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Courts Overturn FCC - Return of the Monopoly?
An anonymous reader writes "The DC Circuit Court of Appeals today threw out FCC restrictions which previously forced large regional phone companies to allow companies such as AT&T and MCI the ability to offer local phone service. The court also upheld FCC rules that no longer require large phone companies to share their advanced broadband networks of the future with competitors. The USTA response:
'This is a decisive victory for consumers, for innovation and for free markets.' The AT&T response: 'At a time when consumers and small business owners are just beginning to realize the benefits of competition, the D.C. Circuit today held up a stop sign and halted eight years of progress.' Enough about the Baby Bells already -- how is this going to effect my VoIP phone from VoicePulse (similar to Vonage)? Did I switch to VoIP so I can pay $15/month for my phone bill, but will have to pay $80/month for FTTH or some other form of broadband?"
" forced large phone companies to allow companies such as AT&T and MCI the ability to offer local phone service."
I think they mean that large companies like AT&T and MCI were required to allow OTHER companies to offer local phone service.
AT&T and MCI (and Sprint) are long distance companies.
Unless the local Bell-equivalents share their last-mile wiring with them, they cannot offer local phone service, because they have no physical connection to the customer.
ATM / Frame Relay Bandwidth.
We've looked at quotes from AT&T on DS-1 and DS-3 types of bandwidth. They own their own nationwide backbone, and are a tier one provider.
Not to mention their long distance service, and many many payphones which now cost $0.50/call.
~Will
sig?
The court upheld other rules requiring the former Bell companies to allow providers of high-speed DSL Internet service to use their copper wires, but not upgraded fiber optic or fiber-copper lines. The FCC said requiring the companies to provide access to the upgraded lines would deter the former Bells from making better systems.
At least for now...
... why should owners of a network be required to open it up to someone else? If I build a network for a location, I don't want to let others onto it unless it makes me extra money and doesn't hurt my income. Shouldn't the free market and not the government dictate something like this?
The issue is that the "Incumbent carriers" already have billions of bucks worth of copper wire (and miscelaneous other stuff) in the ground and strung on poles. That was all subsidized by government-enforced monopoly prices over decades. A new competitor would have to dig up cities (more expensive now than it was back then) and bury his own wires - then try to compete with somebody who already HAS the wires, pretty much already paid off by money extorted from customers while the government enforced the monopoly.
EVENTUALLY they'll have to go to an open market. Like when the already-buried wire is running out and new stuff will have to be installed no matter who is providing the service. (Even then an established company will be ahead, only having to do incremental upgrades.) But right now the incumbent players have a major edge - thanks to past government favors at the consumer's expense. The FCC is trying to level that playing field.
And the court is trying to keep the FCC within the law as written.
Fortunately, the FCC seems to be honestly working for the consumer's interest (as they perceive it) this time, rather than rubber-stamping the industry players' recommendations. And the court also seems to be trying to do that as well (as part of its job of interpreting the law). They just have this little difference of opinion about whether one of the regulations is legit.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
you are right. you have to have the fcc approve your application. a true attempt at competition would go through this trouble. the competition that the telecom act has provided allows fly by night shucksters come in,make a few bucks on penalties from the local phone companies then fade back into the night when they made their easy money. they get line access sold to them at BELOW COST. a few legit competitors to local phone companies have come in placing their own cable and have done well....baby bells do not have "exclusive" rights to place cable anywhere...they have an obligation to place cable where companies like at&t and sprint deem it unprofitable to fool with.
You are right on, this is in fact part of the continuing saga of the TCA of 1996. The FCC has now had 8 years to come up with a legal way to allow shared access to RBOC resources failed to do so. Contrary to the inflamatory statements in the original post, this ruling doesn't have anything to do with allowing or disallowing competition in the local access market. This ruling disallows something called UNE-P unbundled network element platform, which is basically the mandated renting of telco switching (not just the local loop) facilities to competitors at a loss. CLEC's essentially leased complete phone service and resold it doing nothing more than shuffling paper. It was artificial competition, only good in the short term. The losses this caused not only hurt the LEC's but also 10's of thousands of their employees that were laid off. At the same time this discouraged investment in new network equipment and spread the burden of support across the fewer remaining employees. (Keep in mind that most of the CLEC's utilizing UNE-P didn't have support staffs of their own) This led to reduced service for both RBOC and CLEC customers. I am so glad to see that you took the time to articulate the issue amongst all of this leftist FUD. This issue had nothing to do with competition, this was about fair play. CLEC's are still perfectly capable of putting in their own switches and competing head to head, they still have access to the local loops after this ruling.
You should be happy then...you don't even need to RTFA, but if you had read the article *description* you'd know that AT&T *dislikes* the ruling. The USTA is the one responsible for your quote. Frankly, I think AT&T is in the right with this one...
The right to put stuff under the street isn't quite as exclusive as you think. In most municipalities, if you can convince the powers that be that the utility you want to put under the street is in the public interest, convenience or necessity (and you're willing to pay the appropriate fees) - then you can use the streets. I believe this is covered under franchise law (not talking about restaurant franchises here).
An example - a company decided to approach New York City with an idea to serve the public - and make money for the company. The city said OK and New York got its first subway system. This is a little more disruptive than your fiber optic line.
The rational for granting utilities an exclusive franchise was that it would be cheaper to have a regulated monopoly than having competing entities "wastefully" duplicating service. In return for the monopoly status, the utility would be subject to regulation. This is where I get really uncomfortable with the FCC deciding that local governments have no right to regulate telecommunications.
As long as I'm on the soapbox - if a telecom company states it doesn't want to be subject to local regulations - then I'd say the telecom is not entitled to any special protection from local governments. Say Jim-Bob backhoe operator cuts through the fiber optic lines - I'd say "tough shit".
Anyway, kudos to you for bringing up the issue of who owns the right of way - this is something that a lot of slashdotters have absolutely no fscking clue about.
A Shadeless room is a brighter room.