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FCC Weighs Net Access Charge Decision
An anonymous reader writes "The FCC is considering a request from AT&T to lift restrictions on the types of charges they can level against competitors that use their infrastructure. The organization had previously allowed that for Verizon by virtue of a deadlock, and Ma Bell now hopes to see similar treatment. 'All the requests have been strongly opposed by smaller rivals such as Sprint Nextel, Time Warner Telecommunications and XO Communications. These competitors argue that they have few alternatives to get access to the high-speed lines they need, and are being charged more and more by the dominant carriers.'"
Ask not what you can do for your country. Ask what your country did to you
You may think this is a bad thing because the cost of internet service may go up. However if companies like Sprint/Nextel have to pay more for the use of AT&Ts' lines maybe this cost will either put them out of business (not the goal of my post) or give them the boost to design new technology and make the market more competitive.
In essence Sprint is just a reseller of at&ts' product. Let them come out with their own product to compete.
I am in no way picking on sprint. I am just saying a little competition in this area is a good thing. Maybe more fiber being laid, better service, higher speeds, and new technology will come of this. OR we could all get corn holed by higher prices.
I smoked pot once. But I DID NOT inhale. Will you hire me?
If they stop regulating it, then the smaller companies will likely have to raise prices to cover the higher expenses.
Someone save me from this sanity.
I know it's too much to ask but can this be decided on merit and not on partisanship?
You must be new to this country...
"All great wisdom is contained in .signature files"
The small companies are the ones that are keeping the major carriers from gouging the end user. They are able to resell the product at a lower price which keeps the major carriers honest. It is true that they don't offer anything different than the major carriers. I don't see that as being a bad thing. By offering the same thing and doing it at a lower price, they keep the market competitive.
The cost of the internet services WILL go up. All these companies do is pass along the costs to consumers. Lay new fiber? Long term maybe, but why the hell should we keep having to pay more and more to monopolies. Why should new lines have to be run for every company trying to compete in the market? U.S. already pays too much for cable and internet services. The fact that the voting is split between Rep/Dems should tell you that the committee cannot think for themselves anyway.
Communist Zonk. They should have no restrictions at all. Then again, according to Communist Zonk everything should be like Open-Sores and Communism. By the way go ahead and flame away, mod this comment down, or ignore this comment. By doing any of those you will prove just how right I am.
I have every confidence that the FCC will sell out the consumer. Their sole purpose, and the sole purpose of the US government, is to keep the money rolling in for big business.
Let the FCC completely fuck over the communications industry. At some point someone will have to step in, cut AT&T into pieces again, rejig the process so that consumers aren't getting fucked due to the whores in Congress and the FCC taking it up the ass for Big Telco Inc.
Of course, that too will change as a new generation of political whores get into Congress and again sell out the only people that they should actually even consider to Big Telco Inc.
The world's burning. Moped Jesus spotted on I50. Details at 11.
Is this going to be Ma Bell 2.0?
~S
Regulating prices may seem like a good idea at first glance - but forcing the telcos to let competitors share access reduces investment in upgrading facilities that need modernization.
This op-ed in the Washington Times today does a great job explaining why regulating special access would be a bad idea. http://washingtontimes.com/article/20071011/COMMENTARY/110110009/1012
The Progress & Freedom Foundation recently published an empirical examination finding a positive correlation between flexible pricing and incumbent investment. The report reaffirms what economics tells us: lower profit potential in a market segment means less investment. Somebody has to be willing to throw down some serious cash to increase the bandwidth of central office. But incumbents tend to divert resources to more lucrative ventures if CLECs can reap the benefits without taking any of the risk. Sure, CLECs have to pay wholesale prices plus rate of return, but there's no risk in that proposition-except for the incumbent. Phone companies allocate the most resources to areas where the FCC does not regulate prices.
There is real competition in the market for high-speed internet access. Business cable, DSL, satellite internet, 3G, fixed wireless, and now 4G/Wi-Max all compete with T1 lines for workplace connectivity. These aren't perfect substitutes yet, but they keep getting better as DOCSIS 3.0 starts to be implemented and wireless broadband gets faster and cheaper. The upcoming 700mhz auction will mean even more growth in this area.
The FCC is making the same mistake the FTC made with the XM-Sirius merger, or the Staples-Office Depot merger. Just because the market for a specific product may have 1 supplier doesn't mean its a monopoly-as long as substitutes exist, there will be price competition.
Phone service isn't a natural monopoly anymore. The duplicative cost of having multiple carriers is tiny nowadays compared to the massive welfare gains from competition. And if phone service really is a natural monopoly, why does the FCC need to insulate telcos from competition? Shouldn't the market gravitate towards 1 supplier without government intervention? In 1934, under political pressure from AT&T, the FCC began its disastrous policy of enforcing monopolies on telephone service. Ma Bell successfully lobbied Congress to entrench its monopoly status because upstarts were doing such a good job competing, so profit margins weren't as large as AT&T had become used to. Imagine a world where people had real choice for TV, phone, and internet. Franchising and universal service would have to be eliminated; but in this day and age if people want to live in rural areas, why should the rest of us have to suffer?
I wish all these fuckers would go away. I'm sick of taking it in the ass by Verizon and AT&T. I work for a small non-profit ISP and you'd be amazed how much business we get because these yahoos keep jacking up prices for no benefit but to shareholders. So, I say open up the 700MHz spectrum to all and lets shove these bastards out of business for good.
Pax Vobiscum
What the telecom infrastructure owners are currently faced with is delivering services to competitors at rates which allow their competitors to underbid them for identical retail services. This grew out of the 1984 breakup and was seen as a way to introduce competition into telecommunications.
It has been somewhat successful in that goal, but it isn't any sort of solution. What it has forced has been the continual degradation of customer service from the ILECs because the only way they can compete price-wise is by cutting non-essentials. Customer service was the first to go. Installation and physical plant maintenance was next.
It as if you had a car dealer that was required to sell cars in bulk at a substantial discount to other car dealers who could then turn around and sell these cars to the public for less than the original dealer could afford to. The original dealer would be forced to cut prices to match and cut services to continue to be able to afford to keep up. Mandating the bulk sales to introduce this artifical competition is absurd and just creates a race to the bottom where everyone is competing on price and everything else is sacrificed. This is exactly where we are today.
Yes, I have the option of choosing telephone service from a variety of different retailers. All of these retailers are using the same infrastructure owned by the ILEC, in my case Qwest. Qwest has awful customer service and is doing a lousy job of maintaining their physical plant. But the structure of this deal ensures that no competing physical plant will ever be built. Why would it when you can lease access at a discounted rate that is far, far less than what it would cost to build it? Or, as Qwest is discovering, even maintain it?
I used to be under Ameritech/SBC. Same problems. I could get a T1+phone+data from a "competitor" for for less than I could get the same number of phone lines from SBC. Why? Because SBC was required to lease out the infrastructure at below-cost levels.
Where does this artifical nonsense of "competition" end up? Well, nobody is building, improving or replacing physical plant except in unusual circumstances. Verizon has apparently discovered that if you run fiber all the way that you no longer have to lease out the infrastructure. That apparent loophole is all the reason needed to replace the copper with fiber. I do not believe there are solid figures for maintenance cost but I would suspect that buried fiber is substantially more expensive to maintain than buried copper in the long run. So if Verizon has to lease out the fiber at less-than-cost levels as they have to do with the copper you can expect fiber to go unmaintained and to stop running fiber. I can't imagine the loophole lasting very long and I would not want to be orphaned with fiber that nobody wants to maintain.
There is the usual sorts of comments about how the infrastructure should be publiclly owned. Sure, look at some other countries where this has been the case. The difference is that the original infrastructure was built by the government, not nationalized by the government. The US has never nationalized anything that I know of and it is highly doubtful they would start with the telephone network. I don't see that happening. Nor do I believe it would be in anyone's best interest.
So where could competition come from? It is difficult to say. The current artificial competition is very destructive and has created no real competitors but a bunch of leeches. Just as with a leech, if the host (the ILEC) the parasite dies. The real solution to this would be to have competing infrastructure - the ILEC has the copper and someone new runs fiber. Unfortunately, anyone owning physical plant today has to be prepared to support the army of leeches that would come forth. So why would anyone build physical plant today if they have to share it and probably share it below cost?
This isn't competition. It is a suicide pact. If an ILEC folds, everyone loses and we all get to discover there isn't any "competition" at all.
do something about it. I wrote the FCC this morning pleading my case as why they should not relax regulations. I explained the lack of service and choices currently available. I went a step farther by asking them to reevaluate the ownership of tax payer funded lines and lines which reside on public/government property. Wether what I wrote makes a difference in their decision making or not, I at leased voiced my opinion.
FCC: "If you raise your rates, why wouldn't your customers switch to a competing service?".
Expected answer: We anticipate that our competitor's would have to raise their rates accordingly due to cost increases in providing the service.
FCC: "Who is your competitor?"
*Crickets*
FCC: Thank you.
Out of modpoints but really liked a post? 1BDkF6TtmmeZ3yqXbz9yhdYVqRYnwFoXDj
Pay your urban elitist fair "free market rates" share for your piped in water stolen from the owners in the rural areas, and for the transportation of the food grown in rural areas brought to you over the publicly funded roads and for the electricity that comes to you from powerlines over rural land, where not a single penny is given to the rightful owners of that property, and maybe the rural folks would have enough money to be "rich consumers who matter", and could afford to attract some "investors" to put in better copper or fiber. Scratch that, if it was setup that way the rural folks could just pay cash out of their pocket change for any sort of internet.
Either stop with the hypocrisy and go all the way and return rightful ownership of the lands and resources to everyone-no more seizing or eminent domain in other words, not for anything,not for roads, water pipelines or even the water itself, electric lines, natgas lines, anything, tollroads and freemarket negotiated access all the way, boundary to boundary, and let the so called free market rule, or accept that some infrastructure does a common good and should be shared. One or the other, make up your mind.
Where in the Constitution is Congress allowed to regulate communications?
Libertas in infinitum
Your question reminds me of something I heard being discussed when I used to live in L.A. People were talking a lot about the continual expansions of the suburbs, how more and more people were moving out of the city to get away from the high rents, so they were building up more and more along the outer edges. However, all of those new buildings required new infrastructure - new roads, new water pipes, new electric lines. The concern was that in building all of that new infrastructure, it was cutting away from the city's budget to fix the current infrastructure already present in the older areas of the city, and thus a lot of older, poorer residential areas were getting the shaft. I'm not sure how fully relevant that is to your idea; it was just a topic that came to mind.
Libertarians somehow believe that private businesses should be stronger than governments but weaker than individuals.
ATT is not really "Ma Bell".
Calling it that obscures a bunch of
unfortunate history.
Had the state not been so absolute in its power, and unquestioned in its judgement, then these monopolies would've had a LOT of small players armed with both skill and arms (when skill in the market place fails) who could've cleaned house.
"would have had to deal WITH"
Made a mistake there typing fast.
Laters, gotta run.
" What luck for rulers that men do not think" - Adolf Hitler