SBC Hit with Antitrust Lawsuit

mrtaco01 writes "Four Internet service providers have filed an antitrust suit against SBC Communications, alleging that the Baby Bell unfairly inflated wholesale prices for high-speed Internet access."

Comments

This will lead to lower broadband pricing?

[MtViewGuy]

I think this case could have a big precedent if the plantiffs win.

It could mean that your installed DSL line could have several different choices of ISP's instead of just the ISP officially supported by the telephone company, which will lead to price competition and eventually monthly pricing more akin to dial-up pricing (e.g., US$20 to US$22 per month unlimited access).

I'm happy with it.

[Creepy Crawler]

We lived about 15000 ft from the CO, and we wanted DSL. We called them, and instead of saying "GFY", they said they'd look into it and call back.

One day later, they said we could get it. Turns out, we were the first, i repeat, FIRST in that whole area for DSL. They installed a DSLAM and got rid of 2 load coils on the lines. All that for a piddly 30$ a month for a 1 year contract.

I'm usually against inflation praticies, but the cost has to come from somewhere if they're going to solve the last mile problem.

Yes, I live 8 miles away from the local city, and there's a CO near there serving OC-3 to local companies.

This is crap

[Sumbody]

I live in Chicago, prime SBC territory where SBC (nee Ameritech) is fighting for higher wholesale prices for all resellers of their connectivity and dialtone, claiming they (SBC) can't compete. My home is served by an ISP out of Seattle, who finds it profitable enough to offer me great prices on a twice-resold DSL (SBC ==> Covad ==> Speakeasy.net) and a 1-year contract almost up. These other ISPs are crybabies, or trying to enter SBC markets too late to compete. Fire their MBAs and hire some that have a better penchant for marketing and planning.

SBC in Illinois...

[BJZQ8]

SBC/Ameritech in Illinois recently was granted a huge rate increase by the State. This is on rates charged to other phone companies for their lines. Strangely enough they DID shortly thereafter announce new DSL service to some relatively rural areas...but then again, we have not gotten any closer to real competition yet.

Telecommunications Act of 1996

[b1t r0t]

I worked as a contractor at SBC for a short time a couple of years ago, and at one point they had some sort of explanatory session about the Act, and what certain non-compete rules meant for sharing information between different divisions of SBC. The one thing that I found interesting about this was that their requirement to share DSL lines with CLECs was not due to TAo96. It was actually a condition of the Ameritech merger that allowed them to sell long distance service in that area.

That having been said, from the viewpoint of a customer getting DSL from a 3rd party ISP back then, I wasn't too impressed with this, primarily because it caused the formation of ASI (which I think stands for "Advanced Systems Inc.") ASI was the ILEC holding company formed to handle the DSL circuits themselves, and its creation caused a severe increase in the delay of DSL installation, and these delays went on for at least a year.

The second issue I was aware of back then was exactly what these ISPs are complaining about. At some point SBC decided that the resale price for a DSL line to ISPs would be (surprise!) exactly the same as what they charged individual customers for basic DSL (with ISP) service at the same speed.

My ISP wasn't too happy about this, but they really died because they got "hosed" after they were bought out by a CLEC. Another ISP in the area, TexasNet, wasn't too happy about it either, but didn't get rid of DSL until SBC decided that it would remove one mode of billing, I think the one that let SBC pass the charges through to the ISP (the other being having the charges go onto the customer's phone bill).

These days I get my DSL through SBC, fast and reliable but expensive (6Mbit), thanks to being near a Remote Terminal. I depend on them for nothing but a pipe, and have made a point of ignoring their stupid SBC/Yahoo nonsense. In fact, the only ISP service I can't and don't do myself is NNTP.

Re:How is this illegal?

[ekidder]

In many (most?) cases, SBC is reselling their lines at a loss, considering that they are still the ones that have to maintain the line. The states have a pretty strict control over how much SBC can charge for lines (being the ILEC and all) and most states have kept that at a low rate. (Illinois is about $16, I think). SBC would probably be happier with it if the ISPs were also paying to have the lines maintained.

Re:How is this illegal?

[wulfhere]

I work at an ISP that resells SBC DSL. The problem is, we are paying $34.95 for each DSL line to a customer. SBC is turning around and selling DSL for $29.95.

As if this weren't bad enough, we have documented cases (but not enough money for a lawyer, yet...) of our customers being contacted to switch a week after they turn up with us. You see, we have to enter customer info into SBC's database to place the order.

And speaking of SBC's database, did you know that it returns different copper distances for SBC vs. the ISP? We have had customers whose loop was not qualified for service be contacted by SBC a couple weeks later and be able to get service.

All the telco's abuse their power, but SBC is one of the worst.

Re:Do you know what wholesale rates are?

[wawannem]

Well, you shouldn't have mentioned that you are a former telcom employee. You lost a lot of credibility with that statement.

First off, I want to clear up a few things about equipment costs that telcoms hide behind. They use this as their way to jack up the rates, because after salary and wage expenses, they really don't have much reason to charge a monthly fee to their customers, so they claim to be constantly upgrading their equipment. The telcoms are sneaky though, equipment works its way from the largest areas down to the rural areas so that they are re-using the same equipment where it is needed, and everyone gets an upgrade. Sounds good right!?
WRONG

The trick is how it goes from one CO to another. Each CO liquidates its old equipment to a holding company for pennies on the dollar. The holding company is usually a seperate entity whose main stakeholders are executives at the telco. The holding company then offers the equipment back to the next CO for its *original* price!!! Think of how much money is generated when just one upgrade works its way through the COs in an area. The telco has had to re-purchase the same equipment over and over again, so then they go to the local PUCO (public utilities commission) and ask if they can raise the price since the upgrade cost so much. When they get it approved it is a double win for them, they are getting more from their residual monthly fee, and they have made an ass-load of cash from their holding company entity.

For Public Utilities, it is all about how to work funny-money through the system, they don't have to worry about pleasing the customer since their is no competition. If you really think that your local telco is out to please/help you, then I have a bridge in Brooklyn I'll sell ya ;).