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.
Encouraging investment? (Score:5, Insightful)
The Federal Communications Commission on Thursday voted to exempt new high-speed communications networks from requirements that they be shared with competitors, a move aimed at encouraging investment in bringing fast Internet access to consumers.
Right. Big time investment. Just around the corner. We just need to know it won't all get snapped up by our competition. But we're planning. Yes we are. Big Time Investment. Promise. Even though the economy's in the crapper. Investment. In the future. Of the internet. For Consumers. Investment.
Horseshit!
This is such complete and total doublespeak. Every telecom network in this country was built with public assistence. That's the way to "encourage investment." This is simply a move to allow the established Bells (and neo-bells, like SBC) reap more profit off of existing (publicly subsidised) infrastructure.
Where am I going, and how did I get in this handbasket!
Difficulties .. and Wireless (Score:2, Insightful)
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.
On the other hand -- all ya'll who are hot to trot with wireless Internet access: hop on the venture capital wagon, and start your roll out in about
All the smoke and fury... (Score:5, Insightful)
Re:Powell Stinks (Score:4, Insightful)
Prepare to burn karma... (Score:2, Insightful)
Dammit, thats so unfair. The government should force companies to sell their property to other companies at cheap rates. Why should companies benefit from investing in infrastructure? The big companies should just buy lines for other small companies to use for free because they have more money. Damn capitalist pigs.
Seriously? Anyone here believe in private property? I mean, would it be fair to for the government to force you to fix your relatives computers whenever they wanted because you have more knowledge then them? Or you to lone your car to the homeless guy down the street because you have more resources then them? I mean, if you want to, then sure. But to force you??
Cable is the GREATER of two evils (Score:1, Insightful)
with cable broadband access, all 3 layers are controlled. you have to abide by WHATEVER the cable provider says. they have been proven on slowing down connections to sites that are competing with them or their network, and even blocking those that they see fit.
this vote is an abomination to the end-to-end openness that the Internet once was.
we have paid (Score:5, Insightful)
You must realize that before deregulation, the telco's were selling us $1,500/month T1's and per-minute ISDN service. DSL technology is old and could have been deployed in the
Wait five years from now after deregulation occurs and we are still paying $50/month for 1.5Mbps ADSL when the rest of the world will have fiber strung to their doorsteps. The Bells have a history of stagnation and emtpy promises, thats why the telco act of 96 was created in the first place.
Re:Difficulties .. and Wireless (Score:5, Insightful)
When it comes to essential public amenities, you cannot allow monopolies to stamp their and say "It's my ball, you can't play with it!"
Re:Say goodbye to inexpensive DSL... (Score:2, Insightful)
What we should get out of this whole thing is real innovation and competition. Now that it's becoming increasingly difficult to be a successful DSL provider, maybe we'll start to see viable alternatives to cable and DSL. Wireless has real potential, if you can make it sufficiently low-cost and secure ("secure" in the sense of making it difficult for people to hijack).
Oh, and by the way, wherever there's a cable company there's competition. We get our phone service from our cable company here. The only monopoly is in the phone lines, so all you need to do is what the cable companies are doing (and doing very successfully): find an alternative to the phone lines.
Re:Solutions (Score:3, Insightful)
Verizon == Bad Customer Service (Score:1, Insightful)
Us: Our DSL doesn't work
Them: Is your computer on? Is the modem plugged in to the phone jack?
Us: Yes, blah blah
Them: What color is your modem?
Basically, Verizon's tech support was completely useless, and the DSL never worked again. A month or so later we ordered DSL from Earthlink (with the line provided through Covad). They connected us within a week, and the line has worked flawlessly ever since.
If Earthlink, Speakeasy, etc. go away, getting useful broadband is going to be very difficult.
Basically, local telco monopolies have absolutely no incentive to offer acceptable customer service, and in my experience, they don't.
But which monopoly is the real culprit? (Score:4, Insightful)
* The phone companies who own the wires running to your location?
* The local governments, who regulate how many wires can be put up, and extort plenty of cash from anyone who wishes to emplace new ones?
* The state governments, who already charge heavy tariffs on current communications methods (hey, it's a monopoly, we can milk it as much as we want), and also put more tariffs and more barriers on newcomers to the business?
* The federal government, which severely limits anyone who wants to try a wireless solution?
You are missing a VERY big point here.... (Score:1, Insightful)
Make sure that you understand: if it hadn't been for the FCC forcing the phone company to share its lines, then the Internet (and along with it, any innovation based on it) would not have come into existence as we know it.
As it stands, cable TV controls the physical, code, and content layers of TV broadcasts. Think about it: is there more than 1 wired cable TV provider in your area ? no, because it's a regional monopoly system. With this voting, the FCC is essentially giving that SAME control to the phone companies. when the phone companies are the only ones providing DSL service, then they will be controlling both the physical AND code (dsl) layer.
Re:Difficulties .. and Wireless (Score:2, Insightful)
The problem is that it's only sort of their cables. Yes, they ran them, but as tax payers, we all effectively paid for them via subsidies and tax relief and all sorts of mechanisms by which the government has helped out utility companies over the years.
Since a) we like to consider ourselves a mostly free-market economy, and b) those lines belong to you and me as much as they do Bell, I kinda like the idea of deregulation.
Unfortunately, what we wound up with is broken. For example, a CLEC can't force the ILEC to recondition a loop to carry DSL-- if it's got good enough quality for voice, that's all the CLEC can demand. CLECs can't use remote SLAMs. The competition is unfair.
Of course, to the Bells, being forced to compete in the DSL market is unreasonable since they're already competing with cable and (theoretically) satellite in the broadband market already. So they're not even interested in complying with the spirit of the law; to them, they're being forced to hand some of their profits in a perfectly reasonabl y competitive environment over to some other company.
Given that the ILEC/CLEC structure needs fixed, I like the idea of trying to do so. On the one hand, I kind of feel like this recent ruling is like throwing out the baby with the bathwater-- but on the other hand, I wonder if the baby isn't dead anyhow.
Re:It's times like this ... (Score:4, Insightful)
Re:Solutions (Score:2, Insightful)
Re:Powell Stinks (Score:4, Insightful)
But seriously, we could spend all day blaming one party or the other for this, or we could discuss the merits and problems of this new decision. Particularly interesting, to me, would be a description of the good things accomplished by the existing regulations. I was under the impression that the whole partial-deregulation quagmire was universally perceived as a disaster. Apparently you don't think it was. Why?
Re:Solutions (Score:3, Insightful)
Just because the government handed out some money to someone, does that give everyone else the right to share their assets? The government subsidizes farmers, but if I wander onto a farm and pick a few apples, I'll get arrested for theft. Or a better example, I wouldn't be able to walk onto the farm and plant a few sq. yards of my own crop. Or at least I shouldn't be able to.
Re:Difficulties .. and Wireless (Score:4, Insightful)
>establish COs and copper to (nearly) every house
>in the United States, I'd be a little pissed at
>the government for making me open it up to
>people who are offering competing services.
If you've paid taxes in the past century, you DID lay out a serious amount of money for that stuff.
Clue for you. (Score:5, Insightful)
Nope, it's your cable. They built it on public easments with monopoly protection. Keeping others off those lines is about as bogus as keeping others from being able to run their own last mile network, but that seems to be the way it was and is. Now demands have been made that others can use those lines AT COST and offer services that the Bells were unwilling to offer.
I'm hoping that Powel plays this well. As someone else pointed out, he does not agree. This is just the kind of thing that will turn Powel into a houshold word, if he can pull it off.
If he can't, I expect the Bells to start pushing their high priced and highly restrictive service. Woot, I might get to chose between two really lame monoply servers who own the internet.
Screw them. Build your chunk of the wireless mesh today.
Backfire? (Score:3, Insightful)
I seriously considered turning off all of my landline services last year. The only thing that stopped me was the announcement that DSL was finally available in my area.
If no competition in the DSL market causes me to turn off my DSL service, I'll likely turn off my landline phone as well, and go strictly cellular.
What we could see happen, with wireless technologies becoming more and more viable, is the elimination of any wired communications to the home.
Eliminate the "last mile" of copper and you eliminate the Baby Bells.
Re:Interesting (Score:2, Insightful)
In many areas SBC only offers service out to 14,000 feet (maybe everywhere now, except for existing customers, and of course there are always exceptions but I'm not one of them) and even then they only offer 768k/128k for the price of 1.544M/128k. This is largely because if one or two subscribers are experiencing too much down time (as mandated by the FCC) then a whole CO (or more) can get shut down, and SBC has to pay big fines.
So basically, SBC/pacbell (in my area) is being forced to provide infrastructure, forced to update it to benefit their competitors, and for what? Because they were there first? That's bullshit, son. If the government wants to control the telephone infrastructure to this extent they should have to own it, and they don't. It's one thing to say that the phone company has to provide reduced-cost telephone services to poor people like me, it's entirely another to suggest that they should be leasing capacity to competitors at less than its value considering the amount it costs for maintenance.
I totally agree with you. His points are stupid ! (Score:1, Insightful)
The only solution I see is to federalize these copper lines because of they years of protected monopoly status for the bells and allow linesharing. Powell is for protectionism.
Why is this a problem? (Score:5, Insightful)
The problem isn't lack of competition, quite the opposite, more competition means more companies each with redundant staff and bureaucracies. The solution is to actually have the FCC mandate service quality. DSL service sucks down there because the phone companies are free to do whatever the hell they please.
If you had a government regulating body which looked out for the best interest of the consumer and dictated that the Bells must meet these service levels for customers things would be rosey.
But ooooh no, regulation is bad for business. BS! In natural monopolies like this it's the only way to go. You simply TELL the company they must provide quality service, no excuses.
Until this happens we're going to continue to see the weekly story on slashdot of people whining that their DSL is too slow or they can't get service.
Think a little harder. (Score:5, Insightful)
It's hardly "private property" when public money built it.
And to top it off, it's not "free," either. The CLECs (like Covad) must pay the phone companies the *same* rates they charge to their own DSL divisions. Covad pays SBC the same as SBC's DSL division pays SBC. And on top of that, SBC (or whoever your ILEC is) gets paid for the damn phone line in the first place.
So, they get paid for the line, AND paid AGAIN for the line by Covad, AND tax money, tax breaks, government assistance, and right-of-way to build the lines in the first place, and you think that keeping the lines open for competition isn't fair?
Screw that.
Re:Interesting (Score:1, Insightful)
ILEC's should be forced to provide the infrastructure at-cost to CLEC's because the ILEC's have benefitted for DECADES on their monopoly status.
how long was it before you could actually buy a phone instead of lease it from the company?
Luckily? (Score:2, Insightful)
Re:Say goodbye to inexpensive DSL... (Score:4, Insightful)
I'm sure their argument is that they won't upgrade because they are afraid if they do they *won't* profit. Me? I don't know who to believe... Sure the phone company is greedy and wants to keep this pie all to itself, but on the other hand their competitors are just as greedy and want a free ride. Government has to step in and set a wholesale price that in the end is arbitrary and probably has a greater corelation to which company funded which campaign than to how much the line costs to install & maintain.
The problem is that the one wire to your house IS a monopoly and there aren't many good ways to get around that. The only way to have real competition is between different networks - phone line, cable TV line (maybe the power line? wireless?) anything else is still a monopoly and you are only arguing about how to regulate it.
Re:This passed despite heavy dissent? (Score:3, Insightful)
Line Sharing is Stupid (Score:3, Insightful)
I don't want POTS on my DSL line! I have no need for POTS! My cell phone is my primary phone number.
The market should embrace novelty, and if the cost of doing that is a second pair of wires to your home to accommodate POTS, so be it! (With the important market caveat that other people must feel the same way...) Splitting hairs over the incramental cost for DSL above POTS service is not productive.
Make the 3rd parties offer "full service" for them thar copper wires!
Re:Difficulties .. and Wireless (Score:3, Insightful)
Bells should lose their monopoly/utility status. They should also lose government mandated leins to lay their wire. Then they can own the existing wires, if they like, but anyone has to be able to lay their own. And the cost of land should be real, to all the competitors.
Same for the wireless spectrum. The government monopolies have been proven to be much, much less beneficial than freemarket driven bandwidth use. Regulate all spectrum like we regulate the visual spectrum and 2.4 GHz: You cannot blind anyone.
I'm a damn liberal Democrat, and I can see that the libertarian answers are the correct ones in these situations. The existing legislation is profit-driven. Crony capitalism at its worst.
Re:Think a little harder. (Score:3, Insightful)
If the farmers had gotten together and bought a law making it illegal to grow your own veggies (i.e. if they had acted like the incumbent phone companies), then it would be reasonable to either extract concessions in return or take away the special benefit.
If the ILECs were willing to give up the benefits of a mandated infrastructure monopoly (including retroactive payback for what they have already gained from it), then I'd have no objection to letting them off the hook. The problem is that they want it both ways.
no, and, ummm, no (Score:3, Insightful)
Most of the lines that are being leased were paid for by the public by means of government subsidies to the Bell(s). Not only were they subsidized by the public, but they have been paid for many times over; so they aren't losing any money. And they are definitely NOT private property. Even so, the CLECs ARE paying for the use of the lines (and the lower cost is not any lower than what the ILECs pay).
Covad has an enormous network of hardware and cable, they are only needing the last mile of wire to the home. Now they can no longer lease that small segment of the line that's ALREADY there.
Now, there was some sort of provision for new networks that were deployed to newly developed communities, and I can see the Bells being a bit ticked off about that...
"The Bells also won't have to let rivals lease access to new fiber lines that they lay down to connect new housing developments or businesses. Even that decision, however, is bound to cause confusion in cases in which portions of the Bells' networks are composed of both copper and fiber."
but that is only an issue with them selling their new network to phone carriers since Covad uses their own equipment and is just leasing a section of the line (as opposed to the CLECs phone guys who lease every bit of the line and the hardware that connects it).
Powell actually wanted full deregulation EXCEPT in the DSL market. What happened was the opposite. While this will help keep phone costs down, there's no reason at all that this will help lower DSL costs (it might, however, help DSL availability since the Bells have more incentive to offer it).
The other big issue is what is the point of having multiple phone lines going to the same building? Powell said ending the leasing of lines would encourage AT&T et.al. to run their own lines to offer competitive service. Does he realize how expensive AND wasteful that is?
Re:Think a little harder. (Score:3, Insightful)
Before the telecoms act of 1996, we had government subsidies with no benefit to us. There was no DSL (although the technology was available-- it's not a new idea). Just $1500 T1s and ISDN.
To use your analogy, the situation was more along the lines of paying farmers to farm, and then having them sell year-old dried vegetables for quadruple market value because they were the only game in town.
But that analogy has one gigantic flaw-- in a given area, there are thousands of farmers, all competing to keep price down. If there were 500 phone companies servicing my hometown, all sharing the subsidy, I imagaine these rules would be totally unnecessary.
Re:Finally the bells can use their *property* (Score:5, Insightful)
Finally the bells can use their *property* without subsidising their competitors.
Property that was paid for via a government protected, anticompetitive monopoly with tariffed rates that kept costs high and federal laws that prevented competition. Line sharing simply recognized the reality of how those lines were paid for and how the law kept others from competing. We payed artificially high prices for decades to finance that property with the stated purpose of developing a public infrastructure...not as an act of "corporate welfare" for the Bell system.
This will be a good thing in the long term 3-5 years.
No better than what happened when the cable companies kept increasing rates and not improving service when THEY didn't have any competition. Think about how bad the cable is now...even WITH the competition from satellite services. With most consumers having only one, perhaps two broadband options left to them you can expect the costs to rise, bandwidth to get metered, and content to be prioritized via PPPoE. Fewer choices is NOT a good thing. Don't believe me? Ask any economist. And note that the non-Bell ISPs *consistently* beat the service ratings of Bell ISPs...see Broadband Reports [dslreports.com].
As for comparing us to South Korea...? Do you really think our situation in the U.S. is even remotely similar to that of South Korea???
With previous rules there was no incentive to upgrade their systems because then their competitors would be able to use it too. Now we can have: cable, phone, satelite, wireless, and (perhaps) power line all competing.
With the previous rules the Bells simply followed the strategy of deliberately keeping their equipment primitive and broken to block competition long enough to put them out of business. They knew they were the choke point for the CLECs, and that if they could deny them revenue long enough they could put them out of business. And with most of the CLECs the strategy worked...most of the CLECs went under. Here in California Pacific Bell/SBC had a whole host of tricks to make it difficult for CLECs like Covad to get wire pairs for DSL installs...but remarkably had no problem at all when it came to handing out those same pairs to companies installing home alarms.
This is a good thing even if it is not the socialist position.
Drop the stupid rhetoric. The old, regulated Bell system was clearly more like socialism than what we have now. The US government protected them from competition for the better part of a century to allow them to build up their infrastructure. Ensuring competition by allowing competing providers to use the existing infrastructure just makes sense. Would you require each trucking company to build its own highway to transport your frozen chickens to market?
Thank God someone understands! (Score:4, Insightful)
These "virtual" phone companies that ride the carriers _at_cost_ have been largely responsible for part of the telecom bust. It's the same model as Enron. Selling things that you don't actually own or maintain. If something goes wrong, you have to pay the carrier $$$ to get it fixed.
A few months ago slashdot was bitching about why cable was clobbering DSL and was taking over broadband, and there would be no more competition. Do you want to know why? The reason is that SBC (in my area of the country) is forced to give up their lines ANY TIME SOMEONE WANTS TO USE THEM, for free (at cost, but that bandwith is lost to SBC).
If you want real broadband competition you cannot cripple the companies doing the investment into the network of DSL.
Cable companies do not have to share their lines. The telecom deregulation act did some good, some bad. (We got worldcom and a bust, but attributing everything to that is not the best idea.)
I get long distance for 5cents a minute, and may soon switch to MCI for unlimited local and long distance calling.
Don't whine about access to a network you never built!
Re:Nationalize! (Score:4, Insightful)
Either option works for me. Our current situation is crony capitalism, plain and simple.
Re:Charman vs Commisioners (Score:2, Insightful)
Re:Difficulties .. and Wireless (Score:4, Insightful)
Is there any reason that you couldn't have more than one line? Sure you wouldn't want dozens or hundreds of different lines but couldn't each town or county grant three or four different companies the right to lay down those wires? Then each company could provide whatever services and compete on a level playing field with none of them holding either it's control over the physical assets or it's influence with the legislature to set a "reasonable price" (which may or may not be "reasonable" and will forever be controversial) over it's competitors.
I suppose you still have the problem of who fixes the mess when a phone pole falls over and pulls down *all* the lines - perhaps they would all have to share the expense of a common maintenance & repair service on an equal basis.
Mike Powell not a friend of #10, either (Score:3, Insightful)
See what happens when you take state governments out of the loop? I swear, repealing the Seventeenth Amendment [friendsforamerica.com] just keeps on seeming like a better and better idea...
Re:Say goodbye to inexpensive DSL... (Score:5, Insightful)
And that's the argument for why "TELCO must share". As to "viable alternatives", what would you propose? The only viable alternative I can see is the TV cable company.
Ratboy.
Re: NO YOU DON"T UNDERSTAND.... (Score:2, Insightful)
You guys fail to realize that municipalities control exactly what wire, where, and when flows over their easements. Most municipalities have already decided that only one cable company may run wires in the community, and only one telephone company can run wires. All others are screwed, the best the municipality will do is let others bid when the 99 year telephone services contract is up in the city before they renew the contract for that lucky one company to run the wires. So there is NO chance any other company can come along and run their own wires/cable. In this scenario, therefore, there is no way to have a choice because the municipality decided who the monopoly is for you.
If you really want competition and still preserve the 'you run your own cable, you're the only one who gets to use it' mentality, then get the federal government to superscede local municipalities authority to limit who can run wires, and make the easements available to all. Until then, linesharing is all there is to keep competition.
This is a good thing! (hopefully) (Score:2, Insightful)
Re:Beautiful (Score:4, Insightful)
The Mastercard model (Score:2, Insightful)
Catastrophe (Score:3, Insightful)
Clearly it must be stopped.
Their goal is to reduce the ownership of all user-facing internet services to a managably small set of large owners. Coincidentally, these will be the big media and phone companies that are threatened by the internet in the first place. When all the independents and smaller players have been eliminated, and less than a dozen RBOCs and cable operators control all broadband (and thus almost all internet access) in the U.S., they will kill what threatens them by simply raising the price.
Some number of months from now, users will find that their ISP has suddenly renegotiated their deal. The new choices will be cheap but brutally capped broadband that is useless for P2P, streaming media, and VoIP... pay-per-K offerings that ensure these things are prohibitively expensive... and classic, "business class" $1,500+ T1-style service.
Surveillance of users will become not only more pervasive but more standardized, as the Internet trust announces trade groups and landmark deals that support both police and "private" law enforcement efforts.
Of course, in addition to prices going up, this guarantees that investments in new infrastructure (to provide better services) will now entirely cease. Without competition to threaten offering anything better, the bells and cable companies will do what they have always done (before TA96). Absolutely nothing.
Oh, you thought the cable companies and bells would compete with each other? This one really slays me. Why spend billions competing when you can just form a trust and price-fix instead? This is capitalism 101. And when the number of players is that small, it's virtually guaranteed to happen.
I know, I'm a paranoid lunatic. None of this could really happen here, right? I mean, just because it's already happening in Australia, Canada, and England... pure coincidence.
Of course, this tragedy will cause lots of collateral damage. The first victim that comes to mind is the video game industry, which has lots of innovative, "harmless" uses for massive, cheap bandwidth. There are many others as well.
But for all you folks watching in amusement as the big players stumbled trying to crush P2P, VoIP, etc. with lawsuits and bribed-legislation, this is the other shoe dropping.
On the bright side, the market for wireless technology might be looking up... that is, until the FCC turns out to be less than forthcoming with licenses, rules, and considerations necessary to allow wireless broadband alternatives. Watch for it.
Re:It's times like this ... locust 802.11b/g! (Score:2, Insightful)
Damn I hate that bitch.
There is a group mentioned on slashdot a while ago that has finished work on mesh-AP routing. Locustworld [locustworld.net] Has also got hardware pre-built, and software to D/L. Ma Bell dosn't want compitition huh? How about no customers as well.
Damn I hate that bitch. A Lot.
Free market disobediance? hmmm.... Sorry if I sound a little crude in this post, but I am so damn mad I could just *censored*!!!