition and still preserve the 'you run your own cable, you're the only one who gets to use it' mentality, then get the federal government to superscede local municipalities authority to limit who can run wires, and make the easements available to all. Until then, linesharing is all there is to keep competition.
Right now the Phone company must provide lines to the independents for super discounted rates - and they still have to maintain them. I have heard from employees that upgrades to the network have been held off because they didn't want to offer it to the competitors but they are forced to by law. Hopefully we will see cheaper DSL and more coverage by this.
The only reason the f'ing sale price is below cost is that that is the rate they sell the service to their subsidiary at. If they hadn't been playing shell games with where is the money and just charged the true costs to their other divisions then they wouldn't have been selling below costs. The only intent of the cost structure was a level playing field. Trust me no one who has ever been a customer of SBC is shedding any tears for em.
There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
Lobbyists: $1.5 million Payment to RNC: $ 1 million Payoffs to FCC Comms: $ 500K Rewards: PRICELESS! For the rich, there's richer. For the rest of us there's getting screwed!
The internet is dangerous to a lot of people. Traditional media companies don't like it because it provides "unwantedly democratic" alternatives to the traditional mass media. It allows free trade of digital media (i.e. P2P), threatening the publishing/retail trusts. Internet radio is nipping (ever so delicately, just now) at the heels of traditional radio. Heck, it even threatens the phone company's monopoly on voice calls (i.e. VoIP, which is growing exponentially).
Clearly it must be stopped.
Their goal is to reduce the ownership of all user-facing internet services to a managably small set of large owners. Coincidentally, these will be the big media and phone companies that are threatened by the internet in the first place. When all the independents and smaller players have been eliminated, and less than a dozen RBOCs and cable operators control all broadband (and thus almost all internet access) in the U.S., they will kill what threatens them by simply raising the price.
Some number of months from now, users will find that their ISP has suddenly renegotiated their deal. The new choices will be cheap but brutally capped broadband that is useless for P2P, streaming media, and VoIP... pay-per-K offerings that ensure these things are prohibitively expensive... and classic, "business class" $1,500+ T1-style service.
Surveillance of users will become not only more pervasive but more standardized, as the Internet trust announces trade groups and landmark deals that support both police and "private" law enforcement efforts.
Of course, in addition to prices going up, this guarantees that investments in new infrastructure (to provide better services) will now entirely cease. Without competition to threaten offering anything better, the bells and cable companies will do what they have always done (before TA96). Absolutely nothing.
Oh, you thought the cable companies and bells would compete with each other? This one really slays me. Why spend billions competing when you can just form a trust and price-fix instead? This is capitalism 101. And when the number of players is that small, it's virtually guaranteed to happen.
I know, I'm a paranoid lunatic. None of this could really happen here, right? I mean, just because it's already happening in Australia, Canada, and England... pure coincidence.
Of course, this tragedy will cause lots of collateral damage. The first victim that comes to mind is the video game industry, which has lots of innovative, "harmless" uses for massive, cheap bandwidth. There are many others as well.
But for all you folks watching in amusement as the big players stumbled trying to crush P2P, VoIP, etc. with lawsuits and bribed-legislation, this is the other shoe dropping.
On the bright side, the market for wireless technology might be looking up... that is, until the FCC turns out to be less than forthcoming with licenses, rules, and considerations necessary to allow wireless broadband alternatives. Watch for it.
Want to Know How to Cheat the GPL? Read On!
Well how about Wi-Fi? Bridging the last mile with wi-fi sounds like a great way to give the finger to Ma Bell.
Damn I hate that bitch.
There is a group mentioned on slashdot a while ago that has finished work on mesh-AP routing. Locustworld Has also got hardware pre-built, and software to D/L. Ma Bell dosn't want compitition huh? How about no customers as well.
Damn I hate that bitch. A Lot.
Free market disobediance? hmmm.... Sorry if I sound a little crude in this post, but I am so damn mad I could just *censored*!!!