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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"?
" 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.
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?"
Yes.
If anyone thinks for a minute that the telco behemoth will lie down and let the "free" internet eat its lunch, you are mistaken.
"...all the labours of the ages, all the devotion, all the inspiration, all the noonday brightness..." yada yada
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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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.
The headline wasn't clear on what position I am supposed to be taking on this. Will somebody please let me know so I can rant about it. Thank you.
i'm moving off campus, and i'd be happy to pay speakeasy's 100/month for 3M/756kbps dsl. complaining about 80 bucks for fiber is like complaining about premium gas(93+) at a buck fifty.
"'This is a decisive victory for consumers, for innovation and for free markets.' "
How? How? Damn it. How?
Anyone want to take a shot at it, because I don't see it?
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.
The thing that gets to me is that the RBOCs agreed to open up their networks to local competition and, in return, would be able to go into the long distance business.
Now that this comprimise has been made, they want to not be required to open up their networks. But do they have to get out of the long distance business? Of course not.
Cake and eat it, anyone?
The real solution would be to have the phone companies divest the part of them that manages the wiring between your house and the CO.
Gentoo Sucks
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.
Are there even any Baby Bells left? Last time I checked there were something like four big companies controlling telecommunitations nationwide. So much for the regional bells...
At the end of the artical it implies the it will be many years befor ehte appeals avenue is exhausted. But at that stage will anybody care. Broadband will more likely be wireless based and most people will probably have mobile phones.
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
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...
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.
Why is it when I hear 'This is a decisive victory for consumers, for innovation and for free markets.' come out of the mouths of large firms like AT&T, I begin to cringe?
I have never let my schooling interfere with my education.
What precisely is it that you think you own? The wire you put under the street between CO's and people's houses? OK, maybe you own that. What about the street itself, and the tunnels under them? I don't know about the case where you're a municipality, but you certainly don't own the street if you're a regional phone company. And yet, you've been given some kind of monopoly access to under-street cable tunnels and for that matter, residential termination points. If you claim I'm wrong about that, well, say I run an ISP with a downtown office--I'd like to run my own fiber through your city's streets and then up your city's utility poles just like the phone companies do, so I can drop Ethernet cable to the homes of my subscribers, and give them moby bandwidth without having to pay an RBOC to transport data for me. Where do I sign up to do that? I can't? Didn't think so--there's a monopoly like I said.
Given that the RBOC's are getting exclusive access to a public resource, I don't see any reason why they shouldn't have to share that access for the public's benefit. If they want to own their own network, let them build their own streets to run the cables under. If they want exclusive rights to put cabling under public streets, they better be willing to give the public access to the bandwidth.
Maybe there's some part of this that I'm missing, since I generally assume that anything Michael Powell's FCC does is bad, and when the courts smack the FCC it's a good thing. But this seems to me like a case where if the FCC has mandated more access to last-mile wiring, it's done the right thing.
I wonder what "rates set by the market" means when you own the market?
= 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.
kidn't this same ruling that forced the bells to share, allow them to be Long Distance carriers
I believe so.
and if that law has been repealed, doesn't that mean they can no longer be long distance carriers? as in- no more verizon long distance?
Nope.
1) It wasn't a "law". It was a regulation.
2) It wasn't "repealed". A part of it was "struck down" by the courts.
3) Only the part that required the baby bells to open their local lines at regulated cost was struck. The rest of the reg - letting them go into the long distance market - is still there.
It's a "victory for competition" only in the sense that it deregulates more of the market. Net result (if this holds) is that everybody is playing equally in the future.
Which means that the people with government-subsidized copper already in the ground and the people who have to bury new stuff and wire a city are "on an equal footing".
I guess some are more equal than others. B-(
Fortunately, if you have to dig up the streets to wire a town in order to reach your customers, you might as well wire it with glass fiber. B-)
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
... 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 can get fiber you your home for $80 a month?? Where do I sign up?!
"A great democracy must be progressive or it will soon cease to be a great democracy." --Theodore Roosevelt
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.
As unpopular an opinion as this may be, I am happy any time the authority of the FCC is challenged in any way.
The FCC is an unelected arm of the government that already has far too much control. We may applaud their efforts to limit the power of corporations, but how do we feel when they limit what we are allowed to see/hear/think? We can't have it both ways.
The next time you think it is a good idea to grant any power to the FCC at all, ask yourself how you would feel if you didn't have Howard Stern during your morning commute.
Does anyone realize that in order to "allow" competition this forces Verizon to sub-lease out their phone lines at BELOW cost?
This is a return to Monopoly? Ridiculous. Verizon was being forced by the FCC to basically hand out cash to any telecom company that wanted it. This has obvious results, Verizon won't invest in those lines, since it is LOSING MONEY.
The only realm left to Verizon (other than wireless) is the broadband market. Verizon has invested billions of dollars in DSL and in fiber to expand the reach of broadband to 80% of the homes in the US. Now they are deploying FTTP which will give us data rates in the 100s of megabits.
So there are two options, either regulate them into non-existance and force them to sell bandwidth to competitors who have invested NOTHING, or to let them reap the rewards of the capital they have invested and to keep the muddling hands of the government out of broadband regulation.
Drinking habits can be dangerous. You can choke on the cloth and the nuns will wonder where their clothes are.
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)
Too late for Lucent, these discounts made it impossible for RBOCs to invest in new technology as they had to resell at a loss and Lucent died with no product orders. Now with the opportunity to make a profit they can put some great technology in place! Once the court order has settled down we should see some real growth in the technology sector!