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FCC Kills Build-out Requirements for Telecoms
Frankencelery writes "In a 3-2 vote, the FCC has altered cable franchising laws in the U.S. to the advantage of AT&T and Verizon. 'The FCC order imposes a 90-day limit on local communities' franchising decisions, but, more importantly, does away with build-out requirements. Those requirements generally insist that companies offer service to all the residents in the town, rather than cherry-picking the profitable areas.' Good news for the telecoms, but bad for cities who want a say in the fiber deployments."
It's for everyone: if companies are forced to sell where wouldn't sell, this would affect the prices and quality of service for everyone.
There are cases where even "evil monopolists" should be left to do certain aspects of their business without regulators messing in it.
Especially when they own the regulators.
Good to see corruption and graft still thriving in the USA.
Somebody just got a brand new phantom in their driveway via payouts from Telecoms. The FCC are the ones that required cable companies and sat companies to sign individual franchise agreements with each city that service was offered. Why would they go and allow telecoms to skip that step with their services? At the minimum mandate that they have to roll out their products to everyone. Crazy!
I'm not from around your neck of the woods, and honestly couldn't tell you if the decision was a good or a bad one. Nor do I understand the consequences or background to the situation, even after RTFAs.
The very fact that the decision had to be made leads me to believe there are communities, cities, populaces with many thousands if not millions of people who want a say in how their town is serviced by a telecommunications company. Some kind of kickback, like a swimming pool, or some franchise fees.
To my naive way of thinking, it seems incredible that 5 (3-2) people can veto the decision making process / power of entire cities or possibly even states, throughout the entire country.
It also seems kind of wrong. Power, corruption, ultimate power, you know, that kind of wrong.
Presidents adding oral ammendments to bills and unelected agencies enacting legislation.
This is just yet another example; it is rediculous. Where is the mass outrage? Shouldn't Republicans be outraged by our government wiping its ass with the Constitution - limited government and separation of powers? Shouldn't Democrats be outraged as the government continues to redistribute our hard earned money into the pockets of its corporate sponsors?
I mean ordinary people. I'd like to think I'm an ordinary person, but polls say otherwise. Why aren't ordinary people outraged when they see these abuses and corruptions?
build-out requirements are part of the franchise bargain that telcos get when they want to run their lines through public property. Franchises are a form of monopoly. How is my discussion of monopolies and regulation irrelevant to franchises without a regulatory balance?
Would you rather nobody be allowed to burrow on public property to build out the infrastructure for the Internet? That's what we'd have if the city were not allowed to make such bargains. Unless, of course, you want the city paying for all its own infrastructure, and owning it directly. You'd like that, wouldn't you?
I'd take either, but you can't pick and choose who wins in such a bargain unless you want to be thought of as interfering in a business negotiation.
How many other ways can I deduce your philosophy into a contradiction? Shall I continue?
As seen on slashdot before2 9222, various companies attempt to hinder broadband rollout by governments.
http://yro.slashdot.org/article.pl?sid=05/01/05/0
Will this decision then reduce the resistance against municipalities building their own infrastructure? If my township isn't one of the cherries to be picked by the companies, we can pick it ourselves.
In my area, there's an ISP that's also a CLEC (Competing Local Exchange Carrier - they offer dialtone). They're building out fiber to buildings for Ethernet and telephony services, and would like to get into video (TV) but since they're a small company, they just can't do it if they're going to be required to build-out to the non-profitable areas. It's not just a matter of raising prices for everyone to subsidize the sparsely-populated areas, it's a matter of not having the access to the capital required to do such a build-out in the first place. That, and the "densely populated" areas around here are not big enough to make the subsidization idea feasable even if the build-out could be done.
Here's another perspective - the telco's are only offering DSL in specific areas - sure it's probably primarily for technical reasons - certain radius from the CO for DSL to work, but if they can "cherry pick" for DSL, why not the rest of the services they offer.
On the other hand, arguments about large numbers of rural residents not having phone or electric sevice now if the build-out requirements were never in place are hard to ignore, and high-speed internet is being considered a basic necessity by more and more people as time goes on. Perhaps the FCC doesn't agree about that, or perhaps they figure having wide-spread fiber deployments at all would be a better starting point to eventually get fiber to rural areas than if fiber wasn't in the city/town at all.
OK. moment. moment. moment.
No, it's stupid.
I'm so old and grew up in so rural an area, I realized very young that I profited from rural electrification. My mother still displays an "antique" kerosene lamp. Didn't purchase it. Family possession.
Sure, people complained that rural electrification was unprofitable. We could probably find some blowhard who complained at the time that it destroyed the opportunity for rich people to experience a Deliverance Weekend amongst the simple people who still played banjo on the porch in the evening. But can't most of us agree that _some_ national infrastructure standards are good for everybody? The libertarian miserliness screaming that somebody else is getting a few of their projected pennies of savings makes a mockery of the idea that there is an "American People" and that we are a "society" that share anything at all.
No, this sucks.
You're talking about marginal profits and not aggregate profit. The local government is making a deal which guarantees that the provider has a monopoly on the market. What's wrong with them negotiating a part of the contract which mandates a rollout plan to all citizens?
So, they have the right to say "NO" but they don't have the power to negotiate if they say "YES"?
Your "other business" comparison is generally ridiculous. Although you could probably come up with some parallels, these would be the exception. What other business has a barrier to entry like the cable and telecom industry? A more appropriate parallel would be giving a convenience store exclusive rights to the market in a particular town, and allowing them to refuse to sell to anyone that isn't within 20 miles of the town center.
Local control is best. We don't need the draconian FCC enforcing the will of the empire on every town and city in the U.S.
Your assumption is that others can enter the market. In the US, in most localities, both the physical phone and cable networks are monopolies, so you only have a single supplier for each. Until the service and the carrier are separated, this will continue to be a problem. Especially when the existing networks were built at taxpayer expense, and new systems would have to be built at cost.
The fair thing to do would be for localities/states/feds to divest the various companies of their physical networks, much as was done with electricity deregulation, which at least levels the playing field for everyone. After all, they were paid for with taxpayer dollars, so it only seems fair that the taxpayer owns them. That'd be us, btw.
The cesspool just got a check and balance.
Having lived most of my life in a rural area only minutes from a major metro area, I can tell you if it weren't for buildout requirements, I wouldn't have phone, garbage or power service. Utility companies are GIVEN many privileges when it comes to their for-profit business, such as easements through public and private property to run cabling. Do you really think anyone would WANT a string of 200-foot electrical towers going through their property? Of course not. But the government allows easements through properties for the GOOD OF ALL. In exchange for these privileges, the companies are expected to service everyone. Also, requiring these infrastructure providers to service every area helps promote growth of both residential and business areas. How quickly do you think an area would develop if the basics like power and data had not been provided for during infrastructure installs and upgrades? There are those who say this sort of situation fosters competition, i.e., some upstart little company will come along and service those who the big boys won't. That may be true in some areas, but not telecom. If a company says area A isn't profitable, so we won't service them, how will another company be able to service them without the profitable areas to make up for it? The answer: they won't be able to. That's why these buildout requirements were set up in the first place. The goverment was essentially saying to the providers, "Look. You have to analyze your profitability across the board, regardless of whether that two square miles at the edge of your service area are profitable in and of themselves." Every business has an area (or more than one) that is less- or even non-profitable. It's called the cost of doing business.
We have two kinds of companies offering broadband services, the cable companies, which have to offer service to everybody, and the phone companies, which only have to offer service where it is the most profitable. The most profitable place to offer service will be where it is cheapest to offer service.
The problem is, the phone company is allowed to set their prices based on the cost of providing service to a particular customer. If providing service toa customer is expensive, the phone company doesn't have to do it. The cable company doesn't have that option - it has to provide service to everybody. So the phone company drives down the price in the profitable areas, and the cable company is screwed - if they lower prices to compete, they still have to provide service to the unprofitable customers, and are eventually forced out of business because they arn't making any money. IF they don't lower prices, the phone company will just lower prices JUST ENOUGH to undercut the cable company, not really saving the cable company any money, while the cable company will probably have to raise rates for everyone because, now that they've lost their profitable customers to the phone company undercutting them, need to cover the increased per-customer costs of being saddled with only the expensive customers.
So, everybody loses - the profitable customers end up paying higher rates to the phone company because the cable company can't compete, and the unprofitable customers end up paying higher rates because they're not being subsidized by the profitable ones.
Now, I'm not saying that unprofitable customers should have the same rates as profitable ones - if you choose to live out in the boonies, that's your choice. But if we're not going to force phone companies to build out to everyone, then we shouldn't be forcing cable companies to do so either.
paintball
Rural communities already went through this with cable tv -- cable companies wouldn't put down the cable because it was too far away, and then when some communities tried to go with satellite TV instead the cable companies got a COURT ORDER forbidding them to do so because the cable companies had exclusive agreements with the states.
Profit is made off of these services because the companies that sell them want the services to be *indespensible*. Trying to market a service as indespensible while refusing to provide it to certain segments of society does not make for a healthy society.
So in answer to the question:
When a company decides to claim a monopoly on a service (and when you purchase a franchise from a community or state government you generally wind up having a monopoly in that area) then they have a responsibility to make that service available to all citizens. A monopoly is a different beast from standard business practices, because there are no other choices to make.
Eviscerati.Org: All Hail the Eviscerati
Please allow me to plug the open source mesh network project that I've been involved with. If the residents feel that they are being treated unfairly, they should just put up CUWiN nodes, and share to all areas in the city with minimal cost.
http://cuwireless.net/
Break the monopoly! Local governments want universal access? Then they should build it. Fund it through long term bonds like other infrastructure. Let ISPs, Telcos and Cable TV companies compete to provide service through the community owned fiber. Now you're not locked into carrier owned infrastructure. End of monopoly. Watch for the big companies to hate this as much as they do municipal wireless. Then you'll know it's good for the consumer.
I understand how someone living in a rural area might want build-out requirements for cable francising. But let's face it-- TV viewing and internet access are NOT phone service or electricity.
Living in rural areas with our current lifestyle incurrs a lot of societal costs in terms of pollution and infrastucture expenses. Rural development uses more land. Rural areas create more transportation costs, most indirect causes of which are born disproportunately by urbanitees. I could go on. In short, EVERYONE pays for those expenses, NOT just the folks living out in rural areas. It is not only unfair to ask urban dwellers to finance these inequities, it also creates an artificial incentive to develop rural areas and encroach on natural preserves.
It's bad policy. For phone and electric, I'm willing to hold keep my peace and underwrite expensive outlays to rural areas-- these are necessities, and I'm willing to take a hit so that other people can have those necessities. But to incurr those costs for entertainment seems a bit much-- particularly since for broadband and TV, viable alternatives do, in fact, exist. Sure, there aren't as many choices, but that applies to everything out in the country, from everything from stores to restuarants to places of worship.
Why should broadband/TV access be any different?
Who is RTFM and when will he help me with Unix?
If the telcos no longer have to service poorer or more remote or inconvenient areas, does that mean they will no longer receive Federal Universal Service Fund payments?
Does that mean I can keep my FUSF fees?
Of course not. Gah.
Unfortunately, both parties only support federalism and the 10th amendment when it suits their interests.
Here in Nashua, New Hampshire, I've heard the reason Verizon does not offer TV service along with their fiber optic Internet service is that the mayor is insisting on universal access until he allows the franchise (and conveniently preventing competition with Comcast). So I get my TV via a ugly Dish Network dish on my roof, and my Internet via the zippy fast Verizon fiber optic service.
This is not exactly pushing the limits of the bandwidth of the fiber.