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Telcos Want Big Subsidies, Not Line-Sharing

Posted by ScuttleMonkey on from the give-us-money-and-leave-us-alone dept.

It seems that a recent survey of global broadband practices by Harvard's Berkman Center at the behest of the FCC has stirred the telecommunications hornet's nest. Both AT&T and Verizon are up in arms about some of the conclusions (except the ones that suggest offering large direct public subsidies). "Harvard's Berkman Center study of global broadband practices, produced at the FCC's request, is an 'embarrassingly slanted econometric analysis that violates professional statistical standards and is insufficiently reliable to provide meaningful guidance,' declares AT&T. The study does nothing but promote the lead author's 'own extreme views,' warns a response from Verizon Wireless. Most importantly, it 'should not be relied upon by the FCC in formulating a National Broadband Plan,' concludes the United States Telecom Association. Reviewing the slew of criticisms, Berkman's blog wryly notes that the report seems to have been 'a mini stimulus act for telecommunications lawyers and consultants.'"

9 of 340 comments (clear)

  1. I see what they did there... by EndlessNameless · · Score: 4, Interesting

    Free money, no mandates. This sounds like the initial Bush stimulus package, so it's entirely without precedent.

    If their development is going to be subsidized with federal funds, they damn well better open those lines. And they should be required to meet coverage quotas if they want any of those rural development funds.

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    According to the latest ruleset, this post should be modded as Vorpal Flamebait +5.
    1. Re:I see what they did there... by Zerth · · Score: 5, Interesting

      We already did that once and I've got relatives that still only get 9600 on dialup, no chance at DSL, and they live in a town with 1200+ people/sq mi, if only 10,000 or so people.

      They'll take the money, kick out a fat dividend, and then spin off a paper company with the responsibilities, destined to fold.

    2. Re:I see what they did there... by mcgrew · · Score: 4, Interesting

      Well, with my experience with the utilities in Illinois, I'd say let the municipalities run the utilities. Springfield's CWLP (whose manager bears an uncannily striking resemblance to Mr. Burns) is owned by the city. We have the lowest rates, the best customer service, and the least downtime of any electric company in Illinois.

      When two F2 (almost F3) tornados ripped right through my neighborhood in March, 2006, completely destroying the electrical infrastructure, we had power within a week. The telcos and cable took a month to get service restored, and they didn't even have to plant new poles.

      Later that spring (June IIRC) a weak F1 went through the St Louis area. I visited my friend in Cahokia, who has the privately owned Amerin, and the damage was minimal. I didn't see a single line down or broken pole. But he was without power for a month.

      Private utilities are not beholden to their customers; only to their stockholders. It's not like you can take your business elsewhere. Publically owned utilities are beholden to their customers; bad electric service loses an election for the Mayor. He IS accountable, Amerin's CEO is not.

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    3. Re:I see what they did there... by nine-times · · Score: 4, Interesting

      I live in NYC and the phone company won't even provide broadband. I can get Internet from the cable company, but Verizon says neither FIOS or DSL are available in my area.

      That's in the country's largest city. The idea that internet sucks because our population density is too low is absolute hogwash.

    4. Re:I see what they did there... by FrigBot · · Score: 4, Interesting

      We used to have a good utility system in Alberta, until the conservative government of the past decade or so started to privatize the utilities. Now, the quality of service has generally gone down, while prices have gone up. The idea was that by introducing competition, that the oposite of what I just described would occur.

      Oh, there's competition now alright - yesterday my 84-year-old next door neighbour told me about a phone call she got from some unknown gas company trying to convince her to bundle gas and electricity into some contract-based plan. She asked them to send an information package, and what they did was sign her up, and send her the info. Fortunately a bright relative of hers sent a letter to the company and straightened it out, removing her from their list. Things like this happen all the time now. I even heard that when the AB government was considering de-regulation of electricity, the state government of California warned them not to do it, citing the awful experience they had with the same experiment in the late '90's. But then, this is Alberta and we don't listen to reason.

  2. Re:I for one, by PizzaAnalogyGuy · · Score: 4, Interesting

    There are, however, several things to consider especially when it's about telco's.

    Lets say you've ordered a pizza delivery guy to bring you a big fat pizza with some coca cola, because frankly you've a little bit hungry. But what will the pizza delivery guy do if you're mean to him? That's correct, he will not give you the pizza. You might try calling a different pizza place, but you're out of luck if your area doesn't have one or they're already closed after 9pm.

    It's basically the same thing with telco's. Only way to change that is to get government to do something about it.

  3. More competition needed by Maximum+Prophet · · Score: 5, Interesting

    Verizon notes, open access and unbundling would be a bad policy for the United States, largely because of the rural nature of much of the country. "The problem in these rural and low-density areas is that they have been unable to attract even a single entrant," the telco argues. "Imposing unbundling will not only fail to solve this problem, but will only make things worse: if the economics do not currently support a single provider, they are even less likely to support multiple(and potentially an unlimited number of) providers."

    I'm not sure that you can have worse service than no service. There are many areas that only allow one (or a few) providers. If that one provider chooses not to give service to a part of it's service area, those people are screwed. Maximum innovation will come from maximum competition. It's called capitalism, but it always seemed to me that capitalists usually want the least amount of competition possible.

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    1. Re:More competition needed by dkleinsc · · Score: 5, Interesting

      Why not more regulation?

      Telecom is by all appearances a natural monopoly, like other utilities. If you take AT&T and Verizon and break them up into little pieces, in about 15 years you'll be right back to where we are now in this market. We know this because we tried breaking up Ma Bell, and within about 15 years we were back to an oligopoly (and probably would have been back to a monopoly had the FCC and FTC allowed it).

      The ways to handle utilities, in order of my preference at least, based on the experiences of residents where each of these are applied:
      1. Publicly owned and operated: This isn't perfect, but by all appearances can do a really good job. When was the last time you thought about your municipal water and sewer service? That's the sign of a well-run utility.
      2. Heavily regulated monopoly: This is the electricity market in a lot of places. Again, far from perfect, but customers generally aren't bilked and service is usually pretty decent.
      3. Less regulated oligopoly: This can be decidedly unpleasant if the various players realize that they can earn more by both of them bilking their customers rather than trying to take market share away from each other. The regulations can help prevent problems, but are generally less extensive than the regulated monopoly.
      4. "Free-market" free-for-all: Think California during the electric deregulation. This typically is really an unregulated oligopoly.
      5. Unregulated monopoly: Standard Oil et al. Typically, the monopoly makes a huge bundle of cash while all the customers (who often have little choice but to pay) get bilked.

      Right now, telecommunications is sitting at option 3. AT&T and Verizon would both love option 4, and whichever one is capable of buying out the other would really really like option 5, but for the purposes of serving customers you're typically better off with option 1 or 2.

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  4. Re:Fascism, DUH by mcgrew · · Score: 4, Interesting

    War and weapons define the American economy. Boeing and Raytheon and Xi could be considered the ultimate achievement of which a fascist society is capable.

    When I was a child, President Eisenhower warned of the "Military Industrial Complex". Apparently we didn't heed his warning.

    We should abandon this socialism

    Corporatism is NOT socialism. Socialism is the polar opposite; socialism tries to make a better society (usually failing, however). It is facism, though. What kind of people rail against giving welfare to the poor but have no problem giving it to the rich?

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