SCOTUS To Hear Small ISPs' Case Against AT&T

snydeq writes "The US Supreme Court has agreed to hear an antitrust case that alleges AT&T squeezed out small ISPs by charging too much for wholesale access to its phone network. The case, originally brought to US District Court in 2003, had been appealed to the US Court of Appeals for the Ninth Circuit. But AT&T requested the case be heard by the Supreme Court on the grounds that prior conflicting appeals court decisions in this area should be resolved at that level. As part of the case, the Supreme Court will likely also ascertain whether AT&T could be held to violate antitrust law without setting its retail prices below its own cost."

Comments

SCOUTS?

[crimperman]

There's a theory that people can read words correctly just as long as the first and last letters are correct.

On that basis.. anybody else read the headline as "Scouts To Hear Small ISPs' Case Against AT&T"?

Ownership of the network

[Kenz0r]

IANA US Citizen, so I only have a limited understanding of how you handle things over there. But I think things like a telephone network should not be privately owned. Shouldn't the US government have invested in laying telephone and network infrastructure, and then lease it out to telco's? Then there could have nice fair competition, which would be good for the customer, right? What happened down here in Belgium, is that the government used to own the telephone network, but then partly privatized the phone national company, which now owns the entire network and sells access to smaller companies (similar to the situation described in TFS). Down the line, it's us customers who get overcharged and get really crappy DSL lines.

Re:Ownership of the network

[NovaHorizon]

And the reason they are allowed to do that? They can't be expected to just hand over their business to competitors.
What I mean is the following situation is completely unrealistic; what will be claimed in court; and Why they can do this to you.

Assume They have a cost of $30/month per DSL line.
Assume you resell your line at $50/month.
Assume your package of tech support quality, email addresses, special features, and customer care were all so grossly superior in 'likability' that all of SBC's customers flocked to you.

Yes, they still make $37.99/month per customer you have.. giving them a profit of $7.99/month per customer(minus expenses). You on the other hand, are gaining 11.99/month per customer(minus expenses).

After a while, it's expected that you may attempt to buy them out to get your cost down by $7.99/month+their expenses(as it would be an unwanted redundancy) further.

It could be considered over jurisdiction of the U.S. Government to force them to maintain their profit margin as lower then the profit margin of those they are whole selling to

Re:Ownership of the network

[tgd]

Sorry, thats incorrect. Telcos almost universally lease that space from power companies, and they pay for it. There are some rare cases where the telco owns the poles or right of way, but they are very rare. Long haul runs are often, if not almost always, done using leased space from owners of train lines.

If you, as an ISP owner, wanted to lease space on those poles and run lines, you could've. There's some big companies like, say, Comcast that did it.

Re:Ownership of the network

[anwaya]

Telcos almost universally lease that space from power companies [...] There are some rare cases where the telco owns the poles or right of way, but they are very rare. Long haul runs are often, if not almost always, done using leased space from owners of train lines.

Not entirely correct.

SPRINT = Southern Pacific Railroad Information NeTwork. Used rights of way along the railway network.
MCI = Microwave Communications, Inc. Used Microwave for its backbone. Now part of Verizon.
WilTel = Williams Telecommunications. Ran fiber through decomissioned gas (not gasoline) lines. They've done this twice that I know of: one network was sold to MCI, another to Level 3.

These rights of way have been provisioned to carry enormous amounts of traffic.

Re:Ownership of the network

[Anonymous Coward]

AT&T laid out the telephone network in the United States for the most part, not the federal government. It's been that way for over a hundred years. Why should some fly-by-night ISP get sub-retail prices on AT&T's network that they poured their heart into building? It's not like taxpayers had anything to do with it.

Re:Ownership of the network

[Lumpy]

Yup I can also attest to the Above. In the mid 90's I also owned a medium sized ISP in michigan. When 56K became popular and we had to move from 28.8 (we had working 33.6 lines, but then magically the line speeds dropped fast to 28.8 and they would not explain why.) to 56K the Telco I had to deal with gave me prices on the T1 lines that would support 56K dial up channels at a $3500.00 a month rate AND had a fee of per minute charges on incoming and outgoing. It would have forced me to up my rates to almost $30.00 a month from the $19.95 I was charging. Lots of other local ISP's DID up their rates which allowed me to run an extra year at 28.8 speed at $19.95 a month and then we ran the last year at $15.95 a month while I was negotiating selling my customer base and business to earthlink.

The moment you told them you were an ISP or were looking for ISP dial up services, they started treating you like crap. My POP for my internet connection was down near the indiana border because the local Telco's prices were insane and I was lucky enough to have found a backbone ISP that had a decent rate, I paid $2500.00 a month for my T1 line and T1's worth of bandwidth..

"Cost"

[mother_reincarnated]

the Supreme Court will likely also ascertain whether AT&T could be held to violate antitrust law without setting its retail prices below its own cost.

That might be because they [were/are] a [monopoly/oligopoly] whose network was largely built at public expense and 'their cost' is a calculated 'average cost' when the rest of the world gets measured by marginal costs...

Remember that the world of RBOCs has a sky of a completely different color.

Two words

[oDDmON oUT]

Telecom Immunity

Granted it's not passed the Senate yet, but you can bet your sweet patootie it will, and should SCOTUS miraculously find in favor of the ISPs some slick lawyer will find a way to make it apply here.

After all, those small ISPs were probably run by terrorists, or sympathetic to them, or .... something.

So we need to look beyond the courts.

[RustinHWright]

A lot of how they do this is because of the chowderheaded we way approach infrastructure in the first place. If we did was what some corporate campuses do and put in service tunnelswith the kinds of raceways every sysadmin on the planet knows how to access, they would lose a hell of a lot of the control they now exercise. This is about "last mile" b.s., it's about lack of transparency about technique, and it's about our relentless shift away from the envisioned network architecture of the internet to a backbone and subnode topology that puts all the power in the hands of the people who control the backbone.

A.) We need to start building service tunnels, even if only one street per city at first.

B.) We need to start building a mesh network of wireless nodes that are then owned by nobody at all. (Make a node out of a cantenna, an old PDA, and a solar panel, duct tape it to the side of building, walk away. Maybe even make tiny nodes and stick them under the seats of city buses.)

C.) Eventually we need to look at the technologies made better by the N Prize and start bloody well launching our own damn satellite network.

I, for one, do NOT welcome our new familiar overlords and am working on a regular basis to route around them. How about you?