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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.
It's times like this I thank GOD I'm a a secret agent man.
Erm, I mean, a Canadian.
I'll start dusting more places on the bench off
for the inevitable flood of layed off tech
workers.
The most important thing any republican needs to know.
Bottom line is if they do this they'll have a Jolt crazed tech geek attacking their office with a Nerf(tm) crotch bat. I need my Speakeasy DSL service.
"Have you ever thought about just turning off the TV, sitting down with your kids, and hitting them?"
It is all done over the phonelines, but there many many DSL companies competing (although only a few get mainstream attention). The competition gives the 'hardcore' internet users much choice, but in the end the DSL network is all owned by BT.
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.
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.
Then fuck the FCC! I hereby call upon all slashdotters to boycott those worthless...wait a minute...oh shit...
--
"God is a comedian playing to an audience too afraid to laugh." -Voltaire
Perhaps because the Bell's infrastructure was paid for by the public, not by the Bells?
Black and grey are both shades of white.
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
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
Yes I work for a Non-Bell ILEC and frankly why should "my" infrastructure be used for someone elses profit. I wouldn't like it if Bell tried to bully their way into one of our markets, why should I be allowed to steal from them.
Yeah, the problem is though that the government subsidized the creation of Bell's infrastructure in the first place.
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)
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.
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.
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.
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.
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.
The point you're missing is that the Bells, unlike say McDonald's being forced to let Burger King use their extra grills, have a monopoly in the last-mile telecom arena. What's more, it's a government-sponsored monopoly. That means that the Bells have, as a condition of their monopoly, certain restrictions and responsiblities that other industries don't.
The Bells can stifle any sort of telecom competition simply because they DO control the wires going into your house. Thus, the only way to ensure any sort of telecom competition is to force the Bells, as a condition of their maintaining their utility/monopoly status, to open their networks to competitors at reasonable prices.
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.
When it comes to essential public amenities, you cannot allow monopolies to stamp their and say "It's my ball, you can't play with it!"
Modest doubt is called the beacon of the wise. - William Shakespeare
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.
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.
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.
Requiring companies to lease their lines at cost is *REGULATION*, not deregulation.
Deregulation is letting those who own their lines lease them at the prices they want to, or not at all. See any regulations there?
Exactly.
Best example is the California power system "deregulation" that caused all those blackouts - what was billed as "deregulation" wasn't deregulation at all - just a different set of regulations that turned out to be much, much worse than the old set.
Point of the matter is you should not trust anyone's opinion on what deregulation will do if they do not even know what deregulation is in the first place.
paintball
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!
As if your company PAYED for the bloody lines in the first place !!!!!! NO I THINK NOT. They got HUGE government subsidies, and enormous amounts of tax dollars in the way of "recovery" surcharges, not to mention the government arranged, read forced the right of ways needed using emminent domain, and THEN PAYED for the Fair Market Value of the access property. All the Bells have EVER HAD to do was maintain the lines and grow FAT on the profit, and they can't even do that.
"I mean hell if they were allowed to sell DSL AT COST you people would still throw a shit fit because DSL lines ARE EXPENSIVE!"
NOT, they are just bloody existing copper lines. If a responsible entity had DONE ANY sort of decent upkeep over the last 40 years, there would be no issue, but instead they sucked up the profit, blew it on useless expansions in areas that were NOT their field, now they want us to pay for their mistakes...I say we nationalize the infrastructure, it is after all a BUSINESS REQUIRMENT these days, and then appoint someone to operate it and let the bells become tenants just like everyone else.
Note, I don't mean this as a personal attack, it just sounds like you are leaping to the defense of your employer....Archfeld
errr....umm...*whooosh* *whoosh* Is this thing on ?
It wasn't government granted monopoly either. Bell & AT&T existed because they were the biggest, and existed long before anti-trust laws.
That's partly right. But the AC had the bulk of it right, too.
Early in the history of telephony -when it was still local - there was competition. And the competing companies refused to interconnect and complete each other's calls. (In particular, Bell, the big gorilla, refused.) So businesses (like hotels, banks, legal firms, newspapers, telegraph offices, and cab companies) had to have phones from two or three companies to be sure all their customers could get to them.
Bell used their own reluctance to aid the competition to convince the government that telephony was a "natural monopoly" and thus needed to be regulated. (At the time gas and water distribution were considered to be "natural monopolies" because it would cost N times as much to install pipes for N companies, so supposedly a monopoly under price regulation could deliver the service for less than the cost of multiple copies of the infrastructure.)
So the regulators set up a system where "franchises" - regional monopolies - were given to various companies. Of course where a local phone company already existed it got the franchise, and where multiple companies existed the big guy typically got it and the little guys had to sell him their equipment (or trade it for equipment in a less-lucrative market they also shared).
If I recall correctly, Bell was the big gorilla at the time because it had had selective access to Bell's patents, another government monopoly. (Bell made it to the patent office a half hour ahead of another inventer with a virtually identical device.) So in the early days Bell had the best equipment and others had to work-around, and once the patents expired Bell was the big kid on the block.
Under regulation the prices were set at levels that guaranteed Bell about a 6% return on investment - and whenever it dropped below that they could petition for and receive a price hike.
(Bell Labs actually existed to spend as much money as possible on research vuagely connected with telephony, because for every dollar spent there Bell could bill customers $1.06. It was the biggest failure of the system, because basic research pays off big. Virtually from the start they made more money licensing Bell Labs inventions than the lab cost.)
As long distance became possible, Bell (who had by then bought out most of the little guys, except for some rural co-ops and small towns wired by the likes of General Telephone) became the regulated monopoly for interconnecting the cities.
Bell continued to be a government-mandated monopoly until a series of court decisions.
First the Carterphone decision led to the "foreign attachments" tariff - and you could stop renting a phone built by Western Electric (Bell's manufacturing subsidary) and hook up one bought from an independent manufacturer. Phones went from a paper cost of hundreds of bux to cheap disposables over a few years.
Then Microwave Communications Inc. (MCI) took advantage of that tariff and inflated long distance charges by setting up their own inter-city microwave hops, renting local lines, and bypassing Bell. Bell sued, MCI counter-sued for antitrust, and the fallout was that not only was MCI (and others) allowed to continue, but Bell was required to let them hook up on the same basis as Bell's own long-distance operation. And to keep Bell from playing accounting games to subsidize unregulated long distance from monopoly local bills, Bell was split up into AT&T (long distance), Lucent (Western Electric & Bell Labs), and a handfull of "Baby Bell" RBOCs (Regional Bell Operating Companies) to continue the monopoly local/short-range long distance service.
Meanwhile, virtually all the local copper was installed by Bell Telephone or the Baby Bells while they were regulated monopolies, with government-mandated monopoly pricing for their service subsidizing the cost. A new competitor in a deregulated local phone business would have to wire a whole city and then pay for it with money made while charging less than the established RBOC, which is sitting on paid-for subsidized copper and can cut prices to the bone. Can't be done.
Eventually the RBOCs were allowed back into the long distance business - at a price. They had to provide DSL service and rent their local copper to upstart competitors at a wholesale price. It seemed like a good idea at the time, because the long-distance service was where the money was. Players there were mostly AT&T, MCI, and SPRINT. (The Southern Pacific Railroad had strung fiber along their right-of-way for their own communication. Fiber has a LOT of bandwidth, so they rented out the surplus bandwidth by becoming a long-distance phone and long-haul data carrier.)
But about the time that deal was cut, several upstart long-distance companies completed THEIR long-haul fiber loops, and the price war started. Suddenly the Baby Bells had no revenue from the shiny new long-distance operations. So they started dragging their feet on the DSL deployment. As for installing more copper to expand their own service and rent to their competitors, it no longer makes ANY sense with the only revenue coming form local service. So they won't do it until the ruling is reversed.
Meanwhile the competitive local phone carriers never really materialized (except for the cable operators, who also had existing copper installed). And the little DSL ISPs - except Covad which re-organized out of bankruptcy, dumping ITS startup costs - are pretty much dead, from their own price war (and from the local Bells' tendency to raise their service costs by screwing up their local copper). So from the regulators' point of view the competitive market they're trying to protect hasn't, and won't appear. Thus the release of the Baby Bells from the wholesale price controls, in the hope they'll start installing more cable.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way