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Regional Bells Blocking Broadband Competition
Tim Doran writes "USA Today has a story today describing regulatory moves by the regional Bell companies meant to stifle competition in broadband. Of course, nobody plays the regulators like the ILECs, and they're using their massive fiber builds as leverage against the regulators. They're even running interference on municipalities who are trying to build their own fiber networks!"
I suppose that they are going to oppose Internet2 research eventually just because the universities and organizations that created that network are not using their facilities to transmit the data... this is why some parts of the US economy are on the way to failure, because a few large bodies who monopolize the market in telecoms can't innovate fast enough, and spank down those who can.
When I was back home in Kansas City over Christmas, my uncle-in-law, who is a lawyer for the city of North Kansas City, was telling us about how Time Warner Cable was sueing the city because they were trying to put in their own cable broadband lines.
We're familiar with that type of game here in the Fox Valley area west of Chicago. We had three communities try to pull together to get municipal broadband through and it was fought tooth and nail by SBC. It is pretty pathetic that we are still waiting for complete broadband services out here given that Fermilab is in Batavia (one of the three cities). SBC resorted to scary, misleading ads and other dirty tricks and managed to keep the plan suppressed.
Personally, I think municipal networks (GMING springs to mind) are the way to go. I don't like the idea of private companies, with minimal to no accountability to anyone (except maybe the top 5 richest shareholders not on the board), having absolute control over who can do what.
True, Governments tend to abuse authority as much as anyone else, but at least you can vote them out of office. They also have a bit more ready cash to play with than most corporations, making the idea of ten gigabit pipes to the home a possibility. (So much so that Japan is planning exactly that.)
As it stands, most private ISPs are a bunch of incompetents who profit largely by backstabbing other private ISPs. (I can't think of any ISPs I've used, over time, that I actually liked for the quality of service.)
The main reason multicasting isn't deployed is because they don't know how to bill people for it. The fact that they don't bill any other protocol doesn't enter into the picture. IPv6 has never made much headway, not because it's not needed or wanted (since when have users not wanted things that automagically configured themselves and worked out of the box, wholly mobile and utterly transparently?) but because it IS automatic, mobile, etc, making the whole "ISP Experience" irrelevent and actually a disincentive.
In the end, ISPs don't want competition. Competition means smaller profits, especially as the number of USians going online has flattened off sharply. They want a homogenius, uniform, consistant monopoly. And if you're going to have that anyway, why not have someone like DARPA or NIST run the damn thing, so at least you know someone technically competent is running the show?
It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
Is that they have built their networks on our dime. They would have you believe that they built these huge networks out of their own pocket and that they took a huge risk in doing so.
The truth is that these infrastructures were built by government and given to them for maintainence. Perhaps not literally, but certainly financially. The phone company does not have emminent domain rights to my property to erect poles (snicker) or dig a trench, but for that power allowed them by the government. If they had to pay anything, it was small, and it didn't matter anyway, since they were nurtured by guaranteed profits by Public Service Commissions.
To have these guys behave in this way now disgusts me. There are 'real' companies taking 'real' risks these days without any guarantees of success or profit and they end up paying through the nose for communications lawyers just to get the chance to compete. I don't know if you have had to deal with a baby bell trouble ticket recently, but it wouldn't be hard to beat them in service.
The way I see it, the baby bells are only winning this race because we gave them a 75 year headstart.
They don't deliver phone service cheaply. Tell me that $25 a month for a phone that never actually gets used is cheap.
Community supported broadband projects, like the one mentioned for the Louisiana town are a FANTASTIC deal for the town, if they can swing it. If the city finances it as a 20-year bond, and charges everyone in the city $15 a month, they can deliver fibre to the home. The Iowa Communications Network delivers fibre to every county in a very rural state. It cost $350,000,000 to build, and has a cost of $20,000,000 per year to run. There are about 3 million people living in Iowa, so it comes to $120 per person for a startup cost, and less than $10 per year continual cost. If you amortize the $120 over 20 years, then it's exceptionally dirt cheap really fast internet for everyone. And the bell network doesn't take it's profit and give it to shareholders in another state.
...partly because of things like this that Qwest pulled. They were able to offer DSL piggybacking over the phone line, while we had to order an unbundled loop circuit (which cost money up front we had to charge the customer), then send out a tech to wire the circuit at the customer premise. When you compared pricing, customers would see a $99 setup fee from us for the circuit, modem, and sending a tech out to do an install, while Qwest would "waive" all but $.99
This is not to mention things like swiping the UBLs to for voice lines (hey, there's no dialtone, it must be a free line -- oops, down goes someone's DSL for a week), and circuits showing too high insert loss/bridge taps/whatever and then turning around and offering the customer their own DSL within a week of requesting the information from Qwest. It got so we would simply check the distance from the C.O. and if it looked okay and there were people in the neighborhood that had service we would send out a tech to do our own test.
Their actions might not have been on purpose, but the regional Bells show gross indifference if not utter contempt for CLECs.
Not taking shit from the Bell co. and their attempt to monopolize broadband.
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We need communities to follow her example. Broadband shopping is not like buying a car. It's an investment in infrastructure just like roads and electric plants. This is what the 'RIGHT WINGERS' don't want you to know. They reply with propoganda that government will only hurt broadband when in fact most monopolies of this countries have been private companies.
I see the Bill Gates , Carnegies , Rockefellers and other criminal monopolists as an excellent analogy to whats going on here.
They are trying to crush competition ! They don't want poor folk to get broadband because it cuts into profit margin !
What's even funnier is that the government created the first network
And even funnier is that the phone company hated the internet because it cut into their long distance business. Now they say they care about the consumer. BULLSHIT !
you can only get verizon DSL if you use there phone phone service. I know a few people who actually sighned up for AT&T DSL service and they had to go trogh hell because verizon didn't want them to go. It's a vicious battle and the customer looses this one because of lack of choice.
Back in 2000 I worked for a company named Winfire - anyone remember Winfire? Anyhow, Winfire's product was ad-supported free DSL. Essentially we were a reseller of SBC DSL and we made our money from the ads that our users had to view through our front end. Fair enough: you received free DSL, we recouped the costs and a bit more from our advertisers. The problem was SBC: a byzantine 23-step provisioning process (And if a user got "lost" at any step it was up to us to catch it and start them back - at step 1, naturally) to sudden and mysterious changes in DSLAM settings which left our users with no connection. SBC did a thousand crappy little things to make certain that our users were dissatisfied. Winfire went belly-up in early 2001. Maybe we deserved it, but I can not help but think that SBC did a great job of greasing the skids for us and for anyone else who chose to act as a reseller under the terms of the Telecommunications Act.
Add Qwest to this fucked-up list of idiots. They threatened us ( a local consortium of public education and city government in Oregon) with legal action because we wanted to set up our own fiber network instead of paying to run over their lines.
Joke's on them, though. We finished it, and its fully operational.
Bye bye income for Qwest, probably one of the worst companies in terms of price, service, and billing. Their incompetence with billing and overbilling customers is legendary.
...That Corporate America becomes increasingly more unethical every day and no one seems to notice or care.
The way they bribe congress, lie to the consumer, lie to regulators, and pull double-standards right out in the open like Bell did in this article.
I mean, really... Has no one noticed that "binding arbitration" appears in just about everything you are required to sign now? Do you people not know that this usurps your right to a trial by jury? That the real function behind it, wether or not you win the arbitrator's decision, is so that the company can't be found "guilty" of a criminal actions that would surface in a trial?
Oh wait, not that being found guilty in a court would matter... Look what happened to Microsoft...
Seriously, a lot of this binding arbitration language has happened because of abuses in the legal 'profession'. Once you get lawyers involved 90% of your gains from the action (or more) are history. It's like watching a family tear itself apart over an estate. No one really makes out but the lawyers.
At any rate, real reform probably won't happen through lawsuits. There's going to need to be completely transparent, independant regulatory oversight for that to happen on the scale it needs to.
"...Well, there's egg and bacon; egg sausage and bacon; egg and spam; egg bacon and spam; egg bacon sausage and spam..."
I'm sorry. The Bells then should be forced to divest into a services company and a physical plant company. Then the physical plant company can deploy and maintain the physical network, and the services side can compete just like any other CLEC. Only THEN will we find out the true wholesale and retail costs of the phone network access.
Right now, the RBOCs can almost make up their own values for both of these, and claim that they're losing money on providing CLEC access.
This comes up in professional sports negotiations. Where do team revenues start and end when it comes to negotiating collective bargaining agreements? The accounting is only slightly less than opaque on these issues. The owners portray their plights in the worst possible terms (if things are so bad, how come teams sell for increased value when they are sold? Gund just sold the Cleveland Cavaliers for $375 million, and he bought them for $20 million, according to reports. Even over a far longer period of time that he's owned them, and adding LeBron James' guaranteed contract into it, he made some serious profit off the sale, even if he'd been running the team into the ground, from a business perspective, which is not very likely!).
The RBOCs are the same. If their claims of wholesale rates being unfairly too low, then how do they make money if their retail service prices are consistently lower than what CLECs charge for the same services?
Why can I get Qwest or SBC DSL for $30/mo, but the cheapest I might be able to get SpeakEasy, etc., is $50/mo for the same level of service, and they have to travel on the ILEC's networks anyways?
How much does it "cost" the ILEC to host a Covad DSLAM at the CO as compared to the ILEC's? How come those costs aren't then rolled up into the ILEC's retail price?
Sorry. It just doesn't work for me any more.
Here in Sweden we have a lot of municipality owned power companies that have entered the broadband business, some supplying fiber to the curb, some going all the way and connecting private houses and offering services.
Generally, these entities have little clue on what is important when offering services, whereas they are excellent at putting cables (=fiber) in the ground.
As long as taxpayer funded entities put cables in the ground, it is necessary that these are available to all players to rent. This has the added value that the long write-off of these kind of cable systems, can be handled better by these than by smaller companies that have problems with cash-flow, who instead can concentrate on lighting up the fiber and offering services.
The state does not have an "unfair" advantage over a business.
The state must answer to the entire electorate and a business must only answer to a few major shareholders.
The state does not enjoy "limited liability", a corporation does.
The state must comply with freedom of information requests etc etc from virtually anybody for any reason (or no reason), a business need only comply with such requests when it is being accused of commiting a criminal act and a court orders it.
the foregoing show that the State has many unfair disadvantages AGAINST IT.
This relates to the current situation in that if a city decides to invest taxpayer money in a fiber network and then give it away for free, or make it part of the tax burden, they would be practicing predatory pricing, unfairly using their position of privledge to take away a market for a company such as Bell South and profiting from that privledge. Much like monopolies do to lesser competitors today.
As far as predatory pricing goes, the state does not do this with the goal of bankrupting anyone, or profiting from it, but with the goal of providing a public service. Private firms which practice predatory pricing, will raise their prices as soon as their competition is driven out, and this is contrary to the public good.
Predatory pricing is not immoral by any capitalist ethic and there is no reason the state should protect businesses from predatory pricing unless it serves the PUBLIC good. It is not for the benefit of the business to limit or ban predatory pricing of monopolies, it is purely for the PUBLIC good.
A republic or democracy does not need to engage in predatory pricing to get rid of the competition. The State is free to simply outlaw that service being offered privately. This is the sovereign right of the people.
If the state wanted to outlaw a private business and provide that service directly (like healthcare in Canada), then a state has the right to do so.
Businesses have NO RIGHT to be free from state competition or even state interferance. And every business knew this prior to investing a single penny.
The argument of limitless funds is invalid.
The state does not have limitless funds. It merely has A LOT of funds. And nothing in capitalist ethic says that you have a right to be protected against a competitor with more capital assets.
This argument is rejected by neoliberals when under-developed countries try to impose protectionist policies because foreign investors have such large capital assets (essentially limitless) that they have an "unfair" advantage over locals that can not compete, but the same neoliberals cry about "unfair" competition when a state tries to provide a service to its own people because the state has essentially limitless capital assets.
Except the situation is not the same. In 1 case the wealthier party is motivated by public good, and in the other the wealthier party doesn't give a shit about the public and will skip town if the public gets too unruly.
No one has a right to their *own* opinion. They have a right to the TRUTH.
One of the principles of business is the maximization of profit.
Actually, it's better stated, "maximization of shareholder value". It's this misunderstanding that leads to so much trouble.
Profit/Loss is only for a defined period of time. Value is somewhat timeless.
For example, as a CEO, I can maximize profits this quarter by firing every employee and selling the company's production facilities and assets. This move does not, however, maximize shareholder value.
This is an extreme example, but the focus on short term profits often harm the long term value of the shareholders.
One way to help solve this is to pay the management (or everyone, even) in a firm modest salaries and award them stock that can only be sold five years or later after their issue. This will keep everyone thinking longer term and will prevent a CEO from pumping the stock price through harmful moves and then jumping ship.
Basicly means that they own the lines.
I think thats the problem. The lines should be owned by the state, and ANYONE that wants to offer a service over them can pay a monthly fee to do so. Obviously the gov't should NOT be allowed to censor anyone that wants to provide whatever service they wanted over those lines.
The gov't gains a new income that doesn't have to raise taxes, and there should be plenty of competition for business to offer services over the lines.