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."

Comments

First Google link

[gpinzone]

FGL!

http://www.nytimes.com/2003/02/27/business/27FCC.h tml?ex=1046926800&en=669a995afe95f3f3&ei=5062&part ner=GOOGLE

Gotta love this

[TopShelf]

A number of congressmen were overtly hostile on this point, including Representative Billy Tauzin, the Louisiana Republican who is the chairman of the House Committee on Energy and Commerce. Mr. Tauzin was critical of the regulatory role of the states. He argued that the ruling would result in 51 local procedures with 51 lawsuits and 12 different appeals courts, "ending up at the Supreme Court that ordered the deregulation in the first place."

But in a letter sent to Mr. Powell in June 2002, Mr. Tauzin himself wrote: "The commission must evaluate the rationale for requiring the unbundling of a network element based upon specific geographic and class-of-customer characteristics of individual markets across the nation. Uniform, national rules do not accurately reflect the state of competition and the unique economic characteristics of individual markets."

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!

RTFA, and RTF links in the blurb

[boarder]

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.

Re:When will we(they?) learn

[Ryan Amos]

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.

Seidenberg, Barr Comment on FCC Ruling

[Dave21212]

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."