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.'"

Comments

I'd hate to see it

[techpawn]

Analysts say the five-member FCC is split over the issue between Republicans and Democrats. One of the three Republicans, Robert McDowell, holds the swing vote.

I know it's too much to ask but can this be decided on merit and not on partisanship?

Re:I'd hate to see it

[gurps_npc]

There are only a few things that governments are asked to rule on:

1. Things that we don't know any answer to. Here, there is no merit, just partisanship arguing about which of several proposed hyopethical fixes we should attempt.

2. Things that we know the answer, but it is too expensive to do without sacrificing other things of value (which could mean effort/privacy as well as simply expensive in cash). Here, partisanship again determines what we do, because while we know what to do, some are willing to spend the effort/cash/privacy others are not and the decisions about it being worth it or not is at the heart of the difference between the two political sides.

3. Things we know the answer to, it is not too expensive, but the costs are born by people other than those who benefit (and the those people have political power to fight the change). For example, Tobocco industry fighting against taxes and regulations. While 'partisanship' is not inherenent in this case, generally the entrenched interests will frame their lies to appeal to one side, over the other.

4. Things we know the answer to, is not too expensive, and no entrenched existing side supports the problem. These things get done immediately, with no partisanship. They also tend to be obvious and small (remember, they must be relatively cheap).

This particular question is a mix of type 1 and type 3 questions. The existience of ignorance makes it dificult for merit to solve the issue, and the lies of the industry are focused on Republicans, beause of a general pro-business reputation (not really earned in my opinion) of Republicans.

Good

[BlowHole666]

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.

Re:Good

[mtp85]

My prediction is that we all get cornholed. Laying out new infrastructure (especially in a country as large as the U.S.) is a massively expensive proposition, and that significantly tips the scales in favor of the behemoth companies like AT&T. This is just as true for the core 'net infrastructure as it is for last mile lines, where consumers have their choice of oligopoly to patronize. Designing new technology is not going to stop market forces from working against progress.

Re:Good

[Mr. Slippery]

In essence Sprint is just a reseller of at&ts' product. Let them come out with their own product to compete.

AT&T got all kinds of subsidies and grants of right-of-way to build their infrastructure. The theory was that this was in exchange for access.

Re:Good

[laughing rabbit]

I wonder though --

As I watch roads being widened, the utilities are relocated, new and often better quality lines are strung, storms take out huge swaths of utility lines that are replaced under disaster area declarations, new developments are built that require service where there was none, and such; I ask -- how much taxpayer funding provided these upgrades? Upgrades that a private company profits from. Upgrades or additional subscribers that they would not have taken care of otherwise.

Does anyone know the answer?

Re:Good

[bevoblake]

Unfortunately, companies need money to finance technology research. Sprint has already "bet the farm" on WiMax, which, if it doesn't work out, will put them out of business. So, they've already put their money where their mouth is to try to use technology to solve their problems and don't have any additional financing to re-create a fiber grid.

When you break it down, AT&T is suspiciously close to using monopolistic practices to defeat smaller competitors. As AT&T was once a government-created monopoly, the government should've done a better job policing their push back towards monopoly status. Unfortunately, our current administration uses a very light hand when it comes to enforcing anti-monopoly laws (I'd reference the way the Justice Dept backed off of Microsoft and the way they've let AT&T acquire everyone they want).

Monopolies almost always result in less efficiency in a market.

Of course, when I own both Park Place and Boardwalk and put up hotels, I'm not going to cut you any deals either.

Re:Good

[Volante3192]

Maybe more fiber being laid,

Therein lies the rub. FTTP is simpleish compared to tearing up streets like Wilshire in downtown L.A. and laying down new fiber.

IMO, the best solution would be to strip AT&T of all services, leaving them with just the fiber, so they don't have conflict of interest carrying both the lines and the services on the lines. (Note: We could also strip the fiber from AT&T making a new company, the end result is one company manages the lines...like a utility.)

Re:Good

[Kadin2048]

You would have a point if this was an industry where the barriers to entry weren't so astronomically, prohibitively high.

Telecommunications requires so much capital investment that it tends towards a natural monopoly, at least within regions, dominated by whoever can get there first and run the wires around. Once that first person is there, much of the impetus to repeat the investment is gone.

Due more to some interesting historical/technological developments than any real forethought, some people happen to actually have two sources of telecommunications, one run by the phone company any one run by the cable TV company. This sort of parallel infrastructure buildout is unlikely to happen again; in fact I think it may actually decrease: one company or the other will decide to expend its resources in areas where the other company isn't, meaning that if you want really good, high speed service, there will be a clear choice even if you have two wires running into your house.

And really, it doesn't benefit most consumers to have two halfassed networks coming into their house. You're probably only going to be able to easily use one of them (at least one of them, per service, but those services -- TV, phone, data -- are quickly becoming one "packet data" service anyway). Two companies forced to lay parallel infrastructure are always going to have higher costs and worse service than a single company, because of the extra overhead they carry, if (and this is a non-trivial 'if', granted) the single company is forced to offer service at cost, rather than being allowed to increase it.

Even in minimalist conceptions of government (which I am generally a fan of), there is a legitimate function for the state when it comes to the regulation of natural monopolies. Although I'm not advocating for state-run telcos -- although they may look good on paper, history has shown that state-run industries generally suck terribly -- the way things worked in the U.S. from deregulation to a few years ago (thanks, George!) was that the first carrier to build-out in an area, in return for using the public rights-of-way, had to share the infrastructure with other firms basically at cost, or at low negotiated rates (e.g., "Local Loop Unbundling"). Since this system has been undercut by the telco drones at the FCC, connectivity costs have gone up far in excess of service offered, and competition has diminished.

Re:Good

[p0tat03]

I've always wondered why the government can't own the fibre like they do the roads. Like road tolls, people must pay a certain fee to the government in order to use these pipes, which may be included into the price of their internet service. Providers can maintain and expand the network, and money spent doing so can be applied as a toll credit (i.e. if AT&T spends $2bn expanding the network, then they can get an equivalent break on gov't line tolls). This way companies are not penalized for building up the infrastructure, while maintaining competitiveness for smaller players.

Here in Canada (Ontario only, actually), our DSL providers are forced to rent out their lines at government regulated wholesale rates. This has encouraged the growth of small ISPs that provide excellent service for less cost. I myself pay $20 CAD a month for service that Bell charges $50 a month for, and I get better phone support to boot.

IMHO this should also apply to the wireless spectrum. Stop auctioning these things off and simply charge tolls for any provider to use your network. A per-device-per-month scheme would work well.

Re:Good

[russotto]

Satellite internet sucks because the speed of light is too low. I don't see anyone getting around that any time soon.

Re:Good

[mtp85]

A satellite in geostationary orbit is far enough (35,786 km) from the surface of the Earth to introduce measurable latency, even when your signal is traveling at the speed of light. That is the GP's point.

Welcome to America

[hellfire]

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...

The small companies are the regulation

[dave562]

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.

Poltical grabass

[evann]

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.

Re:Poltical grabass

[zerocool^]

And the simple answer is socialize bulk data transfer. Build a government telco-hut in every city in America with 30,000 or more people. Run huge-ass fiber pipes everywhere, in star topology radiating from all the major cities, bigger pipes in larger cities. Put hubs in NYC, Boston, Washington DC, Atlanta, Tampa, Dallas, Memphis, Chicago, Denver, Vegas, LA, and San Jose, with leafs out from there. Peer with MAE-East and MAE-West. Make it government-owned, and charge everyone the same rate, regardless of the size of their company. Also have everyone sign an agreement saying that by buying access to this superexpresshighway, you agree to route traffic according to BGP rules for anyone on your end of the network.

Problem solved, and we can finally get that 100Mbps internet for $10/month like the Swedes have had for several years now.

~Wx

You Know It

[MightyMartian]

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.

Wholesale vs retail

[cdrguru]

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.

Re:Wholesale vs retail

[enrevanche]

The prices that ATT charges competitors is profitable to ATT. This is just a big smoke screen. They actually want to eliminate competition so that they can raise prices in a less competitive market. The fact is that ATT has an artificially created monopoly on the last mile. The fact is they manipulated the government in the 30s and 40s to create the monopoly. This is not a market that is easy to make competitive. It requires regulation because we have only two choices (at most) for physical connections to the end user.

If they get what they want, they will eliminate all but the cable company. The US will have the worst (if it doesn't already) broadband of any developed country (including those with lower population density.)

ATT only paid for a portion of the infrastructure that they own, most of it is paid for when new construction while it was put in and the government. It was paid for by high consumer prices made capable by their monopoly position. They government handed it to them. They bribe elected government officials with campaign and other donations. They manipulate, they misrepresent etc.

The real reason they won't effectively compete is because they have dreams of re-realizing the near complete monopoly position they once had. How do you think they got the government to allow all of these mergers and re-mergers. This is not for competition. But they will call say it's for "competition".

I suggest you stop complaining about it and

[shelterpaw]

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.

How is this allowed?

[SonicSpike]

Where in the Constitution is Congress allowed to regulate communications?

Re:How is this allowed?

[Scudsucker]

Well, lets see. There's the venerable Commerce Clause, and these lines run across state lines. Then there's the fact that the lines are run across public land and private land through the use of eminent domain. If the telecos don't want regulation, first they can give back all the subsidies they were granted to build the infrastructure in the first place. Then they can start paying rent on the land they use. But somehow I doubt AT&T will start cutting me checks anytime soon.