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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
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.
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.
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.
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.
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!
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.