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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!"
An ILEC is a telephone company that was providing local service when the Telecommunications Act of 1996 was enacted.
wdd
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.
Who would have ever thought?
"The No. 2 wireless carrier, Verizon Wireless, is also controlled by a Bell company, Verizon."
I'm not a fan of the bells, but they don't have much room left to maneuver. They're got a government regulated monopoly to deliver local phone service. Cheap. To everybody. For a dying service because everybody's using cell phones. They can now compete in long distance and TV now but everybody's using their cell phone for long distance and cable and satellite are far more popular choices for TV than "the phone company". And yet they've still got this boat-anchor around their necks in delivering high quality and low cost 100% uptime POTS lines to every person in an area. If they want to raise rates or change service, they have to get permission from the government.
So now along comes high speed service which is about the only feature they can compete on and now the SAME governments that forced them into these bizarre redtape bureaucratic maneuvers want to build their own fiber lines! For a political boondoggle! Yeah, if I were a Bell exec, I'd be pulling every trick in the regulatory book I could to keep my business afloat.
Now personally, I think the bells are dinosaurs and they're screwing over my favorite ISP by offering their DSL at cut rate prices but forcing my ISP to resale at $10/month more.
But don't be suprised when the Bells use the tools at their disposal to survive. Instead wonder why it is that the legislatures seem to think they're at the mercy of the Bells and not the other way around!
We have this problem in my hometown ( or something similiar ). 2 different companies wanted to come in and stick a big antenna on top of our water tower and provide wireless broadband connections to everyone within reach. Only problem is that they had to get their high speed connection through the local phone company (TDS) and it turned out that the company had plans to bring DSL into the area in a year or so, so they drug their feet and eventually it never materialized... twice! two different companies denied. Now we get their high priced slow ass DSL and all towns around our area with different phone providers have the wireless available. Its completely retarded.
RBOC: "Regulations, motherfucker, do you write them?"
FCC: "Yes..."
RBOC: "Now describe to me what our customers look like."
FCC: "T-they're kinda wooly... and have four legs..."
RBOC: "Go on" FCC: "...and they eat grass..."
RBOC: "Do they look like one of our customers?"
FCC: "What?
RBOC: "DO. THEY. LOOK. LIKE. A. CUSTOMER?" FCC: "N-no?" RBOC: "Then why you tryin' to stop us from fuckin' them like one?"
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)
Just a year, but it was enough. Money, unions, political kickbacks, etc;
ALL employees were required to go to bi-annual meetings where they were "asked" to join the lobbying group to call the government and relay the phone company's agenda. You had to either sign-up or sign a waiver.
How's THAT for political pressure?
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.
...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.
A classic example of policies interfering with progress.
Don't you mean corporate greed?
No one has a right to their *own* opinion. They have a right to the TRUTH.
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.
And illicit drugs -- now there's a market where bold entrepreneurs (read: scumbags) can chisel easy money out of people who have few or no alternatives.
Not true. I have way more choices when it comes to drug dealers than I do phone companies. Its a LOT easier to buy pot than it is to buy beer a lot of the time from the government controlled monopoly here.
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.
My (favorite) ISP, Sonic.net, on December 20th, filed comments at the FCC in response to BellSouth's request to exclude independent ISPs from access to DSL. The concern is that if BellSouth gets it's way, SBC may do the same. This would leave all California with just two choices for DSL: SBC or Comcast. Sonic.net is well worth the extra money I pay each month. I don't want to lose that choice.
Here's the PDF of their comments.
To a politician, one email equals one voter.
...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...
One of the principles of business is the maximization of profit. That's the nature of the animal and that's not going to change. What people call 'greed' is most times 'successful execution of business strategy'.
The only relevant question here is whether or not broadband should be a delivered service like 'mail' and 'garbage pickup'.
If the corporations, ILEC and cable corporations, weren't providing such shitty service, no voters would stand for using public funds to provide the service. That some municipal or state governments are willing to do this without significant fear of voter backlash (usually in conservative, mainly rural areas) says volumes about the lousy service provided by the existing monopolies in those areas. If those governments can provide better service than those corporations, then more power to the politicians taking the initiative!
Laissez lire, et laissez danser; ces deux amusements ne feront jamais de mal au monde. - Voltaire
I wouldn't believe it if I didn't read it on the Internets [=)]
A city... passed a law... GUARANTEEING BUSINESS TO A PRIVATE COMPANY. A L-A-W. That thing that is supposed to ensure order and justice. To guarantee profits. To a private company.
What the sweet fucking hell is wrong with you people?!?!? How does shit like this happen?!?
And, IIRC, don't ya'll have a funny thing called "Taxes" that is supposed to be used for "Public Services" such as water, roads... and the Internet? I'd call that a necessity in the New World, little Mr. 13th-in-the-world.
Seriously, I'm not trolling. What the fuck is wrong with a country when a company can sue because, in doing something good, a public entity takes away possible profits? And how the fuck does NO-ONE stand up and complain? I know most of the media is more concerned with money than with truth, but how does this not sneak in somewhere... a major newspaper, an anchor who just blurts it out...
COME ON PEOPLE! Democracy is a method of government. Communism is a method of government. Autocracy is a method of government. CAPITALISM IS NOT A FUCKING METHOD OF GOVERNMENT!
If I knew the wedgies I gave you back in 6th grade would have resulted in this . . . I might have taken a moments pause.
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..."
For 10 years, I worked as a SONET/DWDM engineer, designing and implementing fiber installations for one of these ILECs.
I read the article. The ILEC is standing in the way of progress? Give me a break. Sure, in this instance, they're complaining.... but local and state governments stand in the way all the time, yet that never makes the newspapers. I've seen cities grant access to install fiber, and then decide they're going to jack up the right-of-way costs to the ILEC, and then give away access to the competition for pennies per mile. Fair? Or unfair?
Often, local governments will take bids for right-of-way to install fiber. That doesn't promote competition. It tells me that the local government is greedy, and they want money to spend. They aren't interested in competition until years later when the citizens are angry with the single provider that won the bid.
During the dotcom boom, many cities took bids for fiber-based infrastructure builds. And often times, it was some poorly-planned flash-in-the-pan company that spent their entire wad winning the bid for a single city, and had very little money for equipment, labor, or anything else. Does anyone know if Sacramento got their city-wide fiber-to-the-home project completed? The last I heard, the company had gone bankrupt during installation, and had been bought by someone else. I hadn't heard whether installation was completed in any neighborhood. Anyone? Is that what you want coming to your house?
I've also seen local governments place a 10 year moratorium on new construction because people don't like their streets dug up. Frankly, that stifles competition too.
Laying fiber is very expensive. It's not like DSL, where you're re-using the copper loop, or cable modem, where the cable companies laid fiber to the neighborhood, and re-used the coax to the home. Fiber-to-the neighborhood is cheaper by far than fiber to the curb. Fiber is a huge pain to lay to the home.
Surveying, digging, laying conduit with thoughts to bend radius, redundancy, sewer, water, power, and future repair access for accidental cuts? Hope that the contractor has their best person running the backhoe so you don't have to worry about severed gas, electrical, or water lines. Then blow fiber down the conduit, terminate it, light it, test it, educate the end-users (the 50% that initially express an interest), all the while working with city planners, utility companies, city water/sewer departments, and keep the subcontractors in line? Then, after years of work, put active services on it, give away service for the first few months, and then hope to turn a profit at what the government says you can charge for services. And listen to people complain about the high cost? And then hope to be LUCKY to get 20% (I'm optimistic) of the installed homes as paying subscribers?
It's no wonder that the ILECs are concerned. It takes a long time to build, and it's very expensive. And the stockholders and Wall Street are mad if the payoff is anything over 5 years.
What would you think if you just spend $50 million laying fiber rings (not fiber to the home, but the precursor... fiber to the neighborhood), and then the local government decided to subsidize a "public" network, undercutting your entire investment?
And then consider this:
Installation into a neighborhood of 400 homes, you need 400 timeslots on the SONET ring, or 400 wavelengths on a DWDM system. And then expect that 20% will subscribe, but they'll move every other year or so?
Much of the fiber that was blown into the conduits during the dotcom boom is already out-of-date when even last years' best DWDM equipment is considered. The older fiber has problems handling 40, 60, or 80 wavelengths. So you might need to spend millions on extra DWDM chassis to cover a neighborhood. Sure, you could use a DWDM to cover a neighborhood, and then use SONET to hit every house, but who wants a DS3 or less to their home?
Personally, I'd rather have a wave on the
-- No sig for you!
Welcoming our new insect overlords, I can understand that. Welcoming slimy green new overlords from Sludgebarf 9, sure. Welcoming Sauron, evil overlord from Mordor, is a bit iffy, but I can live with that. Welcoming the Shadows from Z'ha'dum as our new overlords seems cool, especially given that the Minbari's motives are pretty suspect anyway.
But welcoming our broadband-competition-blocking Baby Bell overlords? That's just going too far!
One of the principles of business is the maximization of profit. That's the nature of the animal and that's not going to change. What people call 'greed' is most times 'successful execution of business strategy'.
Why not call it what it is?
It isn't always 'successful', nor does it necessarily maximize profits, but it is always 'greed'.
And the fact that it is in the "nature" of corporations to be greedy, doesn't make it morally justifiable for them to be so. Why do we alway try to excuse the conduct of our sociopathic creations we call corportions?
Since it is in the nature of corporations to be greedy, it is morally justifiable and pragmatic to impose severe public oversight and regulation on corporate conduct to insure they serve the public wellbeing (which allows their existence).
The only relevant question here is whether or not broadband should be a delivered service like 'mail' and 'garbage pickup'.
That question was decided rightfully by the people of Lafayette. As a NON-CITIZEN, what moral standing does Bell have to object?
No one has a right to their *own* opinion. They have a right to the TRUTH.
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 electricity meters never materialized (the vendor went bankrupt before delivery) but they have gigabit internet to everyone who wants it, for about $50 a month. The endeavor, rather than costing money in a public boondoggle (as a previous poster suggested) has turned a good profit, and avoided the horrid cost of a failed public project (the non-extant power meters).
Because they had it in before the recent rulings on this subject, the people in the tiny farming town of Ephrata get far more bandwidth than us here in town, for far less.
There's a similar story in Tacoma, WA, where if you live inside the city limits you can get cable and 10Mbps internet from the municipal power company for a fraction of what I pay just for cable. Just over the city line (and served by the same power company)? Can't help ya.
I like my Comcast cable Internet. It only goes down for a few minutes at a time a few times a month. It's got 3Mbps down and 768K up. I couldn't go back to DSL. The price is steep though, and they won't ever have any competition to speak of to drive their prices down. I sure do envy those folks whose government was looking out for them. But not enough to move to Ephrata (the sticks) or Tacoma (uptown).
We are all just a WAP wizard away from ubiquitous WiFi. Be the wizard!
Help stamp out iliturcy.
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.
Fact is in the telco market (which includes broadband) competition is inefficient & the more competition the more inefficient the delivery of services are.
Remember economies of scale are king in this game - relatively speaking a nationwide telco with a 1/3 of the market has virtually the same costs as a nationwide telco with 2/3 of the market, or even one with 90% of the market.
Now corporate monopolies demand over regulation which is why govt telco monopolies are the go - if prices go up too much polies get voted out; so there's really no need for all the consumer & anti-trust regulation that private monopolies demand.
So what we need are govt utility telco monopolies, like most places had (all of Europe, Oz, New Zealand, etc) until the Thatcherite consultants started meddling & persuaded all the world's govt telcos to be privatised to pay for election promises. Already today, just a decade or so later, most in the know recognise the period of govt telco privatisation as a historic mistake (as things go that's quite remarkable, afterall it took nearly 5 decades for many pundits to realise that the creation of Israel was a historical mistake, of cause we're exluding those who always recognised this).
Just look at how the fantastic economies of scale of having 100% of the market has aided Singapore Telecom in it's amazing job rolling out the latest 'n greatest in buzzwords network wise to every business & residence on the island, at the govt's behest. All of which would've been impossible to do at the price without having 100% of the market & without the advantage of govt legislation dealing with any problems that get in the way. A fine example of pragmatism over ideology. Remember pragmatism always wins out of ideology, even the ideology of the free market (the same pragmatism over the ideology of the free market gave us the national highway system in the US).
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.
At this point in the technological world, broadband should be a utility just like water, electricity (gas), sewer, etc...I'm not saying it should be a right, but holy crap, we are in the 21st century and my only choices at broadband are cox@net and a $1000/month T1? Why can't a city/county provide broadband access in the same manner as city utilities? Oh, I know, because it would cause a multi-billion dollar business to go under, which would reduce a politician's campaign funds.
"Get a bicycle. You will not regret it, if you live." - Mark Twain, "Taming the Bicycle"
My opinion is in the telco market (which includes broadband) monopoly is inefficient & the more monopoly the more inefficient the delivery of services are.
I live in Czech Republic, where (until recently) we had a govt-owned telco monopoly and boy, did it suck - long waiting lists for everything, high prices.
About two years ago, the monopoly on wire lines was softened somewhat, allowing alternative operators. Guess what? Prices have dropped & service quality has risen. The Telecom (wire govt monopoly telco) people actually started going door to door, trying to persuade the customers NOT to unsubscribe their lines (incredible, but true (although their attitude was less-than-customer-friendly)).
Back when we had one operator to rule them all (sorry, couldn't resist the pun ;)), it was NOT "rolling out the latest 'n greatest in buzzwords network wise" - actually, it was doing pretty much nothing except maintaining the existing network. I guess this is not Singapore.
btw: "voting something out" is quite a tedious process. Once you grant a government monopoly, it's nearly impossible to "vote it out." The attempts to "vote out" the telco monopoly in Czech Rep. has been going on for about 10 years now, with no end in sight - why would a government willingly give away a part of its power?
The problem with this is the same as with construction. The government highers the lowest bidder to build all its buildings, and you know what? You get what you pay for. Having policies that the people can decide would be a good thing, but who is going to ensure they're being followed? The government, what is left of it, would still have to employ some body to oversee the contractors to determine their compliance. It would have to be the same checks and balances that exist today (Ex: Internal Affairs to the police), but there would be more room for corruption and negligence from the disassociation between those doing the job and why they do it. Now, the police and firefighters work because that's what they want to do with their lives, help people, but how would that change if they were just contractors? With no promise of work after the next bid, and already having to work for less so their company can be low bidder, how much will the worker care about his job over his paycheck?
Generally, I get bored with my replies and give up on making sense halfway through.
For the record, I have no problem with others using the same right-of-way, but if they are all selling the same technology, then they are likely just going to drive up the costs by laying redundant infrastructure. (some redundancy would be good). The question is, is the increase in average cost (since more providers means fewer customers to split the fixed costs over) offset by the other benefits of competition. The answer depends on the nature of the demand for the particular service.
----- Question authority, but not ours. Hate the man, but we're not him.