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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.'"
I highly doubt that these companies lose money on their DSL offerings. I categorically refuse to get a landline, so when it came time to get a broadband solution in my new apartment, the cable modem won out.
If DSL were available by itself, I'd have gone with them instead, given that it's generally a cheaper option. So at least in my case (and I'd imagine I'm not the only one in this position) they'd gain a customer by offering the two services separately.
Don't start blaming that on the government, well except that the whole phone monopoly is the governments doing, but nearly all of those so called "fees and taxes" on your phone bill go strait into the pockets of the baby bells. The regulation is not hurting you, its the only reason phone service is half way affordable. Whats killing you is that the phone companies have a monopoly and there is nothing you can do about it.
There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now. - Ed Howd
I have 'OneLink' DSL with Speakeasy, and the advantage is that you get pretty much a 'guaranteed' service.
I was about 6000 feet from my CO previously, and despite that, I could not maintain 1.5/768 DSL due to a crappy line installed by PG&E. Unfortunately, because there was no onelink service, I couldn't do anything if PG&E didn't want to help me out, which they didn't.
However, once I got OneLink, PG&E was now forced to lay a new line down or fix the line so that it was up to spec. Now I'm able to get 6.0/768 stable. Has not gone down for more than 10 minutes in the past 1.5 years (other than maintenance).
$telco = {"SBC", "Qwest", "BellSouth", "Verizon"};
$cable = {"Comcast", "Time Warner", "Cablevision", "Charter", "Cox"};
Don't buy it. FCC "might" but they never will. $telco will get what it wants, and what it wants is to force you to buy crappy phone service you don't need. $cable isn't interested in competing on price, so while they'll sell you the net without the TV, it'll cost you $55 a month anyway.
Sorry to be a pessimist, but I just can't see this happening.
Lemme get this straight. In 1982, AT&T divested itself of its local services by "agreement" with the US Department of Justice. This led to seven "Baby Bells". Three of those Baby Bells have merged and are now going to re-merge with former parent AT&T. Two other of those Baby Bells have merged and are going to merge with MCI.
How soon before MCI and AT&T merge and we're back where we were before 1982? Sure, they'll have to unbundle some more services, but such a merger is entirely plausible.
I thought deregulation of 1982 and the Telco Act of 1996 were supposed to give us choice. A choice of two or three should still be better than a choice of one, but when the Big Three (in whatever industry) offer the same products, services and customer service, is there really a choice?
I am doing research on the subject of local loop unbundling and I think you are right, the business models are pretty peculiar.
There are differences in US vs. Europe in how this is done, but the basics are pretty similar.
Two most common ways to unbundle a local loop are to force the incumbent to offer bitstream access or local loop for the entrant. The price is calculated for the access are calculated by the regulator. Two common pricing methods are engineering models / long run incremental cost and cost plus pricing. In the engineering model, the regulator tries to calculate what it would cost to set up a similar service now and gives it a payback time of say 20 years. In the cost plus pricing, the incumbent will give information about its marginal costs to the regulator who will add a premium on top if this to account for future investment costs.
Long story short, the access price set by the regulator does not equal the true price and there is possibility for arbitrage.
Of course, in the US, the FCC has changed its mind on the subject of should LLU be done at least 4 times.
So, there was some background as I see it. However, I have just started researching this subject so I still might have some stuff mixed up.