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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.
(and I bet no one even laughs at my Devo parody, because of that silly little typo. Ah well. Stress relief paintball!)
Between this and the initiative to loosen the rules on media ownership, it's clear that he's got a soft spot in his heart (wallet?) for monopolies and oligopolies. And golly, he's a Republican! Who'da thunk?
Stop by my site where I write about ERP systems & more
ok, so what did line-sharing do for me anyway? I am in, what I consider to be, a large suburb of Minneapolis. We have about 60k people. I was unable to get QWest DSL b/c I am over 8 miles from the CO (don't ask me how).
My two other options were (ATTBI which is now over $60 w/o CATV, or IDSL through IIRC Covad for $90).
So what did it do for me? Nothing. I am still stuck with a service I am not entirely pleased with (the speeds are fine, it's the price increases and the conversion to Comcast that I am not happy about).
If I understand correctly, all Covad (or whoever) would have to do is offer voice and it wouldn't be a problem. Surely they could slap together some kind of VoIP thing and offer it to their DSL customers, then BellSouth would still have to share.
Hey kids, there's only 5 days left 'til Yak Shaving Day!
This ruling is extra notable because Powell, the FCC Chairman, publicly disagrees with their decision: "An FCC chairman has not dissented from a high-profile FCC ruling for roughly 15 years." Powell was a very strong proponent for deregulation, and it seems this time around, state regulators and Bell want the status quo.
The phone companies have been pushing for this for a while - it means they don't have to share and can basically charge what they want. I've heard rumors that some phone companies have been holding subscribers "hostage" to try to force the FCC to change the laws - they're refusing to upgrade their networks until they can be assured that they'll be the only ones to profit.
It's time for the phone company monopoly to end - it's obviously not working for the interest of the consumer.
Kiss it goodbye and place a call for a cable modem. With this ruling, the owners of the lines (the Baby Bell's) do not HAVE to lease their line's to any other companies. Thus removing the thing that STARTED the proliferation of DSL in the first place, and eliminating any competition to the Telecoms. You want DSL, get it through a Baby Bell. No other options.
This of course means that DSL can have the same restrictions put on it that cable does (no incoming requests, no servers, no static ips), which I'm sure will benefit "fighting terrorism", 'cuz we all know that terrorists run their own web servers from home via DSL.
*sigh* Anyone in the Michigan area want to share-lease a T1?
El riesgo vive siempre!
Finally the bells can use their *property* without subsidising their competitors. This will be a good thing in the long term 3-5 years. Take a look at Broadband deployment %s in South Korea for example and the costs, plus the speed: 70-80%, $30/month, and 8MBps etc. and you will see what we'll have.
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.
This is a good thing even if it is not the socialist position.
Where I live, I am 150 yrds from a box containing DSL equipment. I have thus far been unable to use it because SBC refuses to power it up as long as they are forced to resell service to other companies. Maybe now, they will turn it on and allow me to get decent broadband service. While it is bad for competitors, I *the consumer* will probably be able to get DSL now.
Perhaps because the Bell's infrastructure was paid for by the public, not by the Bells?
Black and grey are both shades of white.
Basically, the Big Phone companies have fabricated the argument that they're getting their clock cleaned by the Cable TV companies, and that regulations are stifling their ability to compete with CATV companies.
Cable modems currently dominate in market share.
Basically, they say, "There won't be any competition in broadband access because we can't compete with Big CableTV".
This is a joke, unfortunately, many people see it their way.
The thinking is... "We don't have enough time to do what is right, we just want to make sure we at least get an Oligopoly out of this."
The whole thing is a joke, and I'm actaully kind of happy that Cable will rule the day. I consider them the lesser of two evils. Also, I like the way cable franchises are granted much better than the original consent decree that split up AT&T.
The little companies get hurt. Ma Bell is just too powerful, end of discussion.
AT&T ought to hold onto their cable a little longer. But, they've got just too much debt.
Too bad.
When I was a small business systems consultant I frequently encountered a problem with SMTP. The DSL lines for a certain baby bell would not pass outgoing email if the "from:" field did not contain the approved domain. I likened it to the post office refusing to deliver mail that was placed in a box with a return address not on the block where the box resides.
If these companies can lock down these networks, then average users (those not interested/willing to manipulate email fields) are going to be "forced" to use the email domain of the provider as a return address. This provides these baby bell ISP's with a MSoft-ish method for bullying users into using their products (as opposed to just competing on the basis of quality).
This is anti-competitive, un-American and anti-capitalist.
The best way to do is to be.
From a linked Yahoo article: "Essentially, the majority of the FCC opposed the deregulation plan set forth by agency chairman Michael Powell."
Excuse my ignorance (I'm Canadian), but if the majority of the FCC is opposing it, how did the plan get decided upon?
The government should Nationalize the lines that run from the central office to homes, and rent those lines out to anyone for cost of maintenance.
Too bad most consumers are so scared of socialism, even though it has a place in situations like this. Ironic, that socialism could give us a truely free market.
The lines run through public property. They cross millions of private property boundries. They should be a public resource.
Then the Phone Companies could compete on products and service. And the Baby Bells would probably all go under in less than a year after exposing their actual incompetance in a suddenly open market.
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.
Here's a question though.. Do you really WANT every company and its brother running unsightly wires all over the place (or ripping up your roads to bury them)? Talk about duplication of effort, which hackers are supposed to hate..
Also, aren't the service poles and underground rights-of-way owned by the State, ergo giving the state a say in how those resources are used?
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.
ILECs have not been forced to share their lines at cost. That is a myth invented by the baby Bells to convince lawmakers that linesharing makes them lose money. Actually what the 1996 Telecom Act says is that they have to rent their lines to outside customers and they must charge everybody the same rate, including internal customers.
A popular stunt among the ILECs is to rent lines to their own internet divisions at way below cost, thus making their internet business seem more profitable than it is. The 1996 Telecom Act just evens the playing field in that respect and prevents the Bells from using their local loop monopoly to prop up other corporate divisions.
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.
This is actually not as bad as it sounds when you consider that FCC Chairman Michael Powell *spit* wanted to completely sweep away ALL the regulations that require the ILECs to share lines. His proposal was defeated with respect to local phone service because Republican commissioner Kevin J. Martin jumped the fence and sided with the Democrats. So while this may suck for Covad, Speakeasy, etc., at least it won't totally eliminate DSL competition for now.
Probably both sides are going to be unhappy about this. Expect this battle to go to the courts next.
This article has more good info.
Never approach a vast undertaking with a half-vast plan.
I gave up DSL and got a T-1 a little over a year ago. $400/month and I share it (and the cost) with my neighbors (802.11b). All the IP's I want (within reason) and it has never once gone down. Money well spent.
Finally the bells can use their *property*
Who bought the initial infrastructure? Was it entirely Bell's investment, or did the local governments pitch in some funds as well?
Will I retire or break 10K?
If it's just the cost of maintaining the line, then where's the incentive to put in new lines and roll out new services?
Best Slashdot Co
Maybe it's retaliation against the growth of VoIP, and the fact that regulation of it is still pending (if not shot down already).
Hey, that's an idea! Demonstrate VoIP for the dingbats at the FCC, to reinforce the idea that any ISP (owner of the lines or not) can do voice service!
All I want is a kind word, a warm bed and unlimited power.
So what are the Canadian requirements on ILECs concerning CLECs (line-sharing, colocation, etc.), non-carrier ISPs, etc.? I went to the CRTC Web site, but none of the "Statutes and Regulations" appeared to address that, and there are a ton of "Decisions, Notices and Orders" but I'm not going to plow through all of them. (Even a Google search for canadian regulations CLEC line-sharing turned up a pile of stuff the first items of which didn't seem to directly address the question.)
I signed up for USWest's DSL service. They were extremely prompt about installing everything so they could start collecting money from me.
After it was up and running, I called USWest and changed ISP's. They had no wiggle-room for fucking up the line, since it had obviously been working fine for the two months that USWest was my ISP.
I reccomend this tactic highly.
Information wants to be anthropomorphized.
The real big problem with broadband is that you can't know whether you are allowed to have it until you try to get it. This has kept me from moving! I would rather stay in my apartment where I have 1.2 megabit dsl, static routing, etc., (costs $109/mo from the ISP + $65/mo from Qwest!), than to try to move without knowing in advance whether I can get the same service. The telco would expect me to move first, close a real estate deal, get a phone line and THEN find out whether or not DSL is available.
If I were to try to move, I would have to do two things. 1. Stay at the current address until the deal is setup at the new one, phone line is installed, DSL is working, THEN cancel the old service and move. This will increase the cost of moving substantially. 2. Ensure that the real estate agent or landlord understands that it's a deal-breaker (escrow money is refunded, deposits returned) if it turns out DSL is not available, and that it might be a month after closing before this is discovered. I'd need that explicitly written into the contract, and absolutely clearly understood by everyone involved.
If I'm looking at a piece of real estate, I want to know what utilities are available, as the very first items to evaluate. I want to know if it has running water, electrical service, natural gas, if there's garbage collection, telephone service, cable tv, and, DSL. Since my career depends on the internet access, it's actually on the same list as running water and electricity. And I can actually work around the lack of water and electricity, but if there's no DSL I'm stuck.
So, why can't I find out BEFORE getting involved with a piece of real estate, whether it has this service available? Also, what kind of approach can I take to force the issue? I don't want to sign a contract or a lease without knowing in advance whether I can get DSL, what signal rate it will support, and what providers will offer the service.
-fb Everything not expressly forbidden is now mandatory.
The market was oversupplied because for comparatively little capital outlay any Joe and his brother could form an CLEC and "offer DSL" resold off the ILEC's network as mandated by the FCC.
It's competition, and it's good. Changing the rules like this is nothing more than protectionism for these companies
What the hell is "competitive" about forcing companies to share their networks with some low risk/low capital Johnny-come-lately after they had to risk billions in capital to build their broadband infrastructure?
It's nothing but socialism and government meddling in the private marketplace.
The phone company will start gouging and the wireless networks will really start to grow...
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All local DSL competition in my town has either gone bankrupt or driven out of bizness by the local bell, who offers expensive DSL with strict terms of usage attached (no home servers, ports blocked, etc). The local calblemodems are way too expensive to get a fixed ip address and they too forbid home servers on the $50/mo dynamic ip addresses (and throttle you to 500-700Kbps bandwidth).
I've now signed up with a new local WISP who's giving me 2 fixed ip addresses and 11Mbps to the tower, but only 1.5Mbps from there to the backbone and about a dozen customers are sharing the tower right now for only $45/mo. Not too shabby but my DSL provider had better general overall thruput at the same 1.5Mbps (they had better routing provider) before they went belly-up.
Suppose I live close enough to the CO to get DSL in the first place. Could I rent a bare copper line (the "alarm" scheme) to the CO and have them tie that into my preferred ISP's DSLAM?
The SCO lawsuit makes me wish my company were in Utah. We need a new building.
Nope, it's your cable. They built it on public easments with monopoly protection.
First, the cable in most places wasn't paid for by the government; easements, yes, hardware, no. The exceptions to this general statement are in places where the cost of installing the cable and hardware could never have been recouped (sparse rural areas, etc.) over their lifecycle; and that was paid for by the government by a universal connectivity tax imposed on the customer base ... a tax which is still imposed on every line, in spite of the fact that "universal connectivity" was achieved two generations ago.
Further, the monopoly protection was granted in return for nearly 100 years of delivery of government mandated QOS guarantees, universal access, interoperability and standards compliance that have driven world telecom markets, a steady tax stream (collected by the Bells on their dime for the FCC and local governments), rental income on many of those public easements, government mandated rate structures, etc, etc, etc. The government granted phone monopoly has for a very long time been a cash cow for the federal government, and local states take in a big chunk of revenue as well. The monopoly grant was a tit-for-tat public-good agreement that has long since been paid off, because it achieved its objectives of universal access to a nationwide publicly accessible switched voice network.
Now demands have been made that others can use those lines AT COST
And you'll find that the ILECs don't really argue against access (they might if the opportunity presented itself, but that isn't their main objection). Their argument is that the definition of AT COST is unfair and discriminatory. The definition in force until this FCC decision of AT COST only allowed the inclusion of ongoing direct maintenance costs, and that even those numbers were being low balled by regulators (according to the ILECs). The ILEC argument is that AT COST should be defined in terms of total LIFECYCLE costs, particularly since maintenance is such a relatively small fraction of the purchase-installation-maintenance-disposal cycle.
The ILECs further argue that by being kept out of markets like cable TV and long distance (remember, THOSE companies are not being forced to provide access to their infrastructure, at ANY cost) that they are being unfairly forced to shoulder a cost burden that no other telecom grouping is being asked to provide in return.
Does that really lead to a lack of investment by the ILECs? I don't have a clue; I'm sure that it is part of the issue, but there are certainly others. But it seems to me to be a fundamentally unsound premise that a long ago repaid, mutually beneficial, regulated monopoly agreement between the government and a private industry (an agreement, by the way, that was ruled to be illegal, and forcibly broken by the federal courts) can be used today to prop up competitors who are not being asked to provide very much in return...
The government only subsidized the building of phone networks in the 1930s as part of the "New Deal" to get phone lines and electricity to the rural areas. Everything to that point was built by private investment.
There has never been a spending bill or investment like that since.
I honestly dont know where you get this:
Yeah, the problem is though that the government subsidized the creation of Bell's infrastructure in the first place.
because it's just not true. This parent should be modded wayyy down. Right of way is purchased, not given freely. The government did not subsidize, at least not in the scale you and so many other slashdot posters seem to believe.
Since now the DSL vendors have to string something for the last mile, how about fiber? They can use the extra bandwidth to outsell the monopoly telcos by providing higher bandwidth Internet service, digital phone service and video on demand. Since they don't have to worry about carrying the overhead for the obsolete stuff, the cost of doing this can be quite reasonable. Using VOIP for the phone service they could offer services that the POTS telcos could not! Use the video on demand to sell the Internet portion. Since there is plenty of bandwidth, provide a complete package to tie in multiple computers, multiple TVs, multiple phones and wireless. Since they are no longer telcos (as defined by the FCC rules) they don't have to worry about the regulations.
If the DSL providers compete on a different level they can win this. This decision was a result of the FCC being bought by the telcos. Plain and simple.
Quit playing Monopoly with Bill.
Linux - of the people, by the people, and for the people.
The first Baby Bell breakup had everything to do with deregulating long distance, and that did wonders for the American consumer.
However, with the modern approaches to communication, the Baby Bells need to be broken up in another way I have not yet seen mentioned:
Separate the dial provider from the infrastructure provider.
Check this out: You RBOCs would be split into two separate entities, your dialtone providers, and your cable-line providers.
Unfortunately, the infrastructure generally lends itself to a natural monopoly, similar to electrical service...but in most places, we can choose our energy provider...but still need to pay the distributor.
This could work well with phone service. Once company would own and maintain the infrastructure, and provide the physical path for anyone who make service available on it. Then the costs of the line would have to be paid by the service providers you choose, be it Covad, Verizon, or AT&T.
It would be nice then, because any companies could provide competing service if they all have to cover essentially the same wireline costs to reach the consumer. However, if the bells get to keep the whole ball of wax, then there'll never be any good service.
I've got my Covad IDSL line because I have no restrictions on what I can do with it...and I have a block of IPs. Compare that to the "business-class" Verizon DSL and cable modem service, and I get one IP...no routable netblock...and a ton of service restrictions (i.e. no servers).
In short, unless the physical plant is made into a separate operating company, we will never truly have competition for telephone service.
// Agent Green (Ian / IU7 / KB1JQO)
// IEEE 802.3: All 10base Are Belong To Us
I commented on this in a post previously regarding telecommunications. But I can't remember what the topic was and I'm too laszy to search.
Basically, and this is only my opinion, of course, but the only real solution that I see is to remove services from infrastructure. Let a single recognized monopoly exist that does one thing: owns the copper. Thats it, nothing more, and never allowed to provide service.
Then bill access out to any and all comers from Sprint and AT&T to Billy-Jim's Telephone and Crab Shack to provide the actual voice and/or data. If there is ever a new technology that needs to roll out, let the cost of the system be shared between the infrastructure company and those service companies that see themselves as providers of that service.
But that is an even more drastic change to the telecommunications industry than was the Bell breakup.
It would be nice, but so much for my well-supported Earthlink/Covad DSL...
What?
In some sense, I think this was inevitable. When one company is responsible for the infrastructure and is required to allow other companies to use that infrastructure to compete with it, it's too easy to make an argument that that's not a fair situation. That argument is incorrect in this case (see various posts above), but that's not the point. The point is that sooner or later, the local telcos were going to muscle out the competing ISPs.
So what happens now? Once the rules get fully phased in, the rates will rise as the telcos milk their monopolies on internet service. At some point, someone will complain, the government will step in, and internet service will become a regulated monopoly.
In the end, I don't think that'll be a bad thing. Local telephone service is a regulated monopoly, and it's been pretty good so far. But it might take awhile to get there.
If you say "I'll probably get modded down for this..." then I will mod you down.
OK so here's my thing: Tax money was used to subsidize laying down the copper for the telcos, but wasn't it also used to help the cable companies run cable to my house? In my neighborhood the phone lines and cable tv lines run off the same poles. This reasons that the cable companies should also be forced to allow competition on those lines. (Or maybe not anymore, as in this ruling). Why treat the 2 any differently anymore?
This is why someday wireless is going to be king. Can't wait.
> You could say that about every business.
Only those that are natural monopolies. There's only one road directly outside your house. There's only one gas line in. There's only one electric main. One phone line. One cable.
Some things are natural local monopolies due to physical resource limitations.
Have you looked at Teletruth's filings which explicitely point out how Verizon specifically got taxpayers to pay for upgrades which haven't even happened, yet are still being paid for? Read the rest of the stuff on that site, too... it's very educational.
Besides, why would you say the ILECs is doing so poorly right now? They're certainly not tanking like some industries, and although the general telecom isn't doing so well, that's also counting in things like the paging market (flying downward) and all the third-party DSL providers.
Yes, they're laying people off... they're also paying huge bonuses to their CEOs.
But I guess the slashdot editors would rather bitch about it in retrospect than do something about it beforehand.
Build stuff. Stuff that walks, stuff that rolls, whatever.
Bah, you all just need dedicated unbundled loops and SDSL connections. Line-Shared ADSL? Blah I say. Not to mention this does not effect ILEC provided Line-Shared services (Like Qwest DSL). The ILECs are required to provided these services, and the times coming when they better have it, or pay the price, thanks to that fiasco of a '96 telco act. What does this do? It forces CLEC's to get their acts together. Very few CLEC's that exist do what they were originally intended to do, compete against the incumbents! Compete with, not have the incumbents subsidise their existance... God I love my 1.1mbit SDSL connection, I love my 30-40 ms away from such sites as yahoo and google, my 99.99%+ uptimes. I think my ISP did it right, they are fairly small fish in the world, but they are a PSC regulated, Tier 2, CLEC, that creates it's own private infrastructures (FTTH, FTTB, CTTH) or uses dedicated unbundled loops from the ILEC, are triple-redundant, ds3 and oc3 connections, and all of this where? Montana of all places. Rural broadband? How about a dark fiber loop to your home?
WE DON'T NEED TO INVEST IN COPPER NETWORKS
Let's get this straight. Line sharing doesn't create a disincentive to invest, because the network ALREADY exists. Secondly, We need to stop pouring our money in copper networks. Cutting line sharing was the worse thing the FCC could have done for the deployment of broadband. This will effectively kill the competition (Covad), who has played a key role in deploying broadband where the Bells didn't want to. This was a retarded move.
WE NEED TO INVEST IN FIBER NETWORKS.
We do this by forcing entrant competition to build thier own facilities and fiber networks (THESE ARE THE NETWORKS YOUR DON'T WANT TO SHARE). Facilitiy based competition will truely help in lowering costs, create new jobs, build a redudancies in our important communications network, and lastly give Lucent, Nortel, and the shot in the arm they need by giving them new business.
The Bells and Democrats just used your own conservative zealotry against you, and turned slashdotters against thier best ally, Michael Powell, who would have kept line sharing.
That's how dichotomies are played...
"Communism is like having one [local] phone company " - Lenny Bruce
Thanks for putting some sense into the discussion. The phone companies were protected by the government for years. Sure, Bell did some nice research, but they didn't provide very good service. They charged huge amounts of money ($60-$100) for telephones! You weren't allowed to hook up your own phone.
Competition in long distance has worked. It can work for the local telcos too.
Why can't we just change the local telcos into line-lease companies. The actual phone service and "high frequency" service portions of the company could be split off to compete fairly with Covad and other DSL providers.
Actually, it is now (as it should have been) on the hands of the states to decide. The states can still force the BBs to share the lines but the federal government wont anymore. You may think this is a bad thing but the feds giving power back to the states is a GOOD thing.