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FCC May Push Bells to Unbundle DSL

Carl Bialik writes "The FCC is nearing approval of two big phone deals -- Verizon-MCI and SBC-AT&T -- according to people familiar with the situation cited by the Wall Street Journal. But regulators are considering requiring asset sales and other moves, including the offering of unbundled DSL, 'without requiring consumers -- mostly home users -- to subscribe to phone service. Verizon already allows some customers to do that, but SBC doesn't. ... Patrick Mahoney, an analyst at Yankee Group, said that traditional phone lines are cash cows, so allowing customers to buy Internet access without traditional phone service would be costly to telecom providers.'"

19 of 233 comments (clear)

  1. Phone lines are cash cows? by Anonymous+Crowhead · · Score: 3, Informative

    Only if you add a bunch of features. I have a land line for a security alarm system. Local incoming free, local outgoing $0.02/minute. No voice mail, call waiting, caller id, long distance, etc. $12/month.

    1. Re:Phone lines are cash cows? by tji · · Score: 2, Informative

      $12/month is at the extreme low end of the pricing spectrum. As you mentioned, it's a line for an alarm system.. not exactly typical usage.

      Most people are paying upwards of $30/month for basic voice service.

      But, in either case, their phone infrastructure is a sunk cost, paid for a LONG time ago. The revenue they continue to milk out of all those people is highly profitable. Even at $12/month, they're not hurting. At $30++ per month, they're very happy, and will fight tooth and nail to maintain that captive market.

  2. SpeakEasy by Sorthum · · Score: 4, Informative

    http://www.speakeasy.com/ already offers a "naked DSL" option, but they do charge a premium for it over standard DSL-- and they're not even a phone company.

    Ideally with companies being required to separate the two there will be companies like Speakeasy that are now able to offer unbundled connectivity without charging extra for it.

    We can but hope, anyway...

    1. Re:SpeakEasy by Sorthum · · Score: 2, Informative

      What are you talking about? It's been a while since my admin days, but I can't recall ANY home users who need RADIUS servers. Speakeasy's offering doesn't use PPPoE either, from what I recall-- they use some form of MAC address authentication instead.

      I'm trying to decipher what you wrote and figure out if you're a troll who strung a bunch of IT words together, or someone who knows a crapload more about this stuff than I do. Have a coin I can flip?

  3. What do you mean? by 3l1za · · Score: 2, Informative

    As far as I'm concerned for the company's own self interest, SBC SHOULD unbundle it.

    After all, how many people order phone service in order to get DSL? Don't most people who have the option of DSL also have the option of cable?

    I know plenty of people who only have cell cervice -- no land line -- and who by default get cable just because DSL (in our area) always implies existence of phone line first. Which is -- in their view -- an unnecessary expense.

    Especially in light of the fact that we're hearing more mutterings lately about TV-via-Internet which might in the future give the cable networks a run for their money (or provide an alternative distribution channel for them). Which would make DSL vs. cable a tougher choice (if DSL were unbundled and Internet content were richer).

  4. Bum link dude by 3l1za · · Score: 3, Informative

    try this one, instead: Speakeasy.NET -- NOT computational econometric software... but, as you say, naked dsl.

    Anyway isn't this another one of those Rhythms/Covad/Northpoint etc. companies. They collocate in the Central Offices and rely on the Bells if some particular piece of fit hits the shan. I NEVER understood how that model could work; dsl service is basically a commodity meaning: no room for a middleman reseller.

    For all I know SpeakEasy has its own copper wire loops and central offices, though...

  5. how does it work down there in the U.S. ? by Adult+film+producer · · Score: 3, Informative

    I'm not entirely clear how dsl/cable access is achieved for customers in the u.s.... up here in canada it's sort of a monopoly for cable access, depending on which region you're in. For DSL, I believe many companies offer service in the same localities.. service is good, I get mine through cogeco cable, downtime in the last two or three years i could count with one hand (in hours.) The speed is decent as well, I regularly get 500KiloBytes/sec download from torrent sites and my upload speed maxes out at 85 KiloBytes/sec (very easy to keep my ratios at 1.5:1 or better.)

    Many of my friends have experienced the same with DSL, although it doesnt seem as robust as cable when I'm using it... maybe responsive is a better adjective to use.. Even people out in the small towns from the cities, 40-100 miles still have decent broadband service.

  6. In contrast by overshoot · · Score: 3, Informative
    I'm in Germany right now and have been comparing DSL rates with my colleagues. They complain about Deutsche Telekom pretty much as we do about the BabyBells, but a DSL line here costs about half what I pay in Arizona, with voice separate. No ISP required, so instead of $30/mo for the DSL and $20/mo for the (mandatory) ISP they pay about €15/mo total.

    Since a land-line here doesn't save you from per-minute charges, half of them don't even bother and just use the mobiles for everything.

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  7. FINALLY by scronline · · Score: 5, Informative

    Some good news coming from the FCC for a change. As an independant ISP using SBC transport it's been a huge pet peeve that they subsidize their DSL costs with their phone service(s). Until this new jerk got into the FCC it was actually illegal subsidization that was putting an unfair advantage in the hands of the telcos.

    Of course the fact that DSL is provided over a phone network that was built with tax dollars then handed over to the telcos to be maintained doesn't mean anything anymore...so why shouldn't they have a government sponsored monopoly.

    Of course this is flame bait for people who don't understand the way the economy works and how people like myself are important for getting services into remote areas that neither cable or the telcos actually care about until people like myself start complaining that we have large amounts of customers that went it in that area.

  8. Re:My question is... by Alcemenes · · Score: 5, Informative

    The short answer is yes, pricing is arbitrary.

    The Bells own the copper so they can basically charge as much as they please. Granted, they shove two services over the same pair of wires so one could argue that the only overhead for the telco would be the bandwidth but you also have to add in the switching equipment, wages for technicians, support costs and maintenance. On the flip side, the Bells are using infrastructure that was bought and paid for decades ago and they're basically squeezing every possible revenue stream out of their equipment so their costs aren't really any higher (other than bandwidth) to deliver DSL to a customer.

    The Bell's argument for not allowing unbundled pairs (dsl only) has to do with the regulatory requirements placed on DSL service. Now that DSL is classified as an unregulated information service that argument loses merit. Also keep in mind that VoIP is also unregulated for the most part. Add to this the fact that the Bells are beginning to convert portions of their networks to VoIP while building new, high performance ATM networks optimized to carry VoIP traffic. My guess is that the Bells will begin to offer unbundled DSL loops and shortly after this becomes available they will roll out VoIP services. This would allow the Bells to deliver high-speed Internet and dial tone over unregulated mediums essentially bypassing the bulk of the regulations and taxes placed upon telecommunications saving them a heap of money.

    I may be way out in left field on this but after having a few discussions with my account managers as well as technicians working for one of the Bells I think this is where they are heading. Bells are HUGE profit driven corporations so they are always looking for new ways to generate revenue, usually at the expense of competition.

    This is somewhat of a long-winded reply that has strayed off course a bit but hopefully I've made my point. I'm not going to pretend that I am some sort of authority on how the Bells operate. I am basing my reply on observations I have made and personal experience. I'm just throwing my two cents into the pot.

  9. Re:Since this is obviously a common misperception. by cameldrv · · Score: 2, Informative

    Analog lines have power for your phones built into them. This is maintained by generators at the switching station if the power goes out. If you have an IP phone at your home, you need another source of power.

    Furthermore, the technology in your IP phone is much more complicated and error-prone than the technology in conventional circuit switched telephony. A big reason for this is that conventional telephone reliability was historically and continues to be highly regulated. 5ESS switches actually achieve six nines reliability. IP is much newer, more complicated, and has not been subjected to the same degree of regulation, and so the reliability standard is lower.

  10. Yeah right... by ImaLamer · · Score: 3, Informative

    Not when Time Warner won't sell me the cable connection without taking up cable service!

    At least my phone bill hasn't gone up 40% in the past two years. I'm not making the typical antiCable complaint here, I'm just saying that for the record my phone bill hasn't gone up since 2000. They've added features and even thrown in free long distance (30 minutes per month) but they haven't raised the price.

    Vonage isn't even old enough to tell what they will do. Besides, we get a lot of bad storms here - I'd like to talk on the phone when the power goes out without using a UPS or gas generator.

    1. Re:Yeah right... by fireboy1919 · · Score: 3, Informative

      FUD. I've had TimeWarner Cable since 1997 in Central Florida, but only for cablemodem, and not for anything else. The price hasn't gone up in that time, but the quality of service has gone WAY up.

      I now get 5 Mb/s for $50 (it was $50 a month in '97 too), and that speed never changes.

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  11. Why? by Master+of+Transhuman · · Score: 2, Informative

    "allowing customers to buy Internet access without traditional phone service would be costly to telecom providers."

    The same assholes provide cellular as provide land lines - and the only threat to landlines is cellular right now - VoIP is not yet a threat (but will be.)

    They're gonna charge you up the yin-yang either for cellular or landline, so who cares which it is? DSL is not relevant to that. Anybody who has DSL probably has cellular anyway - albeit perhaps in addition to landline. If they dumped landline, said customer would stop paying $15-20/month for his few landline calls, and make up the difference on his cellular anyway. It would probably be a wash.

    The only reason landline is a cash cow is because they've paid for the infrastructure long ago. In a few years the cellular towers and systems will be paid for as well - or be replaced by wireless nodes anyway, probably hanging on the same towers.

    The only thing not paid for is wireless (which is cheaper anyway) or fiber to the home (which isn't cheap at all, but critical to delivery of media content - unless wireless can hit 100MB to the home soon, in which fiber to the home might as well be dropkicked.)

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  12. Fiber coming too. by SpaceTaxi · · Score: 2, Informative

    In eastern PA, where I live, Verizon is rolling out a fiber optic network. Up to 30MB downstream, 5MB upstream. http://www22.verizon.com/FiOSforhome/channels/FiOS /root/faq.asp

    They also have been quietly offering $14.95 naked DSL as part of a deal with Yahoo. http://www.internetnews.com/xSP/article.php/352935 1

    I tried to see if I could sign up for this services and drop my dial tone, but they are only offering it to new customers. I ended up ordering Comcast cable at a promotional rate of $19.95 with the idea of switching again to whatever is the best deal.

  13. SBC/Yahoo DSL by zenray · · Score: 2, Informative

    As a matter of fact since I have SBC phone service anyway I just, two days ago, upgraded my dial-up to SBC/Yahoo DSL service for only $14.95. So far I just have an old and very temporary Windows system up but the DSL modem takes care of the PPPoE connection. I'll soon have a SmoothWall firewall up and my Slackware Linux systems back on the internet. My biggest problem right now is with Yahoo. There is some kind of self helper that is trying to install an updates already. I think the type of web space with this account is just what Yahoo allows me to 'custom design' on my site. I could not find any datails on where to ftp my existing web pages. I might loose my web presence on the internet - no great loss to the internet I'm sure.

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  14. Re:DoJ orders AT&T to divest by Widowwolf · · Score: 2, Informative

    The only way that they are being allowed to remerge back together is if it is shown that there is enough other competition available. I work as a rep for SBC, and let me tell you, due to cell phones and voip, we are losing landlines like the Titanic was losing passengers. They have already laid off a lot of people becuase of this and once we merge with AT&t we will be losing several thousand more...

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  15. Re:Allow my two cents. by bofkentucky · · Score: 2, Informative

    You are crazy, AT&T (and GTE and all the mom and pop phone companies in the rural areas) did the inital buildout of their copper and retain ownership of that plant. They do pay franchise fees and taxes for use of public right-of-ways, but the copper plant (and switches etc) are all owned by the local ILEC.

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  16. "How the internet killed the phone business" by fiannaFailMan · · Score: 2, Informative
    traditional phone lines are cash cows, so allowing customers to buy Internet access without traditional phone service would be costly to telecom providers
    The Economist has a good article about this very issue this week. From the leader:
    THE term "disruptive technology" is popular, but is widely misused. It refers not simply to a clever new technology, but to one that undermines an existing technology--and which therefore makes life very difficult for the many businesses which depend on the existing way of doing things. Twenty years ago, the personal computer was a classic example. It swept aside an older mainframe-based style of computing, and eventually brought IBM, one of the world's mightiest firms at the time, to its knees. This week has been a coming-out party of sorts for another disruptive technology, "voice over internet protocol" (VOIP), which promises to be even more disruptive, and of even greater benefit to consumers, than personal computers

    From the article itself:

    "Much more so than fixed-line operators, mobile operators would have to cannibalise their current business in order to generate new revenues from VOIP. Ironically, this means that BT, once regarded as a dinosaur-like incumbent, is now being held up as a shining example of an operator that is embracing the future, while Vodafone, whose pure-mobile strategy once seemed visionary, now stands accused of being on the wrong side of history. At the end of the day, there is no getting around the reality, as Skype's Mr Zennstrom says, that "something that is a great business model for us is probably a terrible business model for them.""

    Full article, subscribers only I'm afraid! :(
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