FCC Reclassifies DSL, Drops Common Carrier Rules

Neil Wehneman writes "Via Media Law Prof Blog, it is reported that the FCC has reclassified broadband service as an "information service" instead of "telecommunications". This, among other things, gives the Baby Bells the same gift the cable companies got with Brand X : the right to stop opening their lines to competitors."

Comments

Re:First

[LostCluster]

As broadband is becoming more widely available it is becoming easier to switch providers, as well.

It won't be so easy if all that's left is the local monoploy cable company and the local monopoly phone company.

Re:First

[revscat]

It's about time they did this, goverment interference in the economy will, in the long run, screw people over. As broadband is becoming more widely available it is becoming easier to switch providers, as well.

It's been my experience that corporations are far more likely to screw people over than governments. Libertarian capitalism, like communism, looks good on paper but fails utterly in reality.

But who paid for the POTS infrastructure?

[Gothmolly]

Yes, its mostly modern fiber and VOIP internally, but there's copper to every house, and poles, and those discrete switching stations in the bushes. Who paid for all that? Since we (the US Taxpayers) did (whether its good or bad is irrelevant to this discussion), it should be open to all.
Those who live by the government teat (Telcos) should have to die by it, too.

Surely this leads to less competition?

[DavidRawling]

I don't understand.

Surely this means that the local "Baby Bell" will be able to prevent other companies from using the infrastructure, either directly or by pricing them out of the market?

If so ... how does this help the consumer? Who lobbied for this? And why was it done? TFA has little detail and the FCC press release seems to be more self-servient than anything else.

Now ... if the price they sell broadband at is $29.95/month, but they will only sell line access to the competing ISP at $39.95/month, the ISP cannot compete.

In Australia Tel$tra did just this (briefly) and got a slap on the wrist from our consumer agency, the ACCC. Is there a similar organisation in the US? Is that what the FCC press release is commenting on in the 2nd last para:

In a Notice of Proposed Rulemaking, the Commission seeks comment on whether it should develop a framework for consumer protection in the broadband age - a framework that ensures that consumer protection needs are met by all providers of broadband Internet access service, regardless of the underlying technology.

Not a good thing

[gomaze]

This is going to only going to create local monopoly providers. I work for a small, state of michigan only internet provider. That has been around for 8 years. We have started servicing DSL and it is exploding.

People are coming to us because they dont have to call flippin India to get tech support and they know we are a locally owned family company. We can provide DSL for $20 a month for a year contract and after you add the taxes and charges of SBC you are at that or over it.

It is times like this why I shake my head and ask why the rebulican party wants to kill local businesses, seeing that is what they say they stand for.
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Gomaze

Re:Not a good thing

[nagora]

why the rebulican party wants to kill local businesses, seeing that is what they say they stand for

No, the republican party stands for the republican party, that's all. Professional politicians are the last people you should turn to to run a country.

TWW

Re:Corporate America

[LostCluster]

I live in a foreign country and the weirdest things happen under the name of free market (like jeopardizing the electricity network), but everything gets more expensive because of this.

California is not a foreign country.

The real reason this happened

[nurb432]

IS not to protect consumers.

The dropping of common carrier status also removes any protection of content. Now the ISP will be liable for content that passes over their lines.

The 'consumer' no longer will have a right to privacy, since its no longer considered 'telecommunications', which was protected.

So its not about protecting us, its about controlling and monitoring us. Oh, and if it happens to make the big campaign contributors a few bucks along the way, all the better.

Why was the press's initial reaction so positive?

[rcw-home]

I've been watching the stories on this since they started hitting news.google.com. Most of the initial headlines were "FCC eases rules" or "Phone companies get internet relief".

Is it unreasonable to expect headlines like "Local ISPs across the country doomed"? Even if the press doesn't care about the ISPs, that's a lot of people who will probably be out of work soon, and employment trends generally are something the press cares about.

I hate this ruling for several reasons:

• It's the FCC wantonly overriding Congress. The line-sharing rules were set up by Congress as a main purpose, perhaps the main purpose of the 1996 Telecommunications Reform Act.
  
• The wiring that the phone companies pretend is theirs alone really belongs to the people. It's common infrastructure - if everyone had to attempt to duplicate it to compete, the result would be an expensive mess.
  
• It reduces us to a handful of choices for ISPs. The cable company, the phone company, maybe a WiMax ISP, some form of satellite access, etc. Those of us who consciously chose to buy our DSL service from a competitor do it for the markedly better customer service and for more options.
  

I think that the press is slowly starting to pick that up, thanks in part to organizations such as the Consumers Union. I hope the FCC is forced to reconsider. If they don't, I hope the local ISPs take the initiative to build some new infrastructure of their own (and I hope it's something so clearly better that it's not just an expensive mess).

Competition Shompetition: It's the Royal ROI

[DannyO152]

Here's the theory, in perfunctory fashion, because I don't buy it. Broadband uptake in the US is not going as quickly as somebody wants. Aha! the FCC reasons (helped by whispers in the ear), it must be because the owners of phone lines won't upgrade them unless they get the full return of their investment. So if the Baby Bells own and maintain the lines, the Baby Bells are granted full control over how much they charge other information service providers, and, in order to make negotiations between the Baby Bells and indy DSLs more equitable, the Baby Bells can now walk away and say no soup for you, More return on investment means more investment in infrastructure and more supply means more demand. Entry into the brand new beautiful broadband world accelerates.

And some folks at SBC and Verizon get together with their lobbyists and a few of their contacts in Congress and the Executive, and tilt many a glass in honor of these days in the new gilded age.

Re:Larry Magid

[suitepotato]

The majority of competitive DSL ISP offerings are through CLECs, which are Competitive Local Exchange Carriers. Should the ILECs (Incumbent Local Exchange Carriers) be required to keep their copper open to CLECs, then competitive DSL will still be an option should any CLEC choose to pay for the co-location, backhaul, per line cost, etc.

It makes no financial sense whatsoever to eliminate CLECs from the copper/fiber as they PAY the ILECs for the access/maintenance and always have. The majority of Speakeasy lines are through COVAD (properly capitalized, it is an acronym, COpper Value Added Distributor) if I am not mistaken. However, there really isn't a lot of money to be made at consumer DSL as a CLEC and acting as an ISP over ILEC DSL set-ups is more cost effective. This ruling eliminates the requirement that the ILECs open up their DSLAMs to other ISPs but it does not invalidate the existing contracts. Merely means that the ILECs will have supreme latitude in renegotiation at the contract's expiration. Don't like their terms? Tough.

But all those Speakeasy over COVAD lines aren't going anywhere. Most likely, they will have to do some hard thinking and probably look at partnering with CLECs.

BTW, DSLAM means DSL Access Multiplexor. These are where all the DSL lines terminate and aggregate first and then hand off usually via Fast Ethernet or DS-3 to a switch/router. CLECs may have one or several at a colocation. Some use multiple kinds and some use one kind. See Paradyne, Copper Mountain, Cisco, Lucent, Alcatel for DSLAM models availible.

Competition...

[e12532]

Leased loops are not going away. The telcos still have to provide access to the dry copper going out to customer locations. This ruling simply says that the telcos no longer have to provide the actual service on these copper pairs. I can see how in some areas this will be devastating. The company I work for, fortunately, has enough vision that they've seen this coming. For the past several months we've been implementing a solution using Ciena networks equipment that will allow us to continue providing dial tone as well as DSL to formerly resold SBC and Bell South customers. Basically instead of the copper getting plugged into SBC / Bell South equipment it is physically moved into our collo equipment. This is actually better for our company, leasing a copper pair is far less expensive than just reselling DSL or local phone service, and it gives us the opportunity to grow into new service areas and offer price points we weren't able to meet previously.

Also, we've obtained a $100 million grant to develop fiber networks in three cities, over which we will be able to provide data, voice, and television services...

This ruling is just a kick in the arse of the small telcos who have been skimming profit from the large ones by just reselling service (they've been able to do this for around 5 years now)

As someone else said, the teat is being taken away, it's time for the small telcos to stand on their own two feet and invest in their own infrastructure...

Just my $.02