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FCC Considers Deregulation of DSL
Phlatline_ATL writes "In an article on ArsTechnica, they explore the FCC's current consideration to reclassify DSL as an information service and as such would no longer require the telcos to lease out their lines. This seems like it would effectively make the telcos the exclusive DSL broadband providers." From the article: " So after six months to a year it would be goodbye Earthlink and Speakeasy, hello SBC DSL monopoly (in the case of Chicago, where I live). So the telcos would get what they want, which is no competition while the consumers get screwed. But it's perfectly logical under the FCC's definition of broadband competition, where they want cable to compete with DSL--and hopefully IP over power lines and WiMax down the road."
"If only we were allowed to keep their lines all to ourselves," they say, "we would hurry to get fiber laid to every house in the land and offer faster and wider range of services."
It's not exactly as if DSL has been a "competitor" by any means in any area I have lived in. Its distance requirements, slow speeds, and typical poor telco customer service has always lagged behind services offered by Cable. This is speaking only from my limited experience with four different DSL providers and two cable providers so obviously YMMV.
When I first got DSL in the summer of 1998 from Epix/Commonwealth in PA it was 640/160 and remained that until 2003 (IIRC, I wasn't living at home anymore) at which time they bumped the service to 1.5/384 to "compete" with Adelphia cable. Five years stuck at half the speeds? Problem was that there was NO competition because Adelphia was only broadband downstream and analog upstream in many areas for quite some time.
Out at college we got DSL in the fall of 1999 when we moved into an apartment. Verizon offered the lines and we took up the local freenet ISP as they were cheap. They were offering 768/128 on overcooked DSLAM racks (two racks per T1 instead of one rack per T1 like it was supposed to be) and speeds were consistently in the 40kB/s range. No one would take blame and would always finger point at the other guy (it's the ISP's fault, no it's Verizon's fault!)
Roadrunner came to town in the fall of 2000 and we dropped DSL quickly. While our latency in online gaming went up so did our download speeds. At first it was a bit over 1.5mbs but quickly went up to 3mbs. There was no finger pointing as RR handled both the ISP and the line. Was it good? Certainly for me it was. Faster speeds, less downtime, and no finger pointing. Comcast was smooth in MN but working for them in OH I knew that there could be serious issues (depending on your location) with speeds, intermittent bloc-sync, etc. 1.5mbs and then 3.0mbs w/o any real problems. Problem here was DSL wasn't even available and if it was, it was only 640/128 for more money...
My idea of DSL being competitive changed only slightly when I moved in August of 2004 to a house that offered Charter (no servers w/blocked ports) and DSL (Frontier and ISP choice). I went with Frontier and Visi (local kick ass ISP that allows servers). For once in my DSL using life I am happy w/the speeds (currently 3712/448) and the service. Visi handles everything for me so I just contact one point. I would be *extremely* upset if I had to go back to Frontier as they don't allow online bill pay, aren't very nice on customer support, and are likely not as knowledgeable as Visi's guys. Charter, charging $39.99/mo for the Internet (I think it was only $11 for CATV making it a total of $52) was a ton less money than Visi/Frontier at over $60 (requiring me to have a voice line and the $25/mo ISP charge). For most the price alone is a no brainer. For me, because of the server issue, the couple extra bucks is worth it.
So in all those years Cable hasn't improved all that much and neither has regulated DSL. So where's the competition driving faster speeds? How will deregulating DSL do anything?
It's sometimes better for the customer to use the same line and ISP and it's sometimes better to use the ISP different from the line, but it's *always* better to give the customer a choice.
So, the FCC is going to "do us a favor" and push for businesses to continue to fuck their customers over? Freedom to choose is always a better option to than freedom for businesses to do what they want... They have proven time and time again that they don't have competition as they already charge astronomical rates for the lines. They probably can make more money by finger pointing and less staffed CSRs for their own ISP. What incentives do they have to move to high capacity lines if the only other option is Cable? None. Especially when it's in the best interests of the Cable company to keep their available down
They're not the cheapest, but their staff is the most knowledgable I have seen, and they're definately the most Linux-friendly.
The more people that switch away from SBC the more money the competition has to fight this stuff.
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Clearly SpeakEasy and Earthlink don't know how to properly bribe officials to keep themselves in business. It's their own fault, really.
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This seems like one of those grand opportunities, like the building of the U.S. highway system, where the government could step in and provide universal internet access. Such a move would make it possible for people out in the countryside to get broadband and access to high speed internet services.
The current problem is that the vastness of America means that private companies don't find it cost effective to hook up Ma and Pa Kent out in the sticks. But under a government system, those people would get the service.
A lot of people don't want to pay for that, I'm sure. However, if you consider that the reason you have your broadband is because it just happens that you are lucky enough to live in a densely populated area. People who run farms and are otherwise far away from the crowds of cities simply can't generate enough demand to make it worth the broadband companies' while to hook them up.
This deregulation is the opposite direction that the FCC should be taking. There are certain things that the government ought to provide, or ought to subsidize in large amounts, and one subset of those is basic utilities. The Internet is one of the utilities that will be key in the future of our country. It makes sense that we get a jump on it now and wire (figuratively speaking. Wireless would work as well) the whole country up.
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Isn't that like saying only one company is allowed to make pencils, and another to make pens, and those two companies will compete? They fight with the marker company and the crayon company too?
Is this what competition now is?
I agree. The same rules should apply to phone companies and to cable companies. The notion that the phone company is a "utility" but the cable company provides a "service" is outdated.
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Okay- say what you will about deregulation, whatever. The issue to me, is that these lines are on public property, and in public airspace... Would another company be allowed to build poles and run lines right next the current lines? If not, it seems that the phone companies should have to share/lease them out at a fair price.
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The infrastructure built by the Bells was heavily subsidized by... your tax dollars.
Would another company be allowed to build poles and run lines right next the current lines?
McLeod has Fiber running 150 feet from my house along County Rd 46. I don't have access to those lines and they are likely sharing the "public space".
So why are they being treated differently? If we are going to regulate/deregulate due to public space I want access to that Fiber.
What is wrong is that the ILEC's (SBC, Verizon, etc) have had 100+ years as a protected monopoly to build their networks on the backs of their captive customer base.
CLEC's and other DSL providers have had since the 1996 Telecom Act to try to build a business in the face of the 800 lb gorilla.
It is silly to act like the ILEC's have been successful by building a business just like anyone else does. They haven't. They had the enormous advantage of being the only game in town for a long, long time.
What we need is structural separation.
Break each Babay Bell into two units.
One being a regulated company that owns the outside plant. It would be required to sell access to everyone equally at requlated, cost-based rates.
Take the switching and retail side of the company and put it into another, un-regulated unit. This company would buy loops from the regulated company just like every other CLEC does.
Of course this is pie in the sky.
The Baby Bell's have far too much lobbying power for this to ever happen.
As a Speakeasy customer who relies on their static to get work done, I was greatly alarmed by this article on Ars when it was posted yesterday. So, I did a little digging, and found this article. From it, I learned that the FCC is now only considering dropping the requirements that carriers must resell their finished DSL services, not the actual CLECs that rent the lines and have phsyical equipment in COs such as Covad. The following quote from the article illisutrates their evolving position:
Since Speakeasy resells Covad services (or at least they do in my case), Speakeasy isn't going anywhere. Granted, no agreement has been met yet, but it appears that a block of the FCC Commissioners is looking out for us. It is a bit disturbing to FCC mucking with these rules in anyway. It is clear that they don't understand the degree of reliance folks have on these services for their livelihoods.
What about areas where the is no competetion (with cable, etc)? It seems to me like this ruling will be ambivalent at best for people in large metro areas, but rural America - whose broadband infrastructure is still spotty at best, and often unavailable - gets screwed.
I grew up and my parents still live in a small town (~1200 people) in northeast Ohio. Broadband cable became available from Adelphia - the only cable provider in the area - about 4 years ago, and the bargain price of $59.95/mo w/o cable TV. I convinced my folks to try it...it was only slightly more than paying for a second phone line and dial up. It was an improvement, but just barely. Terrible uptimes, slow speeds (lucky if a download broke 35kb/s), and other crap...but still not dial up.
A couple of years ago, SBC took over the local telco, upgraded the equipment, and offered DSL to those lucky enough to live in town. 1.5m/512k service for $30 a month. I got my parents switched over and the difference is astounding. They're currently getting 3.0m/768k service for $26.95. I thought, "WOW! Broadband has become cheap, widely available, and fast!"
Not so. I am heading back to college this fall to begin studying law. The local population near the school is about 10x the size of my home town, so i figured they had to have good broadband, eh? I called the cable company. They don't service my street. Ok. I called the telco. After initially telling me I couldn't get DSL, they called me back to say that I could, in fact, but that they had to manually verify the "rural" address by sending someone in a truck.
In order to get DSL, I had to subscribe to local phone service. After much haggling over packacges I didn't want, I finally got them to give me *just* local service for $17/mo. 1.5mb/128k(!) will be $50/mo more; effectively, $67/mo for crappy broadband. I'm being bamboozled.
After I had signed up for a one year commitment with the Telco, I found out that a local ISP offered DSL for $7 less per month. The moral of the story? ANYTHING that has the potential to reduce number of options available to consumers is bad. I had another choice I didn't know about...but at least it was there.
A preposition is a terrible thing to end a sentence with.
Competition isn't always good. Look at mobile telecoms in N. America. Crippled by multiple competing standards each touted by different competing companies. It retarded growth for years, whilst the rest of the world using GMS got on with the business of selling phones and services.
Even now, I found it backwards and expensive here. I went to the UK recently (yes, I had to ensure my N. American GSM phone worked outside N. America because GSM here is on different frequencies here to everywhere else. GRRRRR!) and picked up a SIM card for a local pay-as-go account. They billed by the second instead of minute, and when I used up all my time, I could still receive incoming calls. Nice. Oh, it took me less than two minutes to get it all hooked up in the Post Office across the road from King's Cross railway station in London.
A couple of weeks later I went to California and tried to do the same. It took them more 45 minutes to set me up on Cingular. And then USD$10 didn't even last me a week of very light usage. What a rip-off. I used a third of that with heavier usage in the UK. I think billing by the second versus minute is one of the biggest issues.
Anyway, long gripe about a pet issue. The point is, the market often needs to be regulated in some way for the best all round results.
No company is going to be able to install the nationwide infrastructure that the telcos have -- it would be a multi-trillion-dollar investment if it was even possible given the amount of disruption to everyday life (digging up streets, etc.) that would be required. It was built piece by piece during the monopoly era, funded by a combination of tax money and monopoly profits, over a period of 90 years. The only way to participate in the DSL market is through the existing infrastructure.
To anyone who thinks Bell Telephone was a benign monopoly, well, you're wrong. I remember all too well the days when you had one choice of long distance carrier -- AT&T -- and you paid whatever they felt like charging. I remember when a 3-minute call to a town 15 miles away cost $1.63 (my parents made sure I'd remember). I remember when you were legally prohibited from owning a telephone; you had to rent them from the phone company, and since they had a monopoly there, too, they had no reason to offer anything more than desk, wall, and "princess" styles, and a handful of colors (about 5), so they didn't. I remember when long distance calls were something you made on special occasions, birthdays and holidays, not how you chatted with your friends for hours. I remember when they required you to get permission before connecting so much as an answering machine, and argued that allowing people to plug in their own hardware would cause the entire national phone network to collapse. (funny, it's still there) The Bell monopoly was never benevolent.
It is just mind-blowing that the federal government is redefining "competition" as "closing down multiple profitable companies competing in a given market and turning that market over to a single monopoly."
The power company owns the poles (and hates it when people call them telephone poles). Nothing is stopping a company from leasing pole space from the power company to run lines to compete with the phone and cable providers except the extreme cost.
If the FCC is going to deregulate DSL as a info service then the phone companies should be required to offer naked DSL. Currently, BellSouth requires all DSL customers to have a full service phone line. Other bells have the naked DSL option.
Telephone wires fall under "natural monopolies", where the investment and effort of creating a competing version of the thing for sale creates such prohibitive barriers that the market naturally tends toward monopoly. Phones, roads, sewers, power lines are all this type of situation.
Deregulation can potentially improve some of these services (provided it is done in a careful and balanced way) by de-integrating the actual monopoly from the elements sold on top of it. In phones, that would mean that one market is maintaining and selling physical phone lines (this one being a natural monopoly and hence tightly regulated to ensure non-discriminatory access), and another is selling voice and data services on these lines. The dergulation of the voice and data services market is what can help - deregulation of the wires and poles market is a disaster in the offing.
This proposal is the worst of both worlds - the telcos are allowed to keep their monopoly in the wires and poles market, as well as their vertical integration, but are having all markets deregulated. Look for rampant abuse, as well as distinct lack of competion or innovation.
It depends on where you live. Some places the power company owns the poles. In other places the telephone companies own them. Then there are the distribution companies. They just own the poles and right-of-ways and don't make either electricity or dial tone. Regardless of who owns them they are almost always part of a regulated utility monopoly, and therefore come under the controls of the PUC in your state, and they don't want the poles to become overloaded. Either technically or visually. There are regulations on how many cables can be on the poles or burried in the right-of-way. There are regulations on how close they can be. So, when it's all said and done, most places it is almost impossible to get cable for new technologies run, so forget competing technologies. Why in the world do you think municipal wireless initiatives are getting so much push? No cost for wiring IS a factor, but a lot of places they simply CAN'T run the wire.