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Baby Bells Promise Broadband Stagnation
twitter writes "According to this NYT article the Baby Bells will not be developing their 'high-speed networks' despite their recently granted DSL monopoly because they were not granted local phone monopolies. 'Here is a lot of crying crybaby reaction to the decision.' says Mr. Powell."
FGL!
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http://www.nytimes.com/2003/02/27/business/27FCC.
Gotta love the flip-flop action from Tauzin. It's not just the lawyers who'll get rich from these protracted legal battles - by tying this process up in Washington for years on end, the incumbents assure themselves lots of attention (and donations) from the parties on both sides of the issue. I have a feeling that we'll be hearing about this issue for only, say, another decade or so at this rate!
Stop by my site where I write about ERP systems & more
Infact only the baby bells have the right to dig under streets and lie cable according to government regulation. This is what pisses off alot of clecs and other dsl companies. They claim other dsl companies should lay their own cable and not complain to us or the government. In reality if they did this companies like sbc would sue their ass to prevent it.
Its their way or the highway.
I view what is going on in deregulation of the telecom industry is similiar to what the oil companies wanted in California. To rip off customers.
In Japan you can get 100mbs for like 20 a month and even have your own server! Its the phone companies who want to limit supply to increase demand from corporate customers. They do not like high speed access because they can not sell as many t1 and t3 lines for thousands a month. Only the fat cats should have high bandwith at an outrageous cost to increase profits is what the bells want.
http://saveie6.com/
Privatizing things works very well, especially communications; the government just needs tighter controls over the privatized industry. Here in Canada we have just that. First there's the Telephone Pole Act, basically it states that all telephone poles must be leasable by any communication provider, regardless of competition to Ma Bell. That alone has created a booming cable industry since pole costs were covered. It further helped expand communications infrastructure as Telus, and others were able to reasonably enter the market. Beyond that we have the mandated position of extending broadband to every canadian by 2005 (I think it is). With regulations like this the government is both driving innovation and allowing for meaningful privatization. Ah, the joys of Canada.
Dude, before you post something, maybe you should have some insight into what you are posting...
First, last week the FCC took away linesharing for broadband (but kept it in place for telephone service). So your argument that they have no incentive to roll out more DSL capacity is crap... In order for a company to lease DSL space NOW is for them to also offer phone service. The point of the post is that the Bells are pissed that the FCC didn't take away linesharing completely. Since they didn't get their way completely, they are going to balk on the promises they made when lobbying for the FCC to take action.
Second, your argument that other people lay their own cable is both not possible and ridiculous. It is ILLEGAL for a company to just lay fibre... The government has granted this monopoly to the phone company (try to dig for a line and see what your local telco says about it). Laying your own cable like the cable companies is ridiculously expensive (note that my father still can't get cable to his house because it's not economically reasonable for the cable co... but he can get phone service fine). It is also not smart... we already have three sets of wires to each living space (phone, cable, electricity), why lay a third or a fourth for competing internet providers?
Third, they aren't losing money to their competition. They leased the line to the CLEC at exactly the same cost as they lease it to their own DSL subsidiary. Not only that, but the CLECs have their own equipment and enormous networks for DSL, they just need access to the last mile.
The more they built before the FCC took away linesharing for broadband, the more money they made (linesharers paid the same cost as the Bells to use the new lines); but they didn't make AS MUCH as they would without competition... Now they have no competition and are still balking at using the government granted power just so they can make even more money than they already do.
IANAL, but I play one on
Correction: A booming government-protected cable monopoly. To me, ascribing the term "industry" implies competition and there sure as hell isn't any cable competition Canada. There are 3 major cable companies, each has an exclusive geographic territory and each is a monopoly within that territory. 5 years ago, some small pocket territories were swapped to provide a more geographically consistent picture for these monopolies. Speaking as one who was swapped from the best of the 3 to the worst, I say that the system sucks.
Sigs are bad for your health.
Billing in a Telecom industry is alittle strange to start with. There is a set of Interchange agreements between the ILEC (bells) and the CLECs (various small phone companies) to provide those small companies lines at a lower rate. The theory was that by doing this it would promote a non-monopoly. The smaller companies then take up the rest of the costs associated with distributing and billing the end user. The goverment regulations are suppose to protect the smaller CLECs. What this court case did was basicly say that the ILECs are not required to share any new technologies that they have produced. They are throwing a fit in saying that by not allowing them to charge full pricing to the CLECs that they charge the rest of their customers. That they are lossing out on money they could have recieved from end users. The problem with this is that the overhead to run a business to make a competative market requires that those CLECs be sold to at a discounted rate. The ILEC basicly gets to use its existing infastructure to provide service to the CLECs with out having to do end user billing. And in the Telecom industry end user billing is expensive. Now, CLECs can get very creative on how they sell their lines in order to make maximum profit. An example is the company I work for in florida sells only to businesses. And only if those businesses need multiple lines. Say, the cost of each POTs (plain old telephone) line is 15.50 each and the cost of a T-1 is 69.00. If the customer wants 10 lines for their business it is alot better business wise for us to run a T-1 to their business and break those 12 channels into voice of T-1 lines. We will still charge the customer about 20.00 a line but make a pretty healthy profit. A person might ask why CLECs don't just use the existing infastructure to sells direct to customers. All ILECs own the last mile to the end users home or business. There was a set of regulations that granted out the current infastucture to them. To build out to those places would require that those CLECs get right of way permits to lay more phonelines. That isn't going to happen.
Bandwidth is most assuredly not free. Industrial strength routers and packet switching equipment cost lots of money (we're talking several million for an installation needed for a central hub.) They have to pay people to run the datacenters, do line repair, keep things secure, make sure the routes are running smoothly, etc. Now I'm sure that there's some padding added on top of this, because the line provider probably wants to make some money, but rest assured that bandwidth is not free.
Here's what Verizon had to say... From an email, and from their website
Please respond to Employee Communication/EMPL/NY/Bell-Atl@VZNotes
To: All Employees
cc:
Subject: Seidenberg, Barr Comment on FCC Ruling
CEO Ivan Seidenberg and Executive Vice President and General Counsel Bill Barr provided additional public comment Monday regarding last week's controversial FCC rulings on telecom competition.
Speaking at a Merrill Lynch analysts' conference, Seidenberg said Verizon will take legal action against the FCC ruling, declaring that the Commission's policies are legally flawed and fail as a means of creating sustainable competition in the industry.
Verizon had hoped for regulatory relief from having to provide deep discounts to competitors for network elements, also known as UNE-P. The FCC ruled instead that the decision would be left up to each individual state and the District of Columbia, through the jurisdiction's public service commission.
"You cannot take a national market like this and have 51 jurisdictions make a study and come up with any pattern that will drive consistency in the industry," Seidenberg said.
Seidenberg predicted that the FCC - as it has twice before - would lose again when the courts ultimately rule on the new policies.
"Our view is that (UNE Interconnection)...would eventually die anyway," Seidenberg said. "Because in the long term, technology would displace the bootstrapping of other people connecting to our network."
Seidenberg said that the FCC's ruling theoretically left some upside potential for Verizon in broadband markets, but added that the company needs to see the written order before assessing the practical impacts in this area. For example, the FCC's press release indicates that phone companies "may not retire any copper loops...without first receiving approval from the relevant state commission."
Barr further addressed the broadband issue in a statement to the media. He said that while the language in the ruling is unclear, if the intent is to give the states a veto over whether we can replace obsolete copper facilities as we install broadband facilities, then "the FCC will have done precious little to deregulate broadband."
Barr said that with such a veto, regulators could require that local phone companies deploying broadband facilities maintain two parallel networks, burdening new investment with massive additional costs. Likewise, regulators could impose onerous rules on new broadband facilities in return for their consent to retire the old.
"Either way, such an approach does not give phone companies any assurance that their opportunity to earn a return on massive and risky investments in broadband will not be thwarted by regulators," Barr said. "Unless this issue is clarified in the Commission's upcoming order, the FCC's effort to free broadband from regulation will be illusory."
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