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

How is this illegal?

[mandalayx]

The suit, filed Thursday in the U.S. District Court for Central California, claims that the rate SBC charged the companies for digital subscriber line (DSL) service was too expensive for them to resell profitably. Linkline Communications, Inreach Internet, Om Networks and Red Shift Internet Services are seeking $40 million in damages and a discontinuation of alleged "price squeezing" from SBC, according to the court filing.

Attorneys for the California ISPs say San Antonio-based SBC must discontinue its pricing system in order to give smaller companies a chance to compete for DSL subscribers.

Looking at the way the article was written, I get the impression that some ISPs are suing SBC for providing a service which was hard to resell at a higher price.

In other industries, this is known as not having a good business plan. I'm unaware of how this is illegal and wanting clarity on this issue..

Re:How is this illegal?

[banzai51]

The problem is that SBC owns the lines going to your house. SBC also sells DSL access. So they open it up to everyone like they are legally supposed to, but then start jacking up the prices so all the other DSL businesses go under. This leaves SBC as the only DSL provider in your area. Prices and restrictions on users go up. Not good for the public that has to pay more money for less service. This type of behavior crowds out good ISPs like Speakeasy.

Re:How is this illegal?

[Anonymous Coward]

This is also known as 'bait and switch'...

What you aren't reading is that SBC conned all these ISPs into jumping on the DSL bandwagon, and signing up thousands of DSL subscribers...

After they did all the leg work, SBC then lowered the price they offer the public. Hence making it too expensive for the ISPs to compete with SBC (since they still are paying the old rate, they actually pay MORE for 'wholesale' DSL access then SBC is selling to the public for)

Part of the problem with DSL is that the OWNER of the copper last mile has all the advantage. Even though you may be buying DSL Internet from any one of a half dozen ISPs, they ALL rely on SBC to get that last mile. Hence, they have a monopoly.

The courts allowed them have this monopoly, on the understanding that access was fairly given to competitors to 'resell' those facilities at a fair price.

Droping your retail price below your wholesale price doesn't seem very fair, and since it was the FCC that mandated this (ie, they made it a law), that is why it is ilegal.

Re:How is this illegal?

[panda]

In other industries, this is known as not having a good business plan. I'm unaware of how this is illegal and wanting clarity on this issue..

It's because ISPs and phone companies operate in a regulated market, and not a free market. Telcos are pretty much required (for the moment) to offer wholesale access to their lines to competitors at a rate that is fair because the telcos usually have a monopoly on the lines in a given geographical area. This was all spelled out in the Communications Reform Act of 1996 in the USA. It is up to the regulators and the courts to determine what is fair pricing, and these things are usually determined by lawsuits such as this.

Re:How is this illegal?

[mblase]

In other industries, this is known as not having a good business plan.

Actually, in other industries, this is known as falling victim to a monopoly. That's why it's illegal.

Re:How is this illegal?

[rusty0101]

It's also known as leveraging a monopoly to expand it.

But since Microsoft effectively gets off scott free for doing this, SBC has probably decided they can probably get away with it too. Unfortunately, as noted elsewhere, SBC is in a regulated market, and Microsoft is not. This may be an interesting case to watch.

Re:How is this illegal?

[jchawk]

That and keep in mind that Bell was originally granted a monopoly on the phone system and it's building was subsidized by your tax dollars.

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:How is this illegal?

[wawannem]

This isn't bait and switch... That is when you advertise one thing at a great deal, but then conveniently don't have any of that item in stock when the customers arrive. This was a common practice of Sun TV during the 90s.

Sometimes I wonder why this 'Anonymous Coward' guy is still allowed to post, he is obviously an idiot, and he posts so much!

Re:How is this illegal?

[Krow10]

Blockquoth the poster:

How is speakeasy a good DSL provider ?

Speakeasy is a good provider because they offer a reasonable terms of service without charging "Business Class" prices. Most ISP's charge more for their business class, not because of the terms of service, but because of the Quality of Service requirements. Speakeasy's QoS for their SysAdmin offering is the same as BellSouth's home user, so they don't charge an arm & a leg for it.

Those people will only sell me SDSL at 119.99$ month where as bellsouth provides ADSL for just 49.99$.

Oddly, I had the same thing in my case. I tried to order from Speakeasy when I moved into my new house, but Verizon couldn't find a loop that would do anything but SDSL. I went with cable for a while. Then I get an offer from Verizon -- three months free ADSL. I order it, and like magic, they find my original loop can do ADSL (yes, maybe there were changes upstream. And maybe they just didn't try when I wasn't ordering from their service provider.) I get good xfer rates. I log my rates over two months and then I order Speakeasy. Since I now have proof that my loop can support ADSL, Verizon has no choice. So, I pay $15/mo more for my service, but I have a sane terms of service.

Just because those people advt run your ownserver doesn't make them good.

Not everyone wants that. I do. I'm willing to pay a little more for that than for standard connectivity, but there's no good reason I should have to pay Business Class prices for it. Speakeasy is the only provider who offers this in my area. When someone offers a service that you want, for a price you are willing to pay, and nobody else offers the same, that does make them good.

-Craig

Re:How is this illegal?

[kin_korn_karn]

This all means that they're not a monopoly on the consumer market anymore, but they ARE a monopoly on the commodity bandwidth market. If you want to be a CLEC, you buy your lines from SBC, period.

Oh, I suppose you could go through the decades-long process of running your own copper, but the government has determined that it isn't realistic to expect a new company to be able to do that and remain in the market, so SBC is obligated to sell bandwidth as a commodity, a raw material if you will, to the CLECs.

Lasseiz-faire capitalists find any government definition of or intervention in markets appalling, but then they'd turn around and bitch if SBC were the only DSL provider in the area and charged $100 a month, too.

Sometimes the government helps you, turn off the talk radio and get a clue.

Re:How is this illegal?

[Fastolfe]

Agreed, but there are other issues here: a lot of the lines were run with government subsidies. Bell didn't pony up all of the original expense. So anyone trying to run competing lines would have to bear the entire expense of doing so, which is more than Bell had to do (in some cases), which also makes it prohibitively expensive.

So in order to break the monopoly, you have to force Bell to let others sell service over their lines. It's ugly and frustrating for companies like SBC, but it's what the government chose to do.

Now, if it were up to me, I'd sell those physical lines to the government, or spin off a company that is there simply to run and maintain those lines. This would be more or less like any other public utility. Then, companies wanting to put services on those lines (including the original Bells) would have to pay fairly to use them. None of this government price fixing crap.

Re:How is this illegal?

[Sylver Dragon]

Ya, he missed on the name. Its called Predatory Pricing, and it tends to get companies in trouble. Especially when that company has a monopoly. Wrong name or not though, he has a point. If a company has a monopoly and then uses that position to drive out all competition by lowering prices below their cost, this is a bad thing, and illegal.

Re:How is this illegal?

[Telastyn]

How about because they allow you to do whatever you want? [in addition to above poster]

At least in this area, SBC does not allow "odd" protocols such as GRE [required for PPTP connections] and in certain locations they won't even let you connect to an smtp server that isn't theirs.

Furthermore, in my experience with PacBell [before the SBC buyout] and SpeakEasy at the same location and same service [1.5/384 adsl] I found that SpeakEasy provided a much better service. Much less downtime, none of which was unannounced. Much better average response time to the internet, especially to the west coast [PacBell routed everything through SF and then back down the peninsula again...] And much better bandwidth on average.

Reliability: better.
Customer Service: WAY better.
Speed: better.
Bandwidth: better.

I mean what other metrics do you want?

Re:How is this illegal?

[jtosburn]

A DSL line is, by definition, also a plain old telephone line. Is it's maintenance fundamentally different than if it where just your average, everyday phone line? If not, then as long as someone has an SBC landline (ie. 95% of the population in SBC territory), then they already ARE paying for line maintenace.

And the idea that SBC is selling DSL lines at a loss is dubious at best. The R&D to develop DSL was paid for in the late eighties / early nineties via special permission from congress to raise telephone service rates in order to develop interactive television, and in fact, they had promised to deliver it to some large percentage of the population, so you could also argue that a certain amount of field equipment and upgrades has already been paid for, too. The installation of lines was paid for a hell of a long time ago. And the upgrades to digital switches has been mostly in order to save them money as demand increases; the benefit for DSL is ancillary, and thus those switches are also already paid for by telephone subscribers.

The DSL reseller is presumably providing the DSLAM, so where exactly is SBC's loss? Is it like one those studies IBM did way back when that determined that it would cost them $40 to develop and ship an empty box?

A company with a monopoly can only think in monopoly terms. The idea of competition is alien, and unwanted, and the longer a company was had a monopoly, the more ingrained those ideas are.

Re:How is this illegal?

[BrynM]

Linkline Communications, Inreach Internet, Om Networks and Red Shift Internet Services are seeking $40 million in damages

Speakeasy is a good provider because they offer a reasonable terms of service without charging "Business Class" prices.

I happen to be a customer of one of the litigants, Om Networks (known to me as Omsoft - the article got the name wrong). Before Omsoft, I was an SBC customer. Like some Speakeasy customers, I went with Omsoft for the business class service at regular rates as well (I have web and e-mail on a static IP). Not only did they offer better customer service than SBC (they are local and I can even go to their offices if I had to) and a Static IP address, but they seem to know how to run a company. SBC made me feel like I was inconveniencing them by being their customer. Every time I had to call SBC (they screwed up the PBX a couple of times), they had this "We wish you wouldn't call us unless we told you to buy something" attitude. It seems SBC doesn't have to care because they will get some of my money whether I like it or not.

Omsoft service is a remarkable contrast to SBC and in my opinion worth every penny - even with the SBC price gouge. I got an error from their proxy server and sent an e-mail requesting removal from the proxy. Guess what? They did it and replied to me the same day. Link problems? I just give them a call and we troubleshoot it together - which brings up another point: They don't treat me like an idiot. Run your own server? Omsoft encourages it and sees it as a way for their customers to learn technology. It's like having a local "mom and pop" ISP again. I value Omsoft and would be pretty disturbed if SBC ran them out of business with price gouging tactics. I think I'll give my ISP a call tonight to congradulate and encourage them.

Re:How is this illegal?

[gilleyj]

Same thing with Covad and their resellers. I work for a little ISP out in the middle of no wheres california. We tried reselling covad DSL but the pricing for US was 30 dollars more a line then what Covad themselves were offering the lines. What goes through customer minds... "Why should I pay you 100 a month when it only costs me 70 a month directly with covad?" The other big issue is when you resell for covad, YOU are responsible for tech support, they will not talk to end customers only to the reseller. SO when a line goes down, customer calls us, then we have to call covad. doesn't sound too bad execpt you end up being on hold for 1-2 hours with covad. The other really buggy thing is they wont even talk to you unless you are on site. so all and all it is totally not worth it to resell DSL at a gain of 30 a month when they are underselling you at the same time.

not sure if this is what sbc is doing but I really would not be surprised.

Re:How is this illegal?

[Crazy Eight]

as long as someone has an SBC landline (ie. 95% of the population in SBC territory), then they already ARE paying for line maintenace.

IIRC, back when I was still comparing DSL providers I heard that one can't get DSL in SBC territory from anyone without having an SBC landline account. Even though I'd just as soon ditch my home number entirely I can't without SBC blocking the line. There's no technical reason for this to be so. Speakeasy does after all pay SBC's rent after I've paid Speakeasy.

Less Time For Other Suits

[ThatDamnMurphyGuy]

Good. This will mean they should have less time for suing people using frames in websites, erm, I mean "Structured Document Viewer".

It's all moot anyway

[TerryAtWork]

We're moving to high speed wireless and ISPs will go away.

Almost.

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).

Re:This will lead to lower broadband pricing?

[Jade E. 2]

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 don't know about SBC's area, but for anyone else stuck in Qwest's area (I feel for you, really) you can already pick from multiple ISPs. Qwest has their ISP list so you can see who's available. I have unlimited 640k/256k access for $19.95 a month from these guys.

Re:This will lead to lower broadband pricing?

[gwydi0n]

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

First of all, this is already the case. In my last apartment, I had dsl, and when I was shopping around, I must've browsed through twenty different ISP's. I originally tried to go with Speakeasy, which was just getting rolling, but as they didn't have a Chicago POP at the time, and I'm in Michigan... It caused a few problems having my gateway in Seattle. (minimum ping to anywhere of 150) In the end I went with Telocity, which later became DirectTV DSL, and was quite happy with the service. I had 1 Mbit down and 384 Kbit up; enough to run simple services such as my webserver, an ftp server, and ssh.

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)

Secondly, this is highly unlikely, at least not anytime soon. I would guess (and it is just a guess, IMHO, disclaimer, etc, etc.) that most DSL ISP's are already operating at a loss, and still paying for the infrastructure they had to setup. Until that overhead goes away for the company, they can't in good faith to their shareholders drop their prices. As it is, I don't feel broadband prices are too out of line; I paid $55/mo for that dsl connection, and $60/mo for my cable right now. While this may be a bit much for casual users, I definitely get my money's worth.

Re:This will lead to lower broadband pricing?

[Anonymous Coward]

Would you folks stop calling it a DSL Line?

Examples of proper use: I have DSL; They want a Digital Subscriber Line; etc.

While you're at it can you cut out calling ATMs "ATM Machines" and PINs "PIN Numbers"?

Thank you,
Drive Through

Only SBC?

[Anonymous Coward]

Is this not to say that other independent ISP's shouldn't follow suit and file against Verizon who does the very same thing? I ended up paying over $80/mo. just because of Verizon's ability to "make the line DSL ready" at $42.00 a month. What a joke!

Competition

[marekk]

I for one would love to see more 3rd party DSL operators/licensees in my area. A year ago, with SBC the only DSL company in town, the price was $49.95/mo.

Just two months ago, with the addition of the first 3rd party DSL provider, SBC dropped their price to $29.95/mo (which I was able to sign up for).

Granted, this wasn't due solely to the entrance of this 3rd party, but also high competition between Time Warner, the local cable modem supplier. The dramatic decrease in the pricing though just goes to show how good competition is for the consumer.

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.

Re:SBC in Illinois...

[BJZQ8]

I want to say a bit about "Universal Service" fees. Most of this money doesn't go to poor people to have phones, it goes to a government-administered company. A huge amount of it goes to E-Rate, which is a huge fiasco. Billions are lining pockets for work that was never done, hardware that was never ordered, and services never provided. The forms are so complicated and contradictory that there are entire companies organized just to fill out the forms for people. It has grown into a massive entitlement program for the few in the computer industry lucky enough to get their number drawn. I work in a school, and the amount we could have gotten from E-Rate was dwarfed by the time it was going to take to fill out the forms and jump through their flaming hoops. I consider it to be a "Computer Industry Support Tax."

Do you know what wholesale rates are?

[GoodNicsTken]

I have to side with SBC on this one. As a former telcom employee, DSL prices were offered a cost to compete with cable. The recent price drops are due to reduced equipment costs.

I find it amazing that the wholesale rate on a T1 line is $50 a month! Customers still pay what $300-500? It's probably cheeper for some companies to set up shop as a CLEC just to buy resold lines for their business.

Competition is a good thing, but some of the regulations are a joke.

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 ;).

NYTimes Coverage

[AltismoMaster]

New York Times has coverage as well (free reg. bla bla)

http://www.nytimes.com/2003/07/25/technology/25DSL .html

More articles:
http://www.sfgate.com/cgi-bin/article.cgi?file=/ch ronicle/archive/2003/07/25/BU143220.DTL&type=busin ess
From which quotes: "... SBC's monthly wholesale fees were between $32.50 and $39 per subscriber. At that price, he said, his clients were unable to compete against SBC when the additional cost of Internet service and modems is factored in."

http://www.bayarea.com/mld/cctimes/business/638193 1.htm

http://www.sanmateocountytimes.com/Stories/0,1413, 87~11271~1532530,00.html

It's high time DSL prices fell so that I can get my $15/month - unlimited download - dedicated IP - T1!!! (then hook an 801 router and be peddling th e bandwidth to the neighbors... )

Value Added Services, not just re-selling

[Cade144]

For smaller ISPs to flourish they need to offer something the Big Boys (ie SBC & co) do not, perhaps better customer support, or some sort of Value Added Service. Competing on price alone will get you nowhere

ILECs (Incumbent Local Exchange Carriers) own the 'Last Mile' and other giants (Verio, Level3, etc) own the upstream pipes. Between paying for the upstream access and the co-location costs at the Central Office, I don't see how anyone even expected to compete with SBC and other ILECs in the DSL business.

SBC does not even make a profit on DSL, they just hope that over the long run they don't have to upgrade any more of their plant, and can continue to sell the same (slow) DSL service for $50 a month. Recurring revenue will let them break even in the long run.

Small ISPs should charge more, and offer more at the same time. Upstream firewall service, or anonymous file swapping, or extra good spam filtering or some sort of extra content available only to subscribers.

More is more. Smart consumers will pay more for expanded and better service.

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.

Antitrust will be the main avenue to competition

[isdnip]

SBC and the other incumbent telephone companies grew up with protected monopolies. They grumbled when the FCC's Carterfone ruling in 1969 forced them to allow "foreign" attachments of customer-owned equipment like telephone sets, PBXs, answering machines and modems. (Before that, you could only rent equipment from them. A 300-baud modem was $25/month.) They grumbled when long distance competition was authorized.

They would have grumbled when local telephone service competition was authorized in 1996, but they got, in return, permission to offer long distance service and "advanced" services such as Internet. So having gotten much in return, they're trying to weasel out of their half of the bargain. Powell's FCC has rolled back competition. They're making it next to impossible for CLECs to lease the high-frequency part of copper that's needed to offer consumer DSL service, and even cutting off some access to plain old full-price copper wire. So the CLECs like Covad won't be able to offer the ISPs a substitute for ILEC (SBC, VZ, etc.) DSL. Game! Powell also has a pending proposal that removes common carrier status from ILEC DSL, which is what this case is about -- SBC won't be required by federal regulation to offer raw DSL bit-pipe service to competitors of its Prodigy ISP service. Set! And even dial-up is coming under increased attack; many dial-up ISPs are becoming reclassified as toll calls, as the ILECs try to worm in a back-door "modem tax". It's happening -- I'm involved in some of these cases. Match!

So the independent ISPs are being squeezed hard. Under the old pre-1996 regulations, the ILECs were not subject to much antitrust review, because regulation controlled them. Now, they're being unshackled, but they still have their inherited monopolies on essential facilities -- that's a term of art in the antitrust business. They're blatantly using these monopolies (the copper loop) to leverage sales of what should be fully-competitive businesses (ISPs like Prodigy and VZ Online). That is certainly a red flag in antitrust.

Since the regulators (FCC) have stepped aside, relief will have to happen in the courts. A number of cases are pending now; this one looks to be particularly important. Its fate will help determine if the American public will have free access to the Internet, or whether we'll be stuck behind a corporate-administered Great Firewall of Bell, paying top dollar for limited choice.

And with an Internet in monopoly hands, the FCC's excuse for broadcast ownership deregulation (extreme concentration of ownership of the media) is proven a lie. But Powell hopes we don't notice.

SBC is exceptionally weak

[Unknown Kadath]

They have an (extremely sketchy) agreement with my apartment complex under which they are the only available phone service. This locks me out of both cheaper digital phone service from the local cable company, and also a neat little promotion where I would have been getting a substantial discount for ordering multiple services. I'm talking to managment, but no headway yet.

SBC DSL is also a ripoff--I wanted to get Speakeasy, but SBC won't share their lines. Hence, my cable modem will be delivered today or Monday.

A hearty >:p to SBC. I'd cut my landline and go entirely cellular but for reliable 911 service.

-Carolyn

Re: SBC is exceptionally weak

[Unknown Kadath]

And exactly how is this SBC's fault that you can't get the service you want.

Come on, you talk about your apartment complex not having a certain service (irrelevant, don't bitch to me)

SBC specifically negotiated an agreement whereby they block competing services, which are otherwise available in my area. This is both their fault and relevant.

Then don't buy it [SBC DSL].

I didn't. But you already knew that, from the rest of my post.

the lines belong to SBC. If they don't want to sell them to someone they don't have to. However, chances are it is because of financials. SBC said they wanted to charge so much and Speakeasy said no (again, not SBC's problem)

They do, in fact, have to sell them, because otherwise they run afoul of monopoly laws. SBC charges too much for use of their lines, again, blocking competition. This makes them a de facto monopoly, which is not simply a dull game with dice, real estate, and Get Out of Jail Free cards, but also an illegal market practice.

It is a load of duplicitous crap for SBC to say, "we offered our lines but they wouldn't pay" when SBC knows it is charging too much for any other company to turn a profit. It's analogous to offering someone a ride, but driving too fast for them to get in the car, then saying it's their fault they didn't run fast enough.

(It may also get SBC in trouble with the whole Common Carrier thing, but I don't want to look it up and you certainly don't care.)

In conclusion, if you can't even be arsed to sign your trolls, piss off.

-Carolyn

I hope God roasts their stomachs in HELL!

[pair-a-noyd]

SBC and their cronies screwed me for several years on DSL service, adding false charges, adding multiple accounts, EXTREME over charging, piss-poor service, etc..

Getting ass raped with sand, broken glass and a telephone pole would have been a more pleasent experiance than doing business with SBC.

I hope that they are utterly destroyed, that everyone that works there commits suicide and that their rotting corpses are dragged through the streets behind SBC service trucks..

SBC raped me over and over and over and they deserve every bad thing on the planet raining down upon their heads, a thousand times over what they did to me and may they all spend eternity in HELL with SATAN ass raping them with a 300hp chainsaw...

SBC at it for a while....

[bluesangria]

Notice those links at the bottom of the article?

Endless summer of DSL discounts July 7, 2003

FCC loosens broadband rules February 20, 2003

SBC unfair on high-speed Net, ISPs charge July 26, 2001

ISPs fight for more than DSL scraps June 26, 2001

ISPs allege Bell abuse in high-speed services October 27, 1999

Seems like ISP's have been fighting SBC's anti-competitive practices for years. IMHO, the biggest mistake the FCC made was in allowing the Bells to compete as ISP's. They should be barred from being ISP's so that the motivation for them to compete with their own customers (independent ISPs) is removed.

blue

Re:Finally...

[rusty0101]

DSL is one of two monopolies that can provide Broadband in populus areas. CableModem would be the alternative.

Both are still too expensive, but considering that the prices for each are regulated, you have to get the regulators to recognize that fact, and get them to force the prices down.

For rural areas, there is really only one method of getting anything like broadband service, and that is Sat service. Unfortunately there is a higher up front instalation cost, and monthly costs are at least as high as dsl or cable modems. On top of that the equipment uses a modified network stack that in most cases requires a Windows based PC to communicate. (Yes there are exceptions, especially if you are willing to spend a couple hundred more for the install.)

Now if you are willing to do a co-op with the rest of the people on your block, you could get a T1 or DS3 brought in, and use WiFi to share the connection with other people on the block. Personally I say good luck, but it might be feasable.

-Rusty

Look, it's very simple

[Rogerborg]

If you want genuine competition among suppliers of a service, you can't have one of the suppliers running the infrastructure that the service is supplied over. Public infrastructure should be owned by and run for the benefit of the public, not for the profit of one particular user of it.

Welcome to the Illinois State Toll Highway Authority, Now A Wholly Owned Subsiduary of Ford Motor Co. Inc. $2 Surcharge Per Axle for Non Ford Vehicles.

Would we tolerate that? Well, the Bell network is little different, it's just less blatant.

Happening to me now

[El Volio]

I'm moving into SBC territory next month, and the same situation exists here in Texas. Essentially, if I want to use another ISP, I have to pay that ISP a monthly fee and a separate line charge to SBC. But if I sign up with SBC, the combined line/ISP charge is the same as the line charge to go with someone else. So I can spend $30-$60 on the line charge and another $20-$40 to stay with my ISP, or just that $30-$60 to use their ISP. As much as I like my current provider, the financial incentive to switch is too great. But that still smacks of predatory pricing on the part of a monopoly.

SBC's not the only one that does this, of course. I work for another RBOC (though not in the telco or ISP areas) that does virtually the same thing. Evidently either my understanding of deregulation is flawed (the data services (DSL) unit must charge all ISPs the same, including their own) or the RBOC ISPs are really netting $0 after the line charges. Somehow I don't believe it's the latter.

Cable Companies Are Worse

[Anonymous Coward]

I work for an ISP. We provide dialup, webhosting, colocation and things along with wireless DSL.

SBC isn't as big of a problem as is RoadRunner. Giving all these things away free (i.e. installation) and undercutting us (and other ISPs in town). They've got thier own network that we can't buy into. They're also classified as a different type of "communications" company (with the cable t.v. aspect) and therefore don't have the same heap of taxes, regulations, and codes to follow.

Now, it's one thing to be able to offer your services for less than your competition, if you can do it, well, you've got the better business model. However, Time Warner can't seem to do it either, as they are writing off about 14 BILLION dollars in losses each year.

I'm not even going to get into the other uncouth things they do (as in sabotaging our wireless networks, etc).

bastards.

(phaeton sez)

backhoe lawsuit

[ForsakenRegex]

Someone should take them to court for failure to properly operate backhoes. I can't count the number of times they've cut major connectivity lines when they were trying to dig them up. On one day, they cut both of our upstream providers' pipes within an hour of each other. One was cut north of us and one was cut to the south.

Talk about denial of service.

Lines need new ownership

[peterdaly]

I can't see this happening, but here's the way I think this should work:

The phone company should be forced to "sell off"/"split off" a company that owns and maintains the poles and or last mile. This new company should continue to be government regulated, and maybe even get public funds. Forcing it to run as a non-profit run for the public good may not be a bad idea.

All companies that want, including the current incumbant, should have to purchase or lease access from this new company to provide copper based services.

This is what the mid 90's telecom act tried to create, but the "line owner" was virtual, and part of the largest service provider. The obvious conflict of interest caused problem. The solution? Eliminate the conflict, by making them two companies.

To take this a little further, I purchase my water from the town I live in. Why can't the copper last mile infrastructure be like that?

I know this is never going to happen, but that's my utopian vision.

-Pete

I work at an ISP that resells SBC DSL

[extrarice]

[quote]
What you aren't reading is that SBC conned all these ISPs into jumping on the DSL bandwagon, and signing up thousands of DSL subscribers...

After they did all the leg work, SBC then lowered the price they offer the public. Hence making it too expensive for the ISPs to compete with SBC (since they still are paying the old rate, they actually pay MORE for 'wholesale' DSL access then SBC is selling to the public for)
[/quote]

The bold part is the kicker. If SBC lowers the montly rate for ADSL service, our monthly SBC bill per ADSL line we resell stayles the same - we don't get the same price cut! There is no way we can compete with that. We are charged the "wholesale" rate of $39.99 per month per ADSL line. We are charged $125 per CPE (equipment shipped to customer). SBC charges its ADSL customers $25/month for service, with no equipment charges. How can we compete with that? Our "wholesale" rate is almost double what SBC customers are being charged! In order to break even we have to charge $60/month and have a two year service agreement to recover the cost of the CPE. There is no way this can be called "fair competition".

SBC in Nevada

[Tiresias_Mons]

SBC recently sponsored a bill in the Nevada Congress which made it legal for them to do this within the state. SB 400 (I think is the number) was sponsored by SBC and is an attempt to make it legal for SBC to charge whatever they want when dealing with 3rd party ISPs. I was in the car with a few colleagues Wednesday and one of them got a call from some of his clients who went through a 3rd party DSL service to say that their entire internet connection had been shut down because SBC cut the connection to the ISP.

Its not only monopolistic pricing, they are now, at least in Nevada (and I think I heard that Indiana or Illinois had a similar measure passed) absolved from even offering the lines to 3rd parties. We're trying to start a grassroots counter-attack in the Reno area, but its going to be a long fight for certain.