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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?"
Am I the only one here old enough to remember when AT&T was a "large phone company"?
I think it would be better the way it used to be for the consumer. I mean really, now that all the competition is gone, prices will probably skyrocket. Of course, maybe not because the companies no longer have to loose money to competition (if the competition isn't doing so great). Why did they do this? It just makes me wonder..
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I think they mean that large companies like AT&T and MCI were required to allow OTHER companies to offer local phone service.
Nope, they got it right...
For example, look into MCI's "Neighborhood Complete" package, which I currently use. Rather than having Verizon for my local service and MCI for my LD carrier, this rule allowed me to use MCI as my local carrier as well - Meaning that I pay only one phone bill per month, for $15 more than I paid to just Verizon each month, and I get unlimited free LD as a bonus (along with voicemail, CID, CW, 3-way, and I think a few others).
I for one will feel VERY pissed off if I get a call in the next few days from Verizon, telling me that if I don't sign back on with them I will have no phone service. But that seems like precisely the implication of this ruling.
Whaddya know, for once I find myself on the same side of an issue as the FCC. Ah well, I suppose this will finally give me the incentive to switch to 100% cellular.
With all the municipalities building their own fiber network and alot of master planned communities doing the same, (I work for a company that builds fiber networks for master planned communities) believe me, getting qwest off our backs has been a pain, they demand that we give them access to our network even though we own it, we've had to spend more than 500,000 in attorney's fees just to keep them at bay, with this ruling maybe that issue will go away, municipalities and other private companies can build their networks and we don't have to worry about qwest/sbc et al demanding that we let them have access to our networks.
I was also under the impression that the whole "share the last mile" thing wasn't working anyway. My friend who works at a computer repair shop -slash- budding DSL provider said that they were taking a loss on the DSL stuff at first because they were having to deal with verizon for access to last mile cable. Verizon sells DSL service for ~$35/month, and they wanted ~$32/month from the company my friend works for just to use the last mile (this was just for the wire to the customer's house, not transit, tech support, advertising, etc etc).
So, I think this is a step backwards in a lot of ways, right?
~Will
sig?
The linked articles aren't clear. Does anyone know if this case dealt purely with special FCC powers, or was it decided on Sherman anti-trust grounds?
If it was on Sherman anti-trust grounds, I can see why it went this way. The courts are very reluctant to apply such a devastating remedy, and tend to read down any application.
Interestingly/counter-intuitively, American regulators have effectively NO useful anti-monopoly or anti-abuse-of-market-position powers. Sherman Act gives only the financial equivalent of the nuclear bomb. Below that, there's essentially nothing: no system of graded fines or automatic restraint/requirement orders, no ability to remove company officers or investigate pricing, nothing.
The courts and regulators could do with a few more blackjacks, shillelaghs, and baseball bats, with some pointed sticks thrown in for more serious cases.
Then you'd be less likely to see such extremes of legal position. The regulators/courts could adopt middle grounds more reasonable to all parties.
--
Sal
Writings: saltation.blogspot.com
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A: This will damage competition.
B: This will NOT destroy it.
You've got a number of local phone options:
1) your local provider
2) Cell phones.
3) Your cable company (though I could be wrong here, it's entirely possible that digital cable/phone will be torpedoed by this. Does anyone know?)
So that's at least two, possibly three seperate groups vying to give you local service.
I'm sure the cost will go up, and features may be cut. But I don't think this is some telco apocalypse.
Fooz Meister
While I don't discount the numerous advancements and network builds out the former baby bells have done they seem to be forgetting they wouldn't even exist as separate entities if we (through government subsidizing) hadn't built out their networks in the first place.
Someone in the FCC needs to sit down and figure out just how much we doled out to each company for their buildouts and then either offer the company ways to pay us back or force them to offer discounts to other people who wish to use their network until the discounted amount matches what we gave them (adjusted for inflation of course).
--- I do not moderate.
I admit I haven't paid to much attention to this issue. But 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 only argument I can think of against this is because of a monopoly. However, I don't see (in my limited view of the world) that there is a monopoly preventing people from competing.
= 9J =
When they mandated competition for local phone service via the TCA act of 1996 they put loopholes in the laws that allow some shady people to get into the phone business. It was legal for a while (and might still be) to form a small phone company, lease out the equipment and lines from the large local Bell for way below cost, charge 20% less than what it would cost the Bell company to run the thing, and make lots of profit. Not all of these little competitors do this, in fact there are lots of legitimate companies who work to provide the customer with awesome service and who provide much of their own equipment. However, the drag put on the Bell companies is rapidly causing many ofthem to hit financial trouble and cuold eventually force some of them to reorganize or try to get out of land-based phone service entirely. It should be noted that if the Bell companies falter while the shady companies are still attached to them, both the customers of shady companies and Bell customers would be at a loss.
The law also implemented a double standard: national companies like AT&T and MCI were able to get into the local phone business while regional Bell companies could not enter the long-distance business without going through a rigorous set of checks and requirements that take years to meet (I think BellSouth is only now getting into that market 8 years later...). Overall if AT&T and MCI have had to face even an inkling of the problems over broadband that the Bell telephone companies have had to over telephones, then the law ought well to get thrown out and rewritten, IMHO.
As long as there is a Second Amendment, there will always be a First Amendment.
I knew some people not far below the CTO level at SBC. These regulations basically made it impossible for them to roll out new services. If they would add new lines, they would have to pay to roll out the lines then have to sell them to competitors at a loss.
These regulations really were slowing the spread of broadband technologies. Of course, the question comes so how should it be priced? The government set prices will always be wrong. Making it either unprofitable for the regional telco or the CELC.
If the regional telco gets to set the prices, it will of course be way too high.
The only logical thing I can think of is to do exactly what the court did, throw out the regulations.
Luckily a host of new technologies should force the telcos to be competitive in the "Communications" space. We have two-way satellite, cell phone-based internet access, wi-fi internet access, broadband over power, and currently most importantly cable modems. In Chicago, my dad actually had a cable modem/VoIP thing sitting outside his house with a little UPS. He had no idea it wasn't using traditional phones lines. He just knew he only had one bill, from the cable company.
This kind of situation should bring about very low prices without the regulation side effects. Considering how easy it is to switch with number portability and all it should bring about some beautiful Bertend, Duopoly competition.
People seem to be misreading the ruling. There are two issues involved:
1) The Telcom act requires the ILECs (incumbent carriers) to offer Unbundled Network Elements (UNEs) as part of the "deal" for being allowed back into long distance.
2) The FCC and State commissions set the rates for the UNEs. In most cases, this results in the CLECs getting UNEs for a price that is lower than it costs the ILEC to provice the service. This has the effect of effectively "charging" ILEC phone customers extra in order to subsidise their own competitors.
As the ruling was explained to us (I work in the wholesale IT department of one of the ILECs), it only affects the pricing (item 2), NOT the UNE rules. ILECs will still be required to provide UNEs, but at the same price as they charge to the retail department of the ILEC. (The retail part of the ILEC does the marketing to individual customers, and provides the value add services like voice messaging.)
It also looke like this is going to be appealed to the Supreme Court, so the immediate effect is zero.
I would like to know if anyone has any insight on what will happen to exising agreements that current CLEC's have with the RBOC's.
Also, I wanted to through my cents in. I don't know if anyone noticed, but this is not going to make much difference (if you look into my future glass ball). In a year or so, SBC or Bell South will buy MCI (after they come out of bankruptcy). AT&T will also be bought. There will be more steps taken towards the consolidation of the telecom industry. We will once again be back with 1 or 2 huge phone companies (providing both local and long distance services). They can bundle in dsl, they can add voip services, and might as well buy the local cable company or even better yet, merge with a national cable company. (Or a parternship ala time warner + MCI style). Whether the TCOM ACT of 1996 remains in effect or not, the telco's will once again be too huge for the little guy to survive.
Do not worry though, the telecom act of 2016 will break said companies back up again! (in the return of Judge Greene!)
-Carpe Diem (lizardbox)
Exactly. What I see eventually happening, if/when VoIP takes a big wet bite out of the traditional voice service, we will start seeing widespread bandwidth metering, more or less based on the per minute usage/cost of VoIP calls.
Those of us who use their internet connections for other bandwidth hungry applications will have to look around for companies which provide un-metered service - which will further improve their bottom line by reducing their own bandwidth costs.
There's no such thing as 'free'. The only reason we're getting "unlimited" broadband for a reasonable price is that every provider is in a 'land grab' for market share. Once they all have a nice grip on their piece of the market, and all the smaller competitors have been forced out, we will see a concerted effort by all to push the pricing up. (or am i the only one who has noticed the increases in price in satellite/cable tv service over the last few years)