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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.
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.
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!
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.
Perhaps because the Bell's infrastructure was paid for by the public, not by the Bells?
Black and grey are both shades of white.
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.
ATTBI is raising it's prices because it's no longer AT&T, it's now Comcast. I had comcast where I used to live, get ready for worse service for more money....
Blessed are the pessimists, for they have made backups.
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.
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.
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.
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?