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.

Comments

DSL.

[garcia]

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).

Interesting

[ShavenYak]

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.

Re:Interesting

[Telastyn]

Hell, it doesn't even have to be working, just offered. Just the offer of local phone service for some outrageous fee should be enough to require sharing.

The Bells have been dicking people around for ages, why not return the favor?

Re:Interesting

[Krow10]

Blockquoth the poster:

Hmm. Bell installs telephone infrastructure.

With government subsidy and a government guaranteed monopoly.

Bell gets split up.

Because AT&T wanted to start manufacturing computers. The government didn't want them leveraging the protected monopoly in order to compete in an unregulated industry.

Baby bells enhance telephone infrastructure.

At a snails pace, since it didn't make any business sense to add low cost broadband to compete with their high cost digital lines. DSL was going nowhere until cable & the telecom act forced their hands.

Covad and others come along and want to use the infrastructure for essentially free.

No, not for free. Just for the same price that they charged their internal business unit.

Personally, I would have liked to have seen a stronger Telecom Act -- split the infrastructure from the service providing units competely. Continue to regulate the infrastructure company, and deregulate the service company completely. The infrastructure company would make money by charging the service companies what is costs to to provide the infrastructure. This is essentially what the Telecom Act tried to do without actually breaking up the Baby Bells. And the Bell lobbyists and PR folks have earned their money selling the FCC and people like you a long line of shit.

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.

Indeed, that is bullshit, because that is not what was required by the Telecom Act. All that was required was that they charge external customers the same price they charge their internal customer. If they aren't accounting for the actual costs internally, that's their problem.

If the government wants to control the telephone infrastructure to this extent they should have to own it, and they don't.

They do support it quite a bit, however. Why don't you see if you can start up a phone company and run some copper parallel to SBC's in your neighborhood. SBC will sue your ass out of existence (based on their protected status) so fast it'll make your head spin. Similarly, start up a company that runs electric lines parallel to your Electric company's or cable lines parallel to your cable company's. Utilities are protected monopolies.

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.

It's not less than the cost of the line.

Fuck 'em. Break 'em up again. Do not allow the government subsidized and protected infrastructure company provide service. And don't regulate the service company. But don't protect them either. If the Bell service company pays $15/mo for a loop, then any company should be able to get a loop for $15/mo. And if the Bell service company pays $25/mo per sq. foot of CO space, then any company should be able to get CO space for $25/sq foot. Like I said, that's what the Telecom Act tried to do in a half-assed way. But the Bell's pockets are too deep. And now you'll have a choice to use you cable company's monopoly broadband with restrictive ToS or you local Bell's monopoly broadband with restrictive ToS.

-Craig

Charman vs Commisioners

[Orne]

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.

Say goodbye to inexpensive DSL...

[Anonymous Coward]

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.

there is a *small* upside

[FarmKing]

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.

Re:there is a *small* upside

[jmorse]

Yeah, for 3 times as much as it costs people now and with a lot more restrictions, crappy service, and "privacy" policies that let them monitor every move you make and then sell that data to every spammer in sight. Don't blame the line sharing requirement for your woes: blame the RBOC.

Re:Solutions

[loucura!]

Perhaps because the Bell's infrastructure was paid for by the public, not by the Bells?

Nationalize!

[Anonymous Coward]

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.

Corrections to the Summary

[szquirrel]

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.

Re:No DSL and no Jolt make Homer somthing, somthin

[rindeee]

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.

Bigger problems with DSL

[fishbowl]

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.