Companies urge FCC to drop open access idea

[Modelworks]

The greedy communications companies are at it again. They can't stand the idea of losing their monopoly hold on consumers. The idea that they might have to lease the last mile to other companies at the same rate they pay for it scares them to death.

Competition is such a nasty word to ATT, Verizon,etc.

http://voices.washingtonpost.com/posttech/2009/11/the_cable_and_telecom_industri.html

The cable and telecom industries have called for the Federal Communications Commission to scrap a controversial Harvard University study on broadband Internet. At issue is an assertion in the report that nations that adopted open-access policies had greater success rolling out broadband to its residents.

The Berkman Center report says:

Our most surprising and significant finding is that “open access” policies—unbundling, bitstream access, collocation requirements, wholesaling, and/or functional separation—are almost universally understood as having played a core role in the first generation transition to broadband in most of the high performing countries

In comments due Monday to the agency, the operators of those networks including AT&T, Verizon, Comcast and Cox challenged the report's findings. They also said the main author of the Harvard Berkman Center study is a biased long-time advocate of net neutrality policies. The FCC commissioned the study from Harvard's Berkman Center for Internet & Society. The agency will use the study and other outside opinions and analysis as it comes up with a plan, mandated by Congress, to bring high-speed Internet to all American homes and businesses and help get people to use the technology.

"Unfortunately, the Report prepared by the Berkman Center is neither comprehensive nor objective," the National Cable and Telecommunications Association wrote in its comments. "Ignoring the commission’s request to perform a thorough study of all the factors potentially affecting broadband deployment and adoption, the Berkman Report donned blinders for any issue that did not fit its agenda of promoting government mandated access regulation."

 

[spidey07]

The Berkman center report was funded and commissioned by the FCC, of course it's going to agree to their agenda of more government control.

 

[ayabe]

The Berkman center report was funded and commissioned by the FCC, of course it's going to agree to their agenda of more government control.

Spoken like a true peasant.

Why are you defending a monopoly? More competition = more speed and lower prices.

 

[Genx87]

Spoken like a true peasant.

Why are you defending a monopoly? More competition = more speed and lower prices.

It will still be a monopoly even if you allow ISPs to ride the last mile.

I can definately see where the company that made the capital investment to put fiber in the ground wouldnt want somebody else to benefit from that investment at cost.

This is an example of one poorly thought out system imo.

 

[spidey07]

Spoken like a true peasant.

Why are you defending a monopoly? More competition = more speed and lower prices.

The telecom industry is one of the most competitive ones in existence. Monopoly not found.

 

[brblx]

The telecom industry is one of the most competitive ones in existence. Monopoly not found.

HAHAHAHAHAHAHAHAHAHAHAHA

and the reason all the gas stations near your house have the same prices is because of competition, too, right?

the word you all are looking for is oligopoly, or more basically, a cartel.

 

[Genx87]

HAHAHAHAHAHAHAHAHAHAHAHA

and the reason all the gas stations near your house have the same prices is because of competition, too, right?

the word you all are looking for is oligopoly, or more basically, a cartel.

Typically gas stations make nearly nothing on gasoline sales. The market is very competitive. They run the price do to the bare minimum. Also many states have laws that require stations sell their gasoline at cost + %. They cant by law go any lower.

 

[Modelworks]

It will still be a monopoly even if you allow ISPs to ride the last mile.

Not so. Look back at the number of ISP in 2001, thousands of them. Then look at ISP in 2004. Less than 5% of those remain. What changed ? The 2002 FCC law removing the requirement that they lease access to the lines.

I can definately see where the company that made the capital investment to put fiber in the ground wouldnt want somebody else to benefit from that investment at cost.

This is an example of one poorly thought out system imo.

The companies haven't done as promised though. They got to where they are now by lobbying congress and making promises for things they never delivered. The public did their part by paying the higher fees and the companies got their tax cuts and special considerations but never delivered.

 

[brblx]

what i'm saying is that having a group of companies selling something for the same price is not competition, no matter where the prices come from. no one in the oil market is clamoring for lower prices to increase business, and neither are the cable or phone companies. it's a service that nearly everyone is going to use, so no one find it worthwhile to cut into their profit margins for the sake of competition.

the price of gas is influenced by the price and availability of oil, that's about it. the profit will always be there.

 

[Genx87]

Not so. Look back at the number of ISP in 2001, thousands of them. Then look at ISP in 2004. Less than 5% of those remain. What changed ? The 2002 FCC law removing the requirement that they lease access to the lines.

My point is the company who owns the line will still own that line after this change. No new players are entering the market in who will be delivering physical lines.

I'd also be interested in seeing how many ISPs from 1995 were around in 01. I suspect independent ISPs were on a decline before the FCC changed their minds.

The companies haven't done as promised though. They got to where they are now by lobbying congress and making promises for things they never delivered. The public did their part by paying the higher fees and the companies got their tax cuts and special considerations but never delivered.

Ok? And how does allowing a competitor onto their physical lines without the capital investment risk change any of that?

Like I said, our system is messed up in this regard. But I can definately see their complaint as being valid.

 

[Genx87]

what i'm saying is that having a group of companies selling something for the same price is not competition, no matter where the prices come from. no one in the oil market is clamoring for lower prices to increase business, and neither are the cable or phone companies. it's a service that nearly everyone is going to use, so no one find it worthwhile to cut into their profit margins for the sake of competition.

the price of gas is influenced by the price and availability of oil, that's about it. the profit will always be there.

Sure if colusion is truely happening that isnt competition. But your example imo was a poor one becuase at the pump competition is huge. It may be one of the most competitive markets in this country. It is so competitive the oil companies try to stay out of the business because they make more money simply selling the oil than selling the end product.

The price of gasoline in some extent does follow the price of oil. But I am saying the price you see at the pump is the lowest you will find due to competition. Often times the stations run into state law that prohibits them from going any lower. The profit in a gas station is not at the pump. It is in the attached convience store.

 

[spidey07]

what i'm saying is that having a group of companies selling something for the same price is not competition, no matter where the prices come from. no one in the oil market is clamoring for lower prices to increase business, and neither are the cable or phone companies. it's a service that nearly everyone is going to use, so no one find it worthwhile to cut into their profit margins for the sake of competition.

the price of gas is influenced by the price and availability of oil, that's about it. the profit will always be there.

You're kidding right? Cable and telcos are beating each other over the head for triple play customers, stealing customers from each other based on price and price alone. I wasn't kidding when I said it's an extremely competitive industry. Also go bid out an internet circuit to say 10 ISPs and see what prices they come back with. Even at the wholesale level there's a lot of difference in price.

 

[Modelworks]

My point is the company who owns the line will still own that line after this change. No new players are entering the market in who will be delivering physical lines.

I'd also be interested in seeing how many ISPs from 1995 were around in 01. I suspect independent ISPs were on a decline before the FCC changed their minds.

They would still own it but not be allowed to offer IP on those lines. It requires separation of the company into two parts. One provides only local infrastructure, the line to the home and is not allowed to sell IP for that line only lease it. The parent company that does sell IP would lease lines from that company at the same rate as all other providers. Local public utility laws would apply to control what those fees are.

Ok? And how does allowing a competitive onto their physical lines without the capital investment risk change any of that?

The capital investment spent by these companies is stolen money. They made agreements with congress that were very clear, you give us $$$$ we will provide x . They never did, instead pocketing the cash or merging companies to get out of the agreements.

The telco are so greedy and dirty it is sickening. Both verizon and ATT formed shell companies so they could buy the auctioned wireless spectrum as 'small business owners' allowing them buy spectrum that they could have never bought. It is an old practice, they form a small company, get what they want, then merge that company back into the parent.

 

[Genx87]

The capital investment spent by these companies is stolen money. They made agreements with congress that were very clear, you give us $$$$ we will provide x . They never did, instead pocketing the cash or merging companies to get out of the agreements.

The telco are so greedy and dirty it is sickening. Both verizon and ATT formed shell companies so they could buy the auctioned wireless spectrum as 'small business owners' allowing them buy spectrum that they could have never bought. It is an old practice, they form a small company, get what they want, then merge that company back into the parent.

IMO this is seperate topic all together. The FCC doing this changes nothing of that and wont get other players to plant the physical liines either.

 

[Modelworks]

IMO this is seperate topic all together. The FCC doing this changes nothing of that and wont get other players to plant the physical liines either.

Some people cannot get fiber installed because the companies do not see the cost vs benefit. That is why it is rolled out in high population areas, not because of need but greed. If an area is already served by fios why does ATT spend the money to install uverse ? It is because of the density of customers and potential profits.

If the local lines to the home are not owned by one company then independent contractors are likely to begin putting in new physical lines to under served areas because now they don't just have one company who can use the lines but 10, 20, 30+ , making the return on the investment much more likely. If I only had one customer to sell my product too, I wouldn't invest money either.

 

[Genx87]

Some people cannot get fiber installed because the companies do not see the cost vs benefit. That is why it is rolled out in high population areas, not because of need but greed. If an area is already served by fios why does ATT spend the money to install uverse ? It is because of the density of customers and potential profits.

If the local lines to the home are not owned by one company then independent contractors are likely to begin putting in new physical lines to under served areas because now they don't just have one company who can use the lines but 10, 20, 30+ , making the return on the investment much more likely. If I only had one customer to sell my product too, I wouldn't invest money either.

I thought all this did was allow ISPs to lease the last mile from the big telcos???

 

[charrison]

Not so. Look back at the number of ISP in 2001, thousands of them. Then look at ISP in 2004. Less than 5% of those remain. What changed ? The 2002 FCC law removing the requirement that they lease access to the lines.

I am going to guess a significant number of those were dialup ISPs. There were not very many that actually got into dsl reselling and yes a few those dsl resellers still exist today.

 

[jackace]

I thought all this did was allow ISPs to lease the last mile from the big telcos???

So if we want to open up competition for more providers we would need every last provider to run wires to every home? That just isn't a practical solution in my mind. Especially when many of the providers have been given incentives and tax breaks by national and local governments to run their cables. Many of them were also allowed to setup their infrastructure before building occurred which is much cheaper and easier then coming in after the fact.

So the question becomes how do we take what has happened already and get to a place where most areas have more or any choice in their providers?

 

[lupi]

The telecom industry is one of the most competitive ones in existence. Monopoly not found.

the day a second cable TV company knocks on my door offering tv and internet service I'll let you know.

 

[charrison]

the day a second cable TV company knocks on my door offering tv and internet service I'll let you know.

Since many states have relaxed their cable franchise laws, it is happening. The build out from the telcos will require time.

meanwhile you can get tv from OTA, satalite, cable and internet from cable or telco.

 

[Hacp]

This is another example of how government regulation can hamper innovation. Get rid of all government regulations and restrictions(like the cable franchise requirements in NYC) making it expensive for new companies to plant new lines. Once you reduce the barrier of entry, more lines will pop up overnight and the cable companies will have no choice but to reduce prices.

Its the same thing with cell phones. The government restricts airwave frequencies, then sells them to the highest bidder. Make all the carrier frequencies public domain. That will give cell phone companies the incentive to build more towers per square mile. The more towers, the less interference from other cell phone companies, the better the signal. Instead, we have cell phone companies that build the minimal amount of towers per square mile because they can be confident that no one will interfere with their signals.

 

[dmcowen674]

Republicans want prices to keep going up so only the rich have access to the high speed.

The problem is as more ordinary Americans can't afford high speed there won't be enough dial up lines to go back to because the Telco's ripped out the old PSTN copper lines.

America is fucked by design.

 

[xj0hnx]

the day a second cable TV company knocks on my door offering tv and internet service I'll let you know.

Same here. I've called the other cable companies here in town, none of them can provide service to my area, they say they haven't acquired the rights to the lines yet, though honestly, none of their prices are very competitive at all.

 

[Modelworks]

This is another example of how government regulation can hamper innovation. Get rid of all government regulations and restrictions(like the cable franchise requirements in NYC) making it expensive for new companies to plant new lines. Once you reduce the barrier of entry, more lines will pop up overnight and the cable companies will have no choice but to reduce prices.

You will never get competitors to install new lines in an area because the cost is too great. It is impractical to run a new line to a home every time someone else wants to provide service. That is where regulation is needed to make competition possible. If you place the local lines under public utility law and then lease those lines to those wanting to use them and use the money to cover the cost of maintenance and improvements that allows users to pick whoever suits them best. If someone wants to provide a service the local lines cannot provide, lease fees to that provider could be raised or the cities users could decide if an upgrade was worth an increase in cost. It wouldn't be the decision of a corporation . The FCC had the law in place to allow fair leasing of lines until 2002 when the lobbyist got it repealed.

Its the same thing with cell phones. The government restricts airwave frequencies, then sells them to the highest bidder. Make all the carrier frequencies public domain.

The FCC was founded shortly after the invention of radio. The reason for its founding was because there was no regulation of the air waves. Everyone had a radio station, sometimes 20 in a city using whatever frequency they wanted. Walk out your door you got one station, a block later another and many times several stations at once. So the FCC was created to stop that situation.

That is why you need regulation of frequencies.

 

[Modelworks]

I am going to guess a significant number of those were dialup ISPs. There were not very many that actually got into dsl reselling and yes a few those dsl resellers still exist today.

The reason the drop in ISP is so great is because telco made it impossible to run a business and lease the lines. DSL reselling died because there was no profit for anyone but the telco. They would lease the lines but at rates like $45 for the line and the ISP could add whatever service to that. But at $30 for the DSL + $45 for the lease that would be $75 a month per customer and nobody could stay in business. The only ISP that survived were ones that got good deals and those are dying now because telco are telling them they don't have any free lines to get out of lease agreements.

If you look at the pattern of the laws changing it is clear what telco had in mind.
Early 1990's - dialup internet - telco tried to sue providers like AOL because phone lines were tied up for hours each day, they wanted a premium added to dialup users for every hour used. Telco had not built up local networks and did not want to invest so everyone could use the lines all they wanted . Sound familiar ?

1996 - telecom act - made data and voice equal as communications. Seemed like a win for consumers, but the telco had other plans. They went to congress and got regulation dropped on the amount of profit margin allowed with promises they would use that money to have broadband 45Mbps lines to all homes by 2004. They made billions and never carried through. New Jersey has actually sued verizon and ATT for breach of those agreements, why other states don't follow I dunno.


1999 - Requirement telco lease lines to providers at cost as a peace offering to the FCC for not having done as promised in 1996, there were now thousands of ISP and the telco were not hurting for cash. They were charging $4 for features like call waiting , their cost 5 cents . No profit control so they could rape the consumer now. Before with regulation the most they could have charged would have been 30% or about 7 cents.

2002 - FCC repealed rules requiring leasing of lines , telco could lease lines if they wanted but were not required to lease. They told the FCC this was needed because they didn't want to invest in areas if they had to share the lines.

It took them just over 10 years, but they got what they wanted in the early 1990's.