California Orders SBC to Split Phone, DSL Service

An anonymous reader points to this report at overclockersclub.com which begins "The great state of California has ruled that SBC Communications must sell local phone service and broadband service separately. This gives SBC customers the option to change local phone providers and/or choose any DSL company they wish."

Comments

Spiffy...

[ksilebo]

Because when I had SBC's DSL in Michigan, it was way oversold and sucked.

California

[Anonymous Coward]

Once again, California is one step ahead of the rest of the country.

Re:California

[steve buttgereit]

While I don't disagree necessarily on the move against SBC.... ...I have to say California is often times a step ahead of the country. A step ahead in mostly wrong, silly, stupid and self destructive ways.

Take the Gmail legislative initiatives here in good old CA. While SBC is for all practical purposes a legal monopoly, Google is not... especially for email. Yet our enlightened legislature still feels the need to regulate it to death. First step in the country, but totaly unnecessary and harmful to a California business known to employ many of the best and brightest.

So a step ahead... yes... we'll go over the cliff before everyone else.

Re:California

[Luscious868]

Once again, California is one step ahead of the rest of the country.

Yes indeed it is one step ahead of every other state when it comes to taxing it's citizens and businesses into oblivion and spending like there's no tomorrow.

Re:California

[Dun Malg]

I have to say California is often times a step ahead of the country. A step ahead in mostly wrong, silly, stupid and self destructive ways.

Why did 'Proposition 13' suddenly spring to mind when I read that?

I don't know. Why? Do you think the state and local governments should be able to tax my grandmother's house at its appraised value of $200,000 rather than the $12,000 she paid for it forty years ago? Jacking up people's taxes based on a something they have no control over (housing prices) is ridiculous. Even when a corporation buys, say, a $1.5 million building and five years later it's worth $5 million, there's no rational justification for taxing them based on the $5M figure. Just because it's worth $5M doesn't mean the owner would be willing or even able to buy it at that price, were he buying it at that time.

Re:California

[Ironica]

Do you think the state and local governments should be able to tax my grandmother's house at its appraised value of $200,000 rather than the $12,000 she paid for it forty years ago? Jacking up people's taxes based on a something they have no control over (housing prices) is ridiculous. Even when a corporation buys, say, a $1.5 million building and five years later it's worth $5 million, there's no rational justification for taxing them based on the $5M figure.

But it's perfectly reasonable to say that they should be taxed on the inflation-adjusted value of the property based on the base year. So your $1.5 million property bought in 1999 should be taxed at about $1.7 million in 2004. However, under Prop 13, it can't go up more than 2% per year, so it's taxed at $1.65 million. That's over five years, with very low inflation... people who have owned their houses since 1978 are paying on tiny fractions of the inflation-adjusted assessed values of their properties.

Meanwhile, the government is still subject to paying cost of living increases to gov't employees, and higher prices for materials, and all that other stuff that happens because of normal rates of inflation. While all the time, their revenues from property taxes can be guaranteed to fall relative to costs. Yeah, that makes all *kinds* of sense...

It wasn't so long ago...

[fiannaFailMan]

that they were selling the benefits to the customer of only having one bill. I can see it now. "We're splitting your bill in two to better meet your needs."

Re:This is a good idea

[krem81]

Not if a company has a government-mandated monopoly over telephone lines.

Is This Something New?

[perdu]

I thought phone and DSL were already split in most places. The article says SBC will loose all of it's broadband business but I don't see how -- can't they still offer a discount if you get phone plus DSL? One less bill to worry about each month -- works for me!

Bell South - my new hero!!!!

[grunt107]

I love the "we have no competition so we'll do as we please" comment. You gotta love hubris of this scale. Too bad when competition does come (wireless anyone?) that same mentality will be their downfall.

But I like my bundle

[SteroidMan]

I could care less who me DSL/local/longdistance carrier is as long as it works reasonably well. If California gets rid of the discount for getting all 3 through SBC it would raise my bill by 40 bucks a month! Sometimes regulation is not worth the taxes we pay for it, and this is one case where I don't think anyone will save money (unless they are willing to put up with a great deal of angst).

Annoying, more govt. stupidity

[Tri0de]

I get 1.5 meg on my SBC DSL and good cheap phone and long distance service. As usual, the state should just shut the crap up and get out of the market.

This state is run by a bunch of socialist baboons whose then wonder why every business that can afford to gets out as quickly as possible.

Re:Price Discrimination?

[kjd]

So you think it would be cool if the state ordered someone to set a lower price for a service they provide in a competitive market? How many laws are required to please everyone?

This could hurt CLECs

[binaryspiral]

I had to switch local carriers to get the DSL product from them - it was required by my ISP/Phone company.

I see why - Internet and Phone service is so competitive that many CLECs lose money on the DSL product but make up for it on the voice services.

SBC blows - I was glad to dump them for my current ISP. But I wonder if the CLECs are held to the same ruling if we'll see naked DSL prices skyrocket?

Re:Price Discrimination?

[Anonymous Coward]

Phone lines aren't a competitive market, einstein. It's a regulated monopoly.

Re:Nice ruling, but it won't matter

[Krow10]

The only way to create a level playing field is for the people who own the wires (SBC) to not be the ones selling DSL.

I was going to make a chidingly sarcastic remark along the lines of "a corporation using it's private property being unfair", but I really can't top what you already wrote.

You would have a point if SBC had layed the infrastructure on their own dime (instead of with taxpayer subsidy) or if any company could start running copper to the doorstep (you end up with cherry-picking, but that's why Ma Bell, the predecessor to SBC and the other RBOCs, was subsidised.) As it is, SBC and the other RBOCs have government protected and supported monopoly on telecom copper.

Ideally, what should happen, and I think this is what the grandparent is recommending, is that SBC be split into an Incumbent Local Exchange Company (ILEC) and a financially isolated Competative Local Exchange Company (CLEC). Then the ILEC (which would own the wire) can charge the CLEC (who would provide the services) whatever it wants.

The catch would be that the ILEC could not disriminate in either access to facilities or price to any other CLEC (and would really have no incentive to.) This was SNET (Connecticut's phone company) began implementing after the Telecom act of 1996. Then they were bought by SBC and I think that plan was scrapped. Competition is good, and currently, the presently discussed California ruling being a minor exception, we are moving away from that, IMO.

Cheers,
Craig

California Public Utilities Commission

[fhic]

Would this be the same CPUC that allowed the taxpayers to be royally raped by Enron and associates? Or that "demanded" that Northpoint continue to provide service for 30 days after they decided to unplug their network? The same CPUC that can't be bothered to negotiate with our neighboring states for water rights?

I'm sure they'll be just as effective in this as they were at all of those. Perhaps for their next act, they'll pretend they're King Canute, and order the tide not to come in?

CPUC is a joke. They're among the worst and least-effective agencies in this state, which is known for its bloated and useless government agencies.

Hey, if anyone wants a cushy government job, they're looking for a new executive director.

Re:Nice ruling, but it won't matter

[Phil Karn]

You are absolutely right. Congress screwed up big time in the 1996 Telecommunications act when they failed to realize that there is simply no way you can let a monopoly like a local telco into an unregulated business like DSL without said company thoroughly abusing its monopoly position against its competitors.

No amount of oversight can keep these abuses from happening. For a brief and shining moment, the US had a vibrant and competitive DSL market. Then almost overnight, it was pretty much just Covad and the local telcos. And I wonder how much longer Covad will be around.

Just look at how the telcos (and the cable companies for that matter) have managed to snow the FCC, the courts, the regulators, legislatures and the public with their propaganda that requiring them to provide competitive access to their wires is tantamount to socialism, and they'd have no incentive to improve their networks. Horse puckey! They might have a point if they were being required to provide access to their wires for free, but that ain't the case. Competitors are required to pay (often substantial) fees to use those wires. But the mere notion of being required to sell their wires to competitors is anathema to the phone and cable companies who are salivating at what they can do with their monopoly positions.

I see only two ways out. Municipalities could set up utility departments that would lay new wire and/or fiber along public rights of way and sell access on a nondiscriminatory basis. Or the telcos and cable companies could be required to divest their outside wire and cable plants into financially independent entitites banned from actually selling any switched services based on those wires. The outside plant companies would be required to market access to those wires, on a tariffed and non-discriminatory basis, to resellers who would compete in offering actual services to the public.

This is hardly a radical proposal, based as it is on a century of experience with common carrier regulation and antitrust law.