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.
Re:It's times like this ... (Score:3, Interesting)
Powell Stinks (Score:1, Interesting)
DSL. (Score:5, Interesting)
My two other options were (ATTBI which is now over $60 w/o CATV, or IDSL through IIRC Covad for $90).
So what did it do for me? Nothing. I am still stuck with a service I am not entirely pleased with (the speeds are fine, it's the price increases and the conversion to Comcast that I am not happy about).
Interesting (Score:5, Interesting)
Charman vs Commisioners (Score:5, Interesting)
Say goodbye to inexpensive DSL... (Score:5, Interesting)
It's time for the phone company monopoly to end - it's obviously not working for the interest of the consumer.
Re:No DSL and no Jolt make Homer somthing, somthin (Score:3, Interesting)
This of course means that DSL can have the same restrictions put on it that cable does (no incoming requests, no servers, no static ips), which I'm sure will benefit "fighting terrorism", 'cuz we all know that terrorists run their own web servers from home via DSL.
*sigh* Anyone in the Michigan area want to share-lease a T1?
Finally the bells can use their *property* (Score:1, Interesting)
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.
This is a good thing even if it is not the socialist position.
there is a *small* upside (Score:5, Interesting)
Re:Solutions (Score:5, Interesting)
Points of View (Score:3, Interesting)
Cable modems currently dominate in market share.
Basically, they say, "There won't be any competition in broadband access because we can't compete with Big CableTV".
This is a joke, unfortunately, many people see it their way.
The thinking is... "We don't have enough time to do what is right, we just want to make sure we at least get an Oligopoly out of this."
The whole thing is a joke, and I'm actaully kind of happy that Cable will rule the day. I consider them the lesser of two evils. Also, I like the way cable franchises are granted much better than the original consent decree that split up AT&T.
The little companies get hurt. Ma Bell is just too powerful, end of discussion.
AT&T ought to hold onto their cable a little longer. But, they've got just too much debt.
Too bad.
Re:Interesting (Score:5, Interesting)
The Bells have been dicking people around for ages, why not return the favor?
The Net closes in. (Score:3, Interesting)
When I was a small business systems consultant I frequently encountered a problem with SMTP. The DSL lines for a certain baby bell would not pass outgoing email if the "from:" field did not contain the approved domain. I likened it to the post office refusing to deliver mail that was placed in a box with a return address not on the block where the box resides.
If these companies can lock down these networks, then average users (those not interested/willing to manipulate email fields) are going to be "forced" to use the email domain of the provider as a return address. This provides these baby bell ISP's with a MSoft-ish method for bullying users into using their products (as opposed to just competing on the basis of quality).
This is anti-competitive, un-American and anti-capitalist.
Well, maybe not the end of the world (Score:4, Interesting)
First, just about every DSL provider in my area is already offering Phone to go along with DSL. Most of the DSL only providers in all areas died in 2000/1.
Additinally what to stop a DSL only provider such as Covad to start "offering" voice. They could charge $900/line to get around the FCC rules. Nobody would buy it, but at least they could still sell their DSL.
This passed despite heavy dissent? (Score:4, Interesting)
Excuse my ignorance (I'm Canadian), but if the majority of the FCC is opposing it, how did the plan get decided upon?
Nationalize! (Score:5, Interesting)
Too bad most consumers are so scared of socialism, even though it has a place in situations like this. Ironic, that socialism could give us a truely free market.
The lines run through public property. They cross millions of private property boundries. They should be a public resource.
Then the Phone Companies could compete on products and service. And the Baby Bells would probably all go under in less than a year after exposing their actual incompetance in a suddenly open market.
Re:Difficulties .. and Wireless (Score:2, Interesting)
Here's a question though.. Do you really WANT every company and its brother running unsightly wires all over the place (or ripping up your roads to bury them)? Talk about duplication of effort, which hackers are supposed to hate..
Also, aren't the service poles and underground rights-of-way owned by the State, ergo giving the state a say in how those resources are used?
Corrections to the Summary (Score:5, Interesting)
ILECs have not been forced to share their lines at cost. That is a myth invented by the baby Bells to convince lawmakers that linesharing makes them lose money. Actually what the 1996 Telecom Act says is that they have to rent their lines to outside customers and they must charge everybody the same rate, including internal customers.
A popular stunt among the ILECs [webopedia.com] is to rent lines to their own internet divisions at way below cost, thus making their internet business seem more profitable than it is. The 1996 Telecom Act just evens the playing field in that respect and prevents the Bells from using their local loop monopoly to prop up other corporate divisions.
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.
This is actually not as bad as it sounds when you consider that FCC Chairman Michael Powell *spit* wanted to completely sweep away ALL the regulations that require the ILECs to share lines. His proposal was defeated with respect to local phone service because Republican commissioner Kevin J. Martin jumped the fence and sided with the Democrats. So while this may suck for Covad, Speakeasy, etc., at least it won't totally eliminate DSL competition for now.
Probably both sides are going to be unhappy about this. Expect this battle to go to the courts next.
This article [washingtonpost.com] has more good info.
Re:there is a *small* upside (Score:5, Interesting)
Re:DSL. (Score:2, Interesting)
I don't consider cable to be a viable alternative to DSL for me, because the upstream of Cable sucks. If affordable DSL (through locally-run companies) goes away, I'm jumping on the Wi-Fi bandwagon.
(For those of you wondering, VISI is formally owned by a bigger company, but it is still run by the same old geeks who defected from Winternet to establish it. Call their support line, and you get one of them on the phone.)
Re:No DSL and no Jolt make Homer somthing, somthin (Score:5, Interesting)
Entirely Bell's investment? (Score:2, Interesting)
Finally the bells can use their *property*
Who bought the initial infrastructure? Was it entirely Bell's investment, or did the local governments pitch in some funds as well?
Define "reasonable" (Score:3, Interesting)
If it's just the cost of maintaining the line, then where's the incentive to put in new lines and roll out new services?
Re:Finally the bells can use their *property* (Score:4, Interesting)
Is it "socialist" to ask for fair access and competition on lines my tax dollars helped pay for? The ONLY portion of the network Covad uses is the high-frequency part of the local loop. They have their own data backbones and switches. All they want is a way to connect that to your house, on a part of the phone line (which you already pay the phone company for) that they are not using unless you already have DSL. And they have to pay the same amount the phone companies charge their own DSL divisions for each line.
Re:No DSL and no Jolt make Homer somthing, somthin (Score:4, Interesting)
Hey, that's an idea! Demonstrate VoIP for the dingbats at the FCC, to reinforce the idea that any ISP (owner of the lines or not) can do voice service!
Re:It's times like this ... (Score:3, Interesting)
So what are the Canadian requirements on ILECs concerning CLECs (line-sharing, colocation, etc.), non-carrier ISPs, etc.? I went to the CRTC Web site [crtc.gc.ca], but none of the "Statutes and Regulations" appeared to address that, and there are a ton of "Decisions, Notices and Orders" but I'm not going to plow through all of them. (Even a Google search for canadian regulations CLEC line-sharing turned up a pile of stuff the first items of which didn't seem to directly address the question.)
Re:It didn't work anyway (Score:3, Interesting)
I signed up for USWest's DSL service. They were extremely prompt about installing everything so they could start collecting money from me.
After it was up and running, I called USWest and changed ISP's. They had no wiggle-room for fucking up the line, since it had obviously been working fine for the two months that USWest was my ISP.
I reccomend this tactic highly.
Bigger problems with DSL (Score:5, Interesting)
If I were to try to move, I would have to do two things. 1. Stay at the current address until the deal is setup at the new one, phone line is installed, DSL is working, THEN cancel the old service and move. This will increase the cost of moving substantially. 2. Ensure that the real estate agent or landlord understands that it's a deal-breaker (escrow money is refunded, deposits returned) if it turns out DSL is not available, and that it might be a month after closing before this is discovered. I'd need that explicitly written into the contract, and absolutely clearly understood by everyone involved.
If I'm looking at a piece of real estate, I want to know what utilities are available, as the very first items to evaluate. I want to know if it has running water, electrical service, natural gas, if there's garbage collection, telephone service, cable tv, and, DSL. Since my career depends on the internet access, it's actually on the same list as running water and electricity. And I can actually work around the lack of water and electricity, but if there's no DSL I'm stuck.
So, why can't I find out BEFORE getting involved with a piece of real estate, whether it has this service available? Also, what kind of approach can I take to force the issue? I don't want to sign a contract or a lease without knowing in advance whether I can get DSL, what signal rate it will support, and what providers will offer the service.
Re:What on earth are they thinking? (Score:2, Interesting)
The market was oversupplied because for comparatively little capital outlay any Joe and his brother could form an CLEC and "offer DSL" resold off the ILEC's network as mandated by the FCC.
It's competition, and it's good. Changing the rules like this is nothing more than protectionism for these companies
What the hell is "competitive" about forcing companies to share their networks with some low risk/low capital Johnny-come-lately after they had to risk billions in capital to build their broadband infrastructure?
It's nothing but socialism and government meddling in the private marketplace.
Great News ... (Score:3, Interesting)
WISPs are the answer. (Score:1, Interesting)
I've now signed up with a new local WISP who's giving me 2 fixed ip addresses and 11Mbps to the tower, but only 1.5Mbps from there to the backbone and about a dozen customers are sharing the tower right now for only $45/mo. Not too shabby but my DSL provider had better general overall thruput at the same 1.5Mbps (they had better routing provider) before they went belly-up.
Is this a way around it? (Score:2, Interesting)
Re:Powell Stinks (Score:1, Interesting)
The fix is:
Tax relief for companies that keep workers, and SEVERE tax penalties to companies that layoff workers.
Um I'll stay anaon on this,
I would not want to be labeled a terorrist.
Who are those people breaking down the door ?
Re:Clue for you. (Score:3, Interesting)
Nope, it's your cable. They built it on public easments with monopoly protection.
First, the cable in most places wasn't paid for by the government; easements, yes, hardware, no. The exceptions to this general statement are in places where the cost of installing the cable and hardware could never have been recouped (sparse rural areas, etc.) over their lifecycle; and that was paid for by the government by a universal connectivity tax imposed on the customer base ... a tax which is still imposed on every line, in spite of the fact that "universal connectivity" was achieved two generations ago.
Further, the monopoly protection was granted in return for nearly 100 years of delivery of government mandated QOS guarantees, universal access, interoperability and standards compliance that have driven world telecom markets, a steady tax stream (collected by the Bells on their dime for the FCC and local governments), rental income on many of those public easements, government mandated rate structures, etc, etc, etc. The government granted phone monopoly has for a very long time been a cash cow for the federal government, and local states take in a big chunk of revenue as well. The monopoly grant was a tit-for-tat public-good agreement that has long since been paid off, because it achieved its objectives of universal access to a nationwide publicly accessible switched voice network.
Now demands have been made that others can use those lines AT COST
And you'll find that the ILECs don't really argue against access (they might if the opportunity presented itself, but that isn't their main objection). Their argument is that the definition of AT COST is unfair and discriminatory. The definition in force until this FCC decision of AT COST only allowed the inclusion of ongoing direct maintenance costs, and that even those numbers were being low balled by regulators (according to the ILECs). The ILEC argument is that AT COST should be defined in terms of total LIFECYCLE costs, particularly since maintenance is such a relatively small fraction of the purchase-installation-maintenance-disposal cycle.
The ILECs further argue that by being kept out of markets like cable TV and long distance (remember, THOSE companies are not being forced to provide access to their infrastructure, at ANY cost) that they are being unfairly forced to shoulder a cost burden that no other telecom grouping is being asked to provide in return.
Does that really lead to a lack of investment by the ILECs? I don't have a clue; I'm sure that it is part of the issue, but there are certainly others. But it seems to me to be a fundamentally unsound premise that a long ago repaid, mutually beneficial, regulated monopoly agreement between the government and a private industry (an agreement, by the way, that was ruled to be illegal, and forcibly broken by the federal courts) can be used today to prop up competitors who are not being asked to provide very much in return...
Re:Interesting (Score:4, Interesting)
Personally, I would have liked to have seen a stronger Telecom Act -- split the infrastructure from the service providing units competely. Continue to regulate the infrastructure company, and deregulate the service company completely. The infrastructure company would make money by charging the service companies what is costs to to provide the infrastructure. This is essentially what the Telecom Act tried to do without actually breaking up the Baby Bells. And the Bell lobbyists and PR folks have earned their money selling the FCC and people like you a long line of shit.Indeed, that is bullshit, because that is not what was required by the Telecom Act. All that was required was that they charge external customers the same price they charge their internal customer. If they aren't accounting for the actual costs internally, that's their problem.They do support it quite a bit, however. Why don't you see if you can start up a phone company and run some copper parallel to SBC's in your neighborhood. SBC will sue your ass out of existence (based on their protected status) so fast it'll make your head spin. Similarly, start up a company that runs electric lines parallel to your Electric company's or cable lines parallel to your cable company's. Utilities are protected monopolies.It's not less than the cost of the line.
Fuck 'em. Break 'em up again. Do not allow the government subsidized and protected infrastructure company provide service. And don't regulate the service company. But don't protect them either. If the Bell service company pays $15/mo for a loop, then any company should be able to get a loop for $15/mo. And if the Bell service company pays $25/mo per sq. foot of CO space, then any company should be able to get CO space for $25/sq foot. Like I said, that's what the Telecom Act tried to do in a half-assed way. But the Bell's pockets are too deep. And now you'll have a choice to use you cable company's monopoly broadband with restrictive ToS or you local Bell's monopoly broadband with restrictive ToS.
-Craig
Simply not true (Score:2, Interesting)
There has never been a spending bill or investment like that since.
I honestly dont know where you get this:
Yeah, the problem is though that the government subsidized the creation of Bell's infrastructure in the first place.
because it's just not true. This parent should be modded wayyy down. Right of way is purchased, not given freely. The government did not subsidize, at least not in the scale you and so many other slashdot posters seem to believe.
Disruptive technologies (Score:3, Interesting)
If the DSL providers compete on a different level they can win this. This decision was a result of the FCC being bought by the telcos. Plain and simple.
A new idea: Physical Infrastrcuture Companies. (Score:3, Interesting)
However, with the modern approaches to communication, the Baby Bells need to be broken up in another way I have not yet seen mentioned:
Separate the dial provider from the infrastructure provider.
Check this out: You RBOCs would be split into two separate entities, your dialtone providers, and your cable-line providers.
Unfortunately, the infrastructure generally lends itself to a natural monopoly, similar to electrical service...but in most places, we can choose our energy provider...but still need to pay the distributor.
This could work well with phone service. Once company would own and maintain the infrastructure, and provide the physical path for anyone who make service available on it. Then the costs of the line would have to be paid by the service providers you choose, be it Covad, Verizon, or AT&T.
It would be nice then, because any companies could provide competing service if they all have to cover essentially the same wireline costs to reach the consumer. However, if the bells get to keep the whole ball of wax, then there'll never be any good service.
I've got my Covad IDSL line because I have no restrictions on what I can do with it...and I have a block of IPs. Compare that to the "business-class" Verizon DSL and cable modem service, and I get one IP...no routable netblock...and a ton of service restrictions (i.e. no servers).
In short, unless the physical plant is made into a separate operating company, we will never truly have competition for telephone service.
Solution that will never happen... (Score:2, Interesting)
Basically, and this is only my opinion, of course, but the only real solution that I see is to remove services from infrastructure. Let a single recognized monopoly exist that does one thing: owns the copper. Thats it, nothing more, and never allowed to provide service.
Then bill access out to any and all comers from Sprint and AT&T to Billy-Jim's Telephone and Crab Shack to provide the actual voice and/or data. If there is ever a new technology that needs to roll out, let the cost of the system be shared between the infrastructure company and those service companies that see themselves as providers of that service.
But that is an even more drastic change to the telecommunications industry than was the Bell breakup.
It would be nice, but so much for my well-supported Earthlink/Covad DSL...
What will come out of this (Score:3, Interesting)
So what happens now? Once the rules get fully phased in, the rates will rise as the telcos milk their monopolies on internet service. At some point, someone will complain, the government will step in, and internet service will become a regulated monopoly.
In the end, I don't think that'll be a bad thing. Local telephone service is a regulated monopoly, and it's been pretty good so far. But it might take awhile to get there.
Cable companies too... (Score:2, Interesting)
This is why someday wireless is going to be king. Can't wait.
Re:Why is this a problem? (Score:3, Interesting)
Only those that are natural monopolies. There's only one road directly outside your house. There's only one gas line in. There's only one electric main. One phone line. One cable.
Some things are natural local monopolies due to physical resource limitations.
Re:Solutions (Score:3, Interesting)
Besides, why would you say the ILECs is doing so poorly right now? They're certainly not tanking like some industries, and although the general telecom isn't doing so well, that's also counting in things like the paging market (flying downward) and all the third-party DSL providers.
Yes, they're laying people off... they're also paying huge bonuses to their CEOs.
Funny thing is... (Score:3, Interesting)
But I guess the slashdot editors would rather bitch about it in retrospect than do something about it beforehand.
It's more of a question of cheap/lazy providers... (Score:3, Interesting)
WHICH PARTS are "deregulated" are KEY... (Score:3, Interesting)
Let's get this straight. Line sharing doesn't create a disincentive to invest, because the network ALREADY exists. Secondly, We need to stop pouring our money in copper networks. Cutting line sharing was the worse thing the FCC could have done for the deployment of broadband. This will effectively kill the competition (Covad), who has played a key role in deploying broadband where the Bells didn't want to. This was a retarded move.
WE NEED TO INVEST IN FIBER NETWORKS.
We do this by forcing entrant competition to build thier own facilities and fiber networks (THESE ARE THE NETWORKS YOUR DON'T WANT TO SHARE). Facilitiy based competition will truely help in lowering costs, create new jobs, build a redudancies in our important communications network, and lastly give Lucent, Nortel, and the shot in the arm they need by giving them new business.
The Bells and Democrats just used your own conservative zealotry against you, and turned slashdotters against thier best ally, Michael Powell, who would have kept line sharing.
That's how dichotomies are played...
Thank You (Score:2, Interesting)
Competition in long distance has worked. It can work for the local telcos too.
Why can't we just change the local telcos into line-lease companies. The actual phone service and "high frequency" service portions of the company could be split off to compete fairly with Covad and other DSL providers.
Re:Interesting (Score:3, Interesting)
In some markets, yes. In some markets, no. In many places the bells have paid and/or continue to pay for the exclusive rights to their poles. This is one reason why ricochet ended up putting POPs in malls and such.
It also wouldn't have had the demand necessary to roll out DSL until recently. In most places the copper isn't really good enough to support it to the usual "quoted" maximum of 17,000 feet.
The solution isn't to punish the telcos, the solution is to promote alternative solutions. UWB, for example, if the FCC allows more widespread deployment. The cable systems are an excellent example, and if AT&T thought they wouldn't be more legal trouble than they're worth at this point, they'd be doing VoIP everywhere they currently do cable modems. (It's coming, but not near fast enough.)
The telephone infrastructure is a necessity to the modern way of life, at least until cellular gets cheaper, or POTS gets more expensive. As technology marches on, and more CPU power becomes available in smaller packages, we'll see the POTS network eventually replaced by a mishmash of everything else.
I'm not saying that telcos shouldn't be regulated and watched carefully, but I think it's unrealistic to expect them to aid their competition. There's really no benign way to manage that kind of relationship, someone will always be taking advantage of someone. In addition, there's only so much copper. A future infrastructure might be easier to share, but we aren't quite there yet.
Re:No DSL and no Jolt make Homer somthing, somthin (Score:1, Interesting)
Re:Interesting (Score:2, Interesting)
If you become frustrated with your inability to persuade others then perhaps it is time to reconsider your own beliefs. Maybe there is a reason why so many disagree with you.
The CLECs pay the ILECs the same for the lines as the ILECs pay themselves...
Regulating the lease rates of those lines supresses infrastructure growth because the rates which the FCC sets are below the level at which ILECs can recover investement made to upgrade the infrastructure. That not only the CLECs, but also the ILECs pay too little to recover upgrade costs makes the problem worse, not better. So this point which you make in support of the current system is in fact additional evidence against it.
Fair is fair.
It is exactly that attitude which caused this mess. The goal of making broadband service cheap and available to the CONSUMERS has been subordinated to the goal for all BUSINESSES to have equal, "fair is fair" access to profits. If we want consumer broadband to progress, then we want businesses which provide better value to the consumer to succeed. What we do not want is "fair is fair". In fact, we want harsh discrimination. Specifically, we want discrimination against providers which provide poor value. One problem with these FCC price controls is that the value which broadband service providers offer can not be discerned because they do not pay true costs. Hence companies which provide poor value survive, gobbling up resources.
With your "fair is fair" advocacy your primary interest is business: you are concerned with the equal distribution of profit between businesses. My primary concern is the consumer: Any distribution of profit between businesses is fine with me so long as it is one which results in more bandwith to me for less of my money. And we know something about how that distribution looks: its is not one where every business pays the same costs for bandwidth, as you advocate be imposed. Instead, it is one where the smarter and more efficient businesses pay less.
Those lines are build on public land with tax money. ...If you think sinking government money into a private company in return for nothing is a good idea
If you believe that government funds should not be spent for the benefit of private corporations, then you should advocate against that. You do not do that. Instead you advocate for regulation of those corporations.
I pay taxes. Some of the money which the government collects from me it spends on infrastructure which benefits private telecom corporations. What you advocate is that, because of this arrangement, governement regulators should be granted power to regulate the telecom market. Those regulations sustain wasteful corporations by guaranteeing "fair is fair" access at below market rates while discouraging investement in infrastructure by blocking off from the investors the profits realized from their investment. The result ? poor service to me at high rates. Your remedy for government screwing me once is that it screw me again.
Your attitude appears to be "the government is screwing me by making me buy telephone equipment for the regional telecoms. Therfore, the government should screw the telecoms to get back at them. I am getting fucked and they benefit from it, so they they should get fucked also, "fair is fair". That is a stupid attitude. The correct attitude is that nobody should get fucked, not the taxpayer, not the regional telecoms; Government should not compel me to buy equipment for the telecoms and it should not compel the telecoms to sell at particular rates.
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?
Dude, really, Post hoc ergo propter hoc ?