FCC Abandons Linesharing, Kills DSL Competition 612
raygundan writes "According to Reuters, the FCC today decided to greatly curtail the laws that force incumbent phone companies to share their lines with their competition at cost. This does not bode well for companies like Covad Communications who provide DSL using phone lines to bridge their data networks over the "last mile" to customers. The new rules do force line sharing as long as companies are willing to offer voice service, but this essentially states that if you are not already a phone company, you cannot offer DSL. The existing rules will be phased out over three years. There is still some hope, however, that a federal court might strike down the FCC ruling. Oddly, the news agencies seem to be reporting this as a minor change to the rules, rather than an end to all non-ILEC competition in DSL." The FCC's front page has links (luckily PDFs as well as Microsoft Word files) about the decision, including statements from each of the commissioners.
Here in the uk... (Score:5, Informative)
Thanks FCC! (Score:2, Informative)
Re:DSL. (Score:1, Informative)
Re:Interesting (Score:2, Informative)
This seems to indicate that you're right, but you'll also end up paying a good bit more for it. Unless I'm misreading...
Re:Solutions (Score:5, Informative)
Yeah, the problem is though that the government subsidized the creation of Bell's infrastructure in the first place.
Re:Interesting (Score:5, Informative)
Never mind that the crappy half is already strung to every house everywhere, and the running redundant phone wires is both wasteful and counterproductive.
Re:DSL. (Score:5, Informative)
Re:Difficulties .. and Wireless (Score:5, Informative)
Technically, the Bells really should be able to lay down the law when it comes to who access their cables. I mean, it's their cables.
I'm all for competition, but this is kind of an awkward situation.
The point you're missing is that the Bells, unlike say McDonald's being forced to let Burger King use their extra grills, have a monopoly in the last-mile telecom arena. What's more, it's a government-sponsored monopoly. That means that the Bells have, as a condition of their monopoly, certain restrictions and responsiblities that other industries don't.
The Bells can stifle any sort of telecom competition simply because they DO control the wires going into your house. Thus, the only way to ensure any sort of telecom competition is to force the Bells, as a condition of their maintaining their utility/monopoly status, to open their networks to competitors at reasonable prices.
Re:Interesting (Score:2, Informative)
Re:DSL. (Score:3, Informative)
ostiguy
Read Webster. Learn what "deregulation" means. (Score:5, Informative)
Deregulation is letting those who own their lines lease them at the prices they want to, or not at all. See any regulations there?
Exactly.
Best example is the California power system "deregulation" that caused all those blackouts - what was billed as "deregulation" wasn't deregulation at all - just a different set of regulations that turned out to be much, much worse than the old set.
Point of the matter is you should not trust anyone's opinion on what deregulation will do if they do not even know what deregulation is in the first place.
You can find out... sometimes (Score:2, Informative)
I found out the phone number of the guys living in the place at the time and checked online for availability using their phone number and address, and was able to find out that BellSouth offered DSL in that area and Covad didn't.
However, if you don't have a phone number for the place, odds are bad that you can find out what local loop it's on and thus whether that loop has DSL.
If the phone companies really maintained an exacting database of addresses corresponding to local loops, it would be simple, but their systems tend to be so patchwork and arbitrary that they don't. Plus, they probably never needed to know this before. All local loops are roughly equal for voice.
Re:Interesting (Score:5, Informative)
1. The CLECs pay the ILECs the same for the lines as the ILECs pay themselves, unless local governments change it. In that case, it is stupid. Fair is fair.
2. Those lines are build on public land with tax money. The ILECs are not the only party with money invested there-- you and I paid for that stuff, too.
3. Do you remember there being any DSL BEFORE they were forced to open their lines in 1996? No? Thought so. Remember ISDN and $1500 T1 Lines? DSL is an old tech that could have been deployed back then. Why didn't they? Because with no competition, there was no incentive to upgrade OR lower prices. The fact that we have DSL at all is a direct result of the competition jump-start that act gave the market.
The government may not own it outright, but if the government's going to use my money and public land to benefit the ILECs, I think it's close enough. If you think sinking government money into a private company in return for nothing is a good idea, well, that's bullshit too, junior.
Re:Allegience Telecom (Score:3, Informative)
Their tech support is a joke as well. Call them and ask them why your internet is down.. they'll tell you they "are working on it, ETA unknown."
Complain to the FCC (Score:3, Informative)
Re:Beautiful...Rose coloured glasses (Score:5, Informative)
"I mean hell if they were allowed to sell DSL AT COST you people would still throw a shit fit because DSL lines ARE EXPENSIVE!"
NOT, they are just bloody existing copper lines. If a responsible entity had DONE ANY sort of decent upkeep over the last 40 years, there would be no issue, but instead they sucked up the profit, blew it on useless expansions in areas that were NOT their field, now they want us to pay for their mistakes...I say we nationalize the infrastructure, it is after all a BUSINESS REQUIRMENT these days, and then appoint someone to operate it and let the bells become tenants just like everyone else.
Note, I don't mean this as a personal attack, it just sounds like you are leaping to the defense of your employer....Archfeld
Chairman Powell (Score:2, Informative)
Powell suggests that the Majority Opinion is in dire legal peril since it is almost exactly like the previous telco rulemaking proposal which was swatted down by the supreme court. For them to pass the same, obviously flawed, argument all over again is idiotic.
Powell must be saying to himself: "I am surrounded by fools and peasants."
Re:Thank God someone understands! (Score:2, Informative)
Actually that law was written by a multitude of groups, including the radio industry. Also, you are forgetting that long distance carriers wanted to get into the local market.
It was less about long distance services than a multitude of services and expansion that could be done. For example, AT&T and the baby bells could not make computer equipment.
The law also opened up the way for broadband cable access, and telephone over cable. That is something a lot of people forget. Your local cable company is allowed to provide dial tone now.
Saying that the bill was only for the Bell's is a pretty ignorant statment.
Re:Why is this a problem? (Score:3, Informative)
Okay. But what happens when the laws requiring companies to provide certain quality of service are incompatible with profitability?
A href="California energy crisis", that's what.
Re:Say goodbye to inexpensive DSL... (Score:2, Informative)
The troll had some of it right. (Score:5, Informative)
That's partly right. But the AC had the bulk of it right, too.
Early in the history of telephony -when it was still local - there was competition. And the competing companies refused to interconnect and complete each other's calls. (In particular, Bell, the big gorilla, refused.) So businesses (like hotels, banks, legal firms, newspapers, telegraph offices, and cab companies) had to have phones from two or three companies to be sure all their customers could get to them.
Bell used their own reluctance to aid the competition to convince the government that telephony was a "natural monopoly" and thus needed to be regulated. (At the time gas and water distribution were considered to be "natural monopolies" because it would cost N times as much to install pipes for N companies, so supposedly a monopoly under price regulation could deliver the service for less than the cost of multiple copies of the infrastructure.)
So the regulators set up a system where "franchises" - regional monopolies - were given to various companies. Of course where a local phone company already existed it got the franchise, and where multiple companies existed the big guy typically got it and the little guys had to sell him their equipment (or trade it for equipment in a less-lucrative market they also shared).
If I recall correctly, Bell was the big gorilla at the time because it had had selective access to Bell's patents, another government monopoly. (Bell made it to the patent office a half hour ahead of another inventer with a virtually identical device.) So in the early days Bell had the best equipment and others had to work-around, and once the patents expired Bell was the big kid on the block.
Under regulation the prices were set at levels that guaranteed Bell about a 6% return on investment - and whenever it dropped below that they could petition for and receive a price hike.
(Bell Labs actually existed to spend as much money as possible on research vuagely connected with telephony, because for every dollar spent there Bell could bill customers $1.06. It was the biggest failure of the system, because basic research pays off big. Virtually from the start they made more money licensing Bell Labs inventions than the lab cost.)
As long distance became possible, Bell (who had by then bought out most of the little guys, except for some rural co-ops and small towns wired by the likes of General Telephone) became the regulated monopoly for interconnecting the cities.
Bell continued to be a government-mandated monopoly until a series of court decisions.
First the Carterphone decision led to the "foreign attachments" tariff - and you could stop renting a phone built by Western Electric (Bell's manufacturing subsidary) and hook up one bought from an independent manufacturer. Phones went from a paper cost of hundreds of bux to cheap disposables over a few years.
Then Microwave Communications Inc. (MCI) took advantage of that tariff and inflated long distance charges by setting up their own inter-city microwave hops, renting local lines, and bypassing Bell. Bell sued, MCI counter-sued for antitrust, and the fallout was that not only was MCI (and others) allowed to continue, but Bell was required to let them hook up on the same basis as Bell's own long-distance operation. And to keep Bell from playing accounting games to subsidize unregulated long distance from monopoly local bills, Bell was split up into AT&T (long distance), Lucent (Western Electric & Bell Labs), and a handfull of "Baby Bell" RBOCs (Regional Bell Operating Companies) to continue the monopoly local/short-range long distance service.
Meanwhile, virtually all the local copper was installed by Bell Telephone or the Baby Bells while they were regulated monopolies, with government-mandated monopoly pricing for their service subsidizing the cost. A new competitor in a deregulated local phone business would have to wire a whole city and then pay for it with money made while charging less than the established RBOC, which is sitting on paid-for subsidized copper and can cut prices to the bone. Can't be done.
Eventually the RBOCs were allowed back into the long distance business - at a price. They had to provide DSL service and rent their local copper to upstart competitors at a wholesale price. It seemed like a good idea at the time, because the long-distance service was where the money was. Players there were mostly AT&T, MCI, and SPRINT. (The Southern Pacific Railroad had strung fiber along their right-of-way for their own communication. Fiber has a LOT of bandwidth, so they rented out the surplus bandwidth by becoming a long-distance phone and long-haul data carrier.)
But about the time that deal was cut, several upstart long-distance companies completed THEIR long-haul fiber loops, and the price war started. Suddenly the Baby Bells had no revenue from the shiny new long-distance operations. So they started dragging their feet on the DSL deployment. As for installing more copper to expand their own service and rent to their competitors, it no longer makes ANY sense with the only revenue coming form local service. So they won't do it until the ruling is reversed.
Meanwhile the competitive local phone carriers never really materialized (except for the cable operators, who also had existing copper installed). And the little DSL ISPs - except Covad which re-organized out of bankruptcy, dumping ITS startup costs - are pretty much dead, from their own price war (and from the local Bells' tendency to raise their service costs by screwing up their local copper). So from the regulators' point of view the competitive market they're trying to protect hasn't, and won't appear. Thus the release of the Baby Bells from the wholesale price controls, in the hope they'll start installing more cable.
Re:Why is this a problem? (Score:1, Informative)
The Canadian government has been keeping Bell's "monopoly" over the telecom infrastructure in check for decades now - so much so that it is still in some respects nationalized, even though it has been a private entity for quite some time. Bell is forced to let competitors in the ADSL market lease lines from them at reasonable cost - and this is basically what the FCC has just decided to do away with in the States. There are many smaller ADSL providers here, some of whom are a damn sight better than Bell's underwhelming Sympatico service. No doubt there are many large telecom company executives cracking open the champagne bottles in the US tonight, because now people will have no choice but to put up with their 'streamlined' offerings as the already endangered alternatives are wiped out.
You gotta love the hypocrisy. American defenders of unfettered free enterprise are always going on about 'choice', and the infinite range of choices available to the consumer in free market land. Meanwhile the reality is that the more unregulated the market, the more consolidation we see occuring, resulting in fewer opportunities for competition. Eventually there is ONE choice. Only a balance, which requires that dirty word 'regulation', can truly ensure abundant choice and ever-present competition rather than stagnation. Libertarians seem to have a blind spot for the kind of market totalitarianism that massive corporate consolidation (and the attendant political interference) brings about - the rule of the old and powerful guard in any given sector, a market where no small competition could ever realistically get a leg up and try to beat them out on merit.
Anyways, small providers here must of course have their own upstream links and routing schemes worked out, but Bell is required to enable their customers' lines for DSL at the switch and route them to the ISP's gate.
If you ask me it works pretty well for all concerned. Consumers benefit from the competition (the fact that you think there is a 'monopoly' situation here, and no 'redundant' competition indicates that you don't crawl out from under your rock all that often). Bell benefits because they still get paid, and because typically these indie ISPs also pay to use BellNexxia as one of their upstream links. And the nice thing is, these small ISPs don't need to have a presence in every locality they service. My ISP is located in Ottawa, with some hardware in Toronto. Yet they are able to sell their service to just about anyone in Ontario, since Bell's rollout of DSL-capable lines was completed about a year ago in the province.
In the States you have organizations like the FCC, which couldn't be more clearly in the back pockets of large monopolistic interests. Let's face it, the public interest is irrelevant to them and always has been, and the decisions they've made reflect that.
Here in Canada we have a finer balance between business interests and the public interest in the telecom sector (and many others), and that is why we have first-class services. The CRTC has made some dodgy decisions without a doubt but it has orders of magnitude more integrity, far less of a divide between stated principles and actual practice.
I think the larger problem is that organizations like the FCC and their masters depend on the political apathy of the general population, particularly in regards to such boring bureaucratic entities as regulatory bodies. As long as few are paying attention, they have carte blache. And of course the even larger problem underlying it all is that the American public spends more energy paying lip service to civic duty than it actually does scrutinizing and criticizing government. Sad that the birthplace of democracy in North America has become such a very poor example of it.
Separate Content from Infrastructure (Score:1, Informative)
So make it simple. GAS and Electric deregulation will (and should) lead to regulation of the infrastructure provider and deregulation of the content provider. No difference here, OR WITH CABLE FOR THAT MATTER.
What I mean is (1) and only (1) provider of a fiber to my house (next step, right?). That company is a regulated monopoly, renting out to any retail content provider with whom I want to setup a contract. This means telephone, cable/video, and broadband internet (and later who knows what else - real picturephones anyone?).
The FCC's concept of encouraging "competition" by having different "monopolies" compete (where "monopoly" here refers to a company with existing infrastructure that costs so damn much to build that the cost of entry for a new competitor is prohibitive) is just silly (see the NY Times Magazine article on Powell the younger from a while back - this seemed to be the concept).
While it may seem to be sensible to encourage a Cable company compete with a BabyHuey-Bell (my term for what the BabyBells have become as they merged), in reality this has not worked. the problem is however that the Bells had DSL competition, but multiple providers on the Cable situation was not as realistic.
All you folks that want to say I have this wrong - I don't care about the details. What I am saying is STOP TYING TOGETHER THE INFRASTRUCTURE AND THE CONTENT CAPABILITY!! One is a monopoly, but the other should have active competition. Putting them together gives me the worst of both worlds - no choice and high prices.
The best analogy here is the "Union Station" concept. Long ago, the Internet of that day was the railroad. So in each major city, every railroad had its own terminal. Only after everyone got tired of this concept did we get one terminal for everyone (not always, but often). The same thing for airports. Think of how it would be to have the airports dedicated to specific carriers.
It is a huge waste of our money (whether regulated or not - we still pay for the construction of these lines). There is still some value in thinking about competition via technology (wireless, satellite, etc.), but that is like rail versus trucking.
One more time - one wire (preferably fiber), multiple providers. Yes, they can sign me to a long-term contract; they just can't sell me both as an exclusive bundle. everybody pays the same access fees; even the BabyBell content providers to their own (regulated) infrastructure subsidiaries.
And to all those telecomm lobbyists that paid the FCC to do it their way - I would just like to keep you from continuing the process of getting me to pay for another round of a telecom bubble.
What else do you think will happen if monopoly profits are allowed to return?
-That's Mr. A.C. to you-
Re:Why is this a problem? (Score:3, Informative)
The providers initially claimed that they were being pinched by gov't mandated low prices, and actual high prices in the free market, but this was factually incorrect. The high prices in the "free market" were... here's the surprise: government mandated, and chosen by the power providers. They siphoned money out of the customers via PG&E, which really was pinched. There was surplus energy at the same time as the rolling blackouts.
Re:It's times like this ... (Score:2, Informative)
So i guess i cant really complain, but if this FCC ruiling goes though.. I'm going to be rather unhappy. lets face it, Verzion DSL just sucks.
WTF are you talking about? (Score:2, Informative)
By definition:
1) The CLEC provider must collocate their own equipment with the ILEC/Bell/Evil Empire; therefore, the CLEC must pay recurrring collocation fees, a one time "setup fee", and additional application-for-space fees to the ILEC (and that shit ain't cheap!!! $5000 just to apply; multiply that by 2,000 offices!!!)
These fees are in addition to purchasing the equipment in the first place (DSLAM's, ATM switches, and DS3 multiplexors are not small or cheap), hiring/paying their own technicians to install/maintain it (technicians that can't access that equipment without jumping through "building access authorization" hoops), and paying for support contracts with the vendors of that equipment (ever bought a Cisco support contract? that ain't cheap either.)
2) The line-shared service must be provisioned over a line with existing POTS service; this means that the loop/pair/last mile was ALREADY delivered to the end user's premises and the end user is ALREADY paying the ILEC for their POTS service (note that POTS service recurring revenue is supposed to pay for any premises dispatches by ILEC technicians for loop quality issues related to voice services)
3) The CLEC still has to PAY the ILEC to connect the DSL equipment (which they ALREADY pay to keep in the ILEC office) to the end user's phone line (for which the end user is paying already)
4) The ILEC charges a monthly fee to the CLEC for providing a simple set of equipment cross connects in the Central Office; remember that this is over and above what the end user is already paying them for POTS service
5) UNE DSL lines are not cheap either, but CLEC's still pay more then end user's for the "privilege" to lease a dry copper pair. Most ILEC's will lease an "alarm pair" for under $20 month to an end user; many CLEC's pay nearly twice that for a pair with nothing on it!!!
Forgive me for saying "below cost my ass!!!" If the Bell monopolies weren't so uber-bloated w/r/t their business practices, human resources, logistics, etc..., perhaps they'd be making money hand over fist instead of bitching about not having any money or incentive to buildout in rural areas or extend buildout further into urban/suburban areas. I wish I could get the government to subsidize my business; then I could screw my customers every which way I could think of in order to lure shareholders in to giving me even more money.