Open Letter to FCC Chairman Powell 298
Adina Levin writes "An open letter to FCC chairman Michael Powell signed by internet and tech industry pioneers explains why the government shouldn't prop up the ailing telecom behemoths. Telecom companies bought expensive network technology with long bonds. That technology has been made obsolete by gear getting faster and cheaper all the time by Moore's law and Metcalfe's law. The telecom companies are asking for the equivalent of a bailout for their investments in sailing ships after the advent of steam. The way to speed the deployment of broadband to homes isn't to prop up businesses based on old technology, but to let uncompetitive businesses 'fail fast', and let new competitors play."
Signed by Tech Industry Pioneers????? (Score:2, Interesting)
Can we add to the letter? (Score:3, Interesting)
1. Reverse Deregulation. Ever since deregulation occoured, our bills (phone, cable, et al) have doubled, and in some cases tripled.
2. Bring webcasting down to a tolerable level. The fees webcasters have to pay are just insane. How about listening to the people instead of just these big businesses who want to squash the small-time communications industry? It does fall under communications, after all...
3. Lay the smack down on the RIAA and MPAA. Please refer to #2. Originally, the two were created to oversee standards. Now they want to limit fair use and basically rule the industry? That's what happens when too much power is allowed to run rampant.
4. Free the Internet, or at least bring it down to a cost-effective level. We're paying entirely too much for something that could help advance all people. Why should the less-fortunate not be able to afford access?
5. This one's personal. Make MTV change it's name. It's not music television anymore, so why not change it to C(rap)TV. And for those who care, I'm not knocking rap. Just the crap (Real World, Road Rules, Jackass especially) that they put on that god forsaken channel...
Yeah, I'm asking alot of an inept Federal juggernaught. But hey, why not at least try, right?
'Little' people would suffer the most (Score:4, Interesting)
This is where the government bailout would help, by allowing access to areas that would be under-served, and allow time for solutions to that problem.
Jeez, pretty hefty rant this early on a Tuesday. Must be fear of sniper-related traffic in DC.
Economics (Score:5, Interesting)
Short Term Impact (Score:5, Interesting)
This 'Open' letter (Score:3, Interesting)
We need to remember that the internet was designed to be able to communicate with defense authorities during times of national strife, as in nuclear war. It shines because it is nearly impossible to kill all the telco communications capabilities at once. Old, yet trusty technology. Just look what YOU are doing with this technology today!
Bailout (Score:5, Interesting)
Result: their economy has been stagnant for a decade.
Let's hope the govt. has learned from their mistakes.
Traditional telcos aren't going bust (Score:5, Interesting)
It's precisely the next-gen telcos (CLECs, ISPs, xSPs) who invested in the new IP technology that ran into the boom/bust and are struggling or going bust. WorldCom is something of a special case - it had a lot of legacy technology that should have tided it over, but the accounting shenanigans were too much to survive.
This doesn't mean that IP-based networks are a passing fad, though - all that's happened is that the pioneers have gone through the normal bleeding-edge live/die cycle. Some of them have made it, some have gone bust, and all the old-line telcos have adopted the same technologies.
I agree that failing telcos should normally not be propped up - as long as someone can step in to maintain services by buying up their assets, particularly local loops that are hard to recreate, the customer shouldn't notice that much interruption. My problem is with the analysis that the legacy technology is why telcos are going bust.
Let the Baby Bells compete (Score:4, Interesting)
Why are the Bells forced to lease out their DSL connectivity to other companies at below cost? Does this really spur investment? The reason that most people do not have access to DSL is that the Bells will NOT invest until they are allowed to compete against cable companies DIRECTLY
Do cable companies have to let the telcos use their cable at below cost?
What will happen to the parasites (CLECs) when the hosts (Bells) die?
Deregulate the Bells and let true competition take hold. You will not regret it, Mr. Powell
Re:Legitimate reason for bailout? (Score:3, Interesting)
Economic 'proofs' aren't worth the paper they're written on, which is why the Nobel Prize for Economics is a joke. They may as well have one for psychology as well.
The Nobel Peace Prize is ludicrous as well, but that's because it's given as an encouragement prize... maybe Arafat could give his back now, for example. Oh, and because a Peace prize funded by the estate of an explosives developer seems... erm... inconsistent at best.
Re:Security of Internet-based phone system (Score:3, Interesting)
Dial up modems can have a huge amount of security (dial back and wierd tones pairs come to mind.. hey we use both here!) I can make a dial up system that will keep out any cracker that has even good skills. and this isn't even the computer asking for the password... they cant even get past the modem it's self unless they social engineer enough information to hijack the phone numbers the modem automatically dials-back to. (Only 3 of them.) and then the cracker needs to modify his modem to use a different set of signalling tones.. either by hardware hacking or by social engineering me directly.
or the cracker can tap our private t1's and fiber connections to try and break in...
but only an idiot would put a critical or important system on the internet.... the worries in the parent post are unfounded unless the telcos are staffed with idiots for engineers.
exisiting infrastructure! (Score:1, Interesting)
Faster faster faster. The trend mongers in the telecom industry kept making bigger and bigger pipes. But they can't combine and break up the packets correctly. Thus they can pass one million gig of data, but they can't pass and deliver a million separate gigs to and from different places.
That is the scam. They kept saying faster cheeper. But they couldn't say better.
As an analogy: You don't need a ten inch pipe into your shower. You don't need a fire hose on your water cooler. You don't need a 1/2 inch pipe into your refridgerator.
It is too bad that the people who dole out the venture money don't actually know anything about technology (ok, they must know something).
If something works, you don't replace it. We don't need 1 gig into our house. We do need reliable phone and reliable power.
I don't need streaming video. If I want to watch a movie I will rent a tape or go to the cinema.
Exisiting infrastructure has the advantage of already being there.
Free markets (Score:4, Interesting)
But economics, psychologists and other liberal arts types realize that human beings defy "nature" all the time. People who study economics essentially study the cases where economics don't work! Psychologists study why people are not rational/utility maximizers.
As far as the broadband/telecom connection goes, did anyone else read this [businessweek.com] article in Business Week?
It talks about how broadband providers are keeping prices artificially high because they would rather deal with slower adoption rates at higher margins than faster adoption at lower margins because THEY KNOW EVERYONE WILL ADOPT BROADBAND EVENTUALLY and they can force us to pay more. Cable broadband profit margins are about 50 percent now.
Makes you realize how much companies like Comcast can prevent high-speed adoption and screw over the telecoms in the process.
(I canceled my Comcast modem and television service last week. Originally, I just wanted to get rid of the television service, but they told me that if I did, they were going to jack up my cable modem price by $15. I told them to cancel everything.)
A matter of national security (Score:2, Interesting)
How Corruption Works (Score:5, Interesting)
Their goal? Simple. Take tax money out of the government, and get it into their pockets.
Back in the Reagan days, their favorite was the defense industry. It was perfect; there's relative secrecy associated with defense approrpriations, and the military bureaucracy is so intense that it took quite a while for the few people looking to find those $10,000 toilet seats.
We also saw a lot of "foreign aid" disappear into the ether, split up between the corrupt foreign officials and the corrupt local ones, all of it more or less going to Switzerland and Grand Cayman. Still do, actually.
More recently it's been Enron ("privatizing" electric utilities was already absurd, and anyone who followed it the time - including me - called it a blatant invitation to fraud; who knew they'd go all the way to turning off the lights to convince people of a fake shortage! Gives you an idea how little these people fear getting caught), the "airline bailout," the "farm subsidy," and of course, don't forget the "tax breaks."
Now it's a "telecom bailout."
All of these scams netted their perpetrators billions, and in some cases tens or even hundreds of billions. Almost none of the people involved have been investigated, let alone caught. It's the new American mafia, ladies and gentlemen.
Michael Powell is a notoriously corrupt FCC chairman; he's blatantly carried water for both the cable and bell monopolists, and under his watch telecom (and especially internet) service has been abyssmal (remember Northpoint? and what happened to the CLECs?) while prices have risen. It was easy for him, a smug "regulator" in a plum job snagged with handy nepotism; all he had to do was stand back and wink while the bells slaughtered their competition. You don't get a job like FCC chair under a Bush administration without knowing how the game is played... Anyway, this goofy letter to him is pretty amusing; you may as well write a letter to Satan.
Until heads start rolling in quantity (and believe me, once we started, by the time it's over we'd need to build a new federal prison), it's open season.
double standard--one must die (Score:2, Interesting)
The big media companies have done an end-around by purchasing cable companies and denying others media companies access. Now many of them also provide phone service taking away from the phone companies when the phone companies can't compete back! Even AT&T was broken up as only the long distance only arm has used the system against it's former children by buying cable comanies and offering data services over them which compete against the locals while still supporting the ban on locals from carrying long distance directly.
One has to die--Cable or Local Phone--they are now redundant. As far as our rights go we want the phone companies to win due to their common-carrier status. They cannot be censored as easily. (versus the RIAA/MPAA run cable co) This means that rules to open up cable to competition must be pushed thru--and allow Local phone to buy them up as they fail--but still have to offer competition.
Telecom Behemoths.. (Score:1, Interesting)
What would happen, hypothetically speaking, if, say the Telecom Behemoths all decided to dismantle ALL their network equipment, disconnect all their landlines and started selling Wisconsin cheese?
Do any of these little phone companies (CLECs) have the capital to invest in nationwide networks that bring phone service TO YOUR DOOR? A service many people take for granted by the way..
Re:impeach and imprison your attitude (Score:2, Interesting)
"With ties to"? Dude, I've "got ties to" Worldcom too. The packets in this /. post probably went through a router in uu.net land, after all. (Eeeew-eeeeew.net, I have to wash my modem :) More seriously, I've hung out with some folks in the wild wacky world of financial engineering, and none of us can figure out how any of the techniques employed by Enron could have worked in a free market.
The only reason the California Energy Crisis happened was because of laws that imposed price controls on one side of a transaction ("Thou Shalt Not Sell It For More Than $XYZ") but none on the other side ("You Must Buy At The Spot Rate.")
California's energy markets were akin to a law saying "This is a crime-free neighborhood. Citizens are required by law to leave their doors unlocked at night, burglar alarms and private firearms are banned, and telephone operators are prohibited from answering 911 calls between midnight and 6:00 am".
This doesn't make a thief any less guilty (it takes two to tango!) but a city council passing such an ordinance shouldn't be surprised when the burglary rate rises.
Now, if you wanna get political about it, if Gov. Davis was so sure he was being scammed by "Texas Energy Companies" (in a cheap politicial attempt to smear Bush/Cheney with the Enron brush - because he was deliberately overlooking the California energy companies that were doing the same goddamn thing), then why did he issue tens of billions of bonds to pay for it all?
It turned out he actually was being scammed - but his politicization of the issue cost him any credibility he had on the matter at the time. Nobody outside the extreme left believed him, they thought Davis was just politicking. Those thoughts were reinforced by Davis' actions - in perpetuating the broken partial-deregulation scheme by panicking and saddling the CA taxpayer with assloads of debt.
And if you really wanna get political, I'll even go out on a limb and say "...because there was an election coming up in 2002, and he knew that by shuffling the CA books, he could delay the resulting fiscal disaster until after the polls closed."
You can disregard my political points (opinion), but I think you have to concede the point (factual) about the analogy between CA deregulation, the "burglar-free zoning law", and free markets. The CA situation simply wasn't as simple as you're trying to make it out to be.
Finally - if Bush and Cheney were truly "friends" of Enron and Worldcom, as you speculate, then why are executives of those companies in jail, and their companies in ruins?
If broadband is so compelling ... (Score:2, Interesting)
The answer is two-fold -- first of all, a dialup delivers more than my desired quantity of spam and the content-rich sites I desire to see at very low cost.
I think the broadband market is saturated because there is no compelling and inexpensive content to be had via broadband.
Finally, competition is only healthy when there are competitors. If we lose the telecom services then broadband providers can get all the revenue and deliver shoddy service at high prices. I say let's keep telecom companies healthy until they are redundant.
SBC too (Score:2, Interesting)
What the heck, over?
Re:Legitimate reason for bailout? (Score:4, Interesting)
I did read it again. Apparently, I understood the words it contained. It doesn't grant rights; it recognizes them. The notion that rights exist only because a piece of paper says they do is rather horrifying. The Constitution exists to spell out the specific powers of the government, not the specific rights of the citizenry.
Here, look
Amendment 9: The enumeration in the Constitution of certain rights shall not be construed to deny or disparage others retained by the people.
Translation: Just because we mentioned a few rights doesn't mean others don't exist. They do, because this document isn't the source of rights.
Amendment 10: The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.
Translation: This document says what the government can do. If it doesn't say the Feds can do it, then the Feds can't do it. If it says the states can't do something, than the states can't do it. Other than that, let the people decide how they want their communities to be run.
Yeesh. Before making pronouncements about what the Constitution says, maybe you should try understanding it .
Re:Legitimate reason for bailout? (Score:3, Interesting)
Fair and open trial?
You mean like the trial of in the UK in 1986 of Eric Butler, a 56-year old BP executive who was attacked in a London subway car? His assailants tried to strangle him and started beating his head against the door, and nobody came to his aid. He unsheathed an ornamental blade in his walking stick and stabbed one of his attackers in the stomach. He was tried and convicted of carrying an offensive weapon.
Or like the English homeowner in 1994 who used a toy handgun to detain two burglars who had broken into his home while he called the police, only to be arrested upon their arrival for using an imitation gun to threaten or intimidate? Or elderly woman who in the following year fired a toy cap pistol to drive off a gang who were threatening her, only to be arrested for "putting someone in fear"?
Or maybe you meant Tony Martin, who after having his house burgled 6 times in a village with no local police force used a shotgun to kill one burglar and wounded another, only to receive a life sentence for defending his life and property? And, of course, the wounded man who is now out of jail has received 5,000 pounds in legal assistance from the government in order to sue Martin.
You know, putting aside the fact that an armed populace doesn't denote lynch mobs and vigilante justice, but rather the ability and willingness of a citizenry to defend itself against injustice, a heavily-armed American lynch mob certainly does sound like an entity that's more familiar with the concept of justice than most European governments I can think of.
No, was Re:Legitimate reason for bailout? (Score:5, Interesting)
Doesn't their existing infrastructure, and social dependency on that infrastructure, give them a somewhat legitimate need for a bailout?
No.
In fact, quite the opposite. The ideal combination of market and regulated solutions would be to strip the infrastructure part of the task away from the ILECs and create a new category, WC. The Wiring Carrier would handle building out infrastructure, and would sell it to whatever LEC pays the bills. That would put CLECs like Covad on semi-equal footing with the ILECs, who currently use their monopoly over physical infrastructure to beat the competition down like a red-headed stepchild.
I say "semi-equal footing" because in all likelihood, the people constituting the WC will be ex-ILEC lifers, the type that have proven their willingness to creatively interpret job orders in such a way as to screw the competition. After time, though, they'll die off and the WC will deal with whoever pays the bills.
It's our infrastructure. Our universal service fees have paid to make sure it gets built. However, it's managed in a way that allows the incumbent to screw the competition and screw the customer. They've had their day. Let's take it away.