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The Almighty Buck

Letting The Market Choose Decent Broadband 307

An Anonymous Coward pointed out this piece on the regulation (and more to the point deregulation) of broadband Internet service. The article takes the viewpoint that solutions possible by relying on "the human spirit of innovation and creativity" are a better antidote than most of the broadband reforms so far proposed by politicians on behalf of lobbying groups. The author takes a stance some people may consider unrealistically optimistic, but makes some good points about the effects of arbitary deregulation.
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Letting The Market Choose Decent Broadband

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  • by shagoth (100818) on Wednesday August 15, 2001 @09:14AM (#2119873) Homepage
    This piece pretty much ignores the fact that in most states DSL services were already pretty much unregulated which is what allowed the babybells to run roughshod over Covad, Northpoint and Rhythms. There is simply no consumer recourse for being hosed over by the telco on data services once you cross into the realm of the unregulated services. Sticking to T1s and ISDN at least holds things in the realm of tariffed and therefore state regulated services. This has to date been the only reason that these services haven't been totally consumed by the telcos as DSL has been.

    The consumer has already spoken in the marketplace only to find their DSL providers driven into bankruptcy at least in part due to predatory practices by the telcos. Predatory monopolies are bad, mkay.
    • Telecom is, throughout the US, one of the most thoroughly regulated industries. Ever since the new regulations (which were called deregulation) were passed, the FCC has been aggressively regulating the "deregulation" process. And we see the results.

      What I'm amazed at is the pervasive idea that somehow regulations help the smaller competitors. In fact, quite the opposite is true. Regulations always favor those with the biggest lobbying efforts. And once they're in effect, it's always more cost-effective for a big company to comply with the regulations than it is for a small competitor. Or, if they want them changed or if they want an exemption, it's more cost-effective for a big company to lobby for it.

      When there's a billion dollars at stake in the political arena, a company can spend $900 million on lobbying and still make a profit. This is not a system that favors innovators and smaller players.
    • The reason these DSL providers failed is they borrowed and spent a fortune to build out their networks. But the customers didn't show up. Then their revenue streams weren't enough to cover the interest payments on their debt.

      If your interest payments are $200 million a year, that's a lot of DSL lines you have to sell. Not to mention you don't get all the revenue from the line. The reseller gets some, Verizon gets some and then finally Covad gets a little. Stupid management is what banrupted them. That's why Covad is issuing stock for debt, to keep the interest payments.

      No matter. I work for a start-up telco and were picking up a lot of business from the failures. Ex-Rhythms customers should help us a lot.I bet our sales force is already picking a few up.

      The secret is not to take on $5 billion of debt and build a nationwide network before you get a single customer. The company I work for is expanding little by little as we expand our customer base.

    • Even if the service is regulated, the large companies still run roughshod over the smaller companies and the consumer.

      How long does it take PacHell to setup DSL as opposed to another company, that must wait on PacHell? Or, @home blocking port 80 because some people are stupid enough to run Windows servers, but not unblocking.

      Since the wires are already in place, the playing field is not level.

    • The telcomms really missed out in the dial-up arena because they did not think that they would turn a profit. This allowed some of the current access giants (AOL, etc) to get established, for better or worse. Don't expect them to give up another opportunity like that so easily, since now the financial gains are all but assured. They own the fiber optic cable (most or all) that is possbily the next big means of non-wireless transmission, too.
    • It just shows that anything that perturbs the free market is going to cause problems. Having a telco Monopoly thats sucking even just a fixed 20 bucks from every phone pretty much gives them as much money as they need to have free reign elsewhere. Who does this remind you of?

    • You would be correct, except for one small thing...

      The local telco's are all government mandated monopolies.

      In my neck of the woods, Pacific Bell is the only company legally allowed to operate local telephone service. Thus, they own the lines. They are also in the DSL business, selling service at half of what anyone else can sell it for. You want to offer DSL you have to pay Pacific Bell, your competitor, for the priviledge.

      Connecting through your cable company is an alternataive, but again, the same situation applies. You cable company is also a government mandated monopoly.

      Telephone and cable lines are scarce commodities. Unfortunately they have been parcelled out according to political whim instead of through market forces.
  • by namespan (225296) <<namespan> <at> <>> on Wednesday August 15, 2001 @12:40PM (#2120693) Journal
    Only two things will prevent a monopoly and create the kind of free market that will actually evolve towards providing better services:

    1) The network is publically administered, giving everyone an
    equal opportunity to sell services using it (I think ALL utility
    networks should have a public base).

    2) Every provider has their own network

    There isn't any other way. We made a half-hearted stab at #1, requiring telcos to sell use of their networks to those who wanted to start up, but things haven't been administered fairly enough to bring about the desired results. What the market is sortof lurching towards is #2 -- a cable network, perhaps a few wireless networks, and phone wires.

    So our friend is right in the sense that the free market will eventually come up with alternatives down the line of #2. I'm not sure about his treatment of the phone lines. Arguing that the local phone cos have exclusive property rights to the phone networks falls somewhere between semi-reasonable and dubious. For one thing, the networks fly
    over or run through public lands and private lands not owned by the phone company. For another, the concept of property is given out by the people/law/government/social contract/shared fiction that we all agree is good and useful to live by in general... but we also have a history of regulating anything that becomes a public utility. With good reason.
  • From the Libertarian tract (which some may call the article):

    The politicians are missing something in their proposals: faith in the human spirit of innovation and creativity. Where there is a demand the market tends to supply.

    Tendency is all well and good ... except when you live in an area where the you wind up either ponying up a lot of money or do without. Our family was living in a rural area where the only residential high speed internet options were ISDN at $120/month or some sort of of dedicated line (the telco wasn't clear on this) at $400/month. One other option was one way cable modem; upstream used a modem. DSL service was not available.

    Now we live in a major metro area. Not only is DSL available, we have ... well, did ... have a choice of DSL providers. We orginally signed up with Flashcom which was an ISP using NorthPoint networks. NorthPoint and Flashcom parted ways so we got transfered to Telocity (with a rate increase and change of email address). Then we all know what happened to NorthPoint. Our service was disconnected for about two months before Verizon (nee ATT&T/Bell Atlantic) became our network provider. Then Telocity was bought out by Direct TV which is now it seems going to be bought out by either Murdoc's News Corp or EchoStar.

    We've been DSL customers for less than one year. Without lifting a finger we've bcome subject to the whims of five different coporations. Excuse me if I'm less than thrilled with the power of the market.

    The best way to foster this type of innovation is to get the government out and let the free market work its magic.

    Sorry, but I don't believe in magic. It's difficult to tell before hand whether regulation will help or hinder in any given situation. I have no reason to believe that the author's crystal ball is better than my raisin bran reading.

    Weakening the property rights of existing networks and requiring them to share their systems with competitors will quash innovation.

    Unsupported assertion. It may or may not. Just as nature abhors a vacuum, business craves monoply.

  • Municipal networks (Score:3, Interesting)

    by Jeffrey Baker (6191) on Wednesday August 15, 2001 @12:32PM (#2127488)
    I've said this before on Slashdot, but I'm not tired of saying it yet. The trick to getting people in cities connected is for the people in the cities to own their network infrastructure via their government. Lay fiber all over the city, punch a connection into each home and business, and run the other end into central offices. Then, let the owner of the home or business hook the central office end of their wire up to whatever they want. Charge service providers rental space in the CO, but do not regulate what can be installed there, nor by whom.

    I'm convinced that this is the ideal solution. No company should be allowed to own critical infrastructure. Only the people should be able to dictate what services they want hooked up to their network.

    • by namespan (225296)
      That's an interesting idea.... would municipalities then connect into the telco backbones? Or would the county create its own backbone(s), and those would connect to the state backbone(s), and then to nationwide backbones.....

      The other problem.... I think in general that having public networks for ANY vital utility (and then letting lots of companies compete to provide services via that network) is a wise thing. I'm just not sure how the networks get built in the first place... I am a little worried about private expertise vs. public expertise in such things. Then again, cities do it with sewers....
    • This is an interesting idea, provided that the city authorities are competent. I live in San Francisco and can tell you that if the SF government ever got into this it would be an unmitigated disaster.

      Look at your local government: do they keep the streets clean and paved, buses running on time, crime under control, etc.? No? Then why do you think they will somehow get fiber right?

      (If your govt. is that good, then yes, this might make sense. Palo Alto tried it, as I recall.)

      • I live in SF too. We have a compact city which is perfect for this style of retrofitting. We are already used to XYZ Underground Corp. digging up the streets every week to lay yet another wire. We have the highest bus ridership in the nation, even though the buses don't have a schedule. We have a virtual absence of violent crime, compared to other cities of our density. Our road pavement barely rises to third-world quality, but that is mainly due to XYZ Corp, mentioned above, digging up the street and leaving a laughable repair afterwards.

        You are right that such a thing should not be attempted until after the mayor is assasinated.

  • by JoeShmoe (90109) <> on Wednesday August 15, 2001 @09:47AM (#2128811)
    ...ISPs stop bundling services that people don't want don't need to offset higher costs.

    If I want a webhost, then I can contract for the best webhosting provider. My ISP shouldn't matter. Right now I have four, count them four, webspaces that I am basically being taxed for by my various ISPs, but would never dare use because I have zero faith in their reliability. I'm paying for news servers that have speed-limited connections and don't carry any binaries groups. I'm paying for seven e-mail accounts that i have to throw away if I ever change ISPs, get filled with spam on a regular basis, and are POP3 only.

    Why is my $40/50 going towards crap like this? I don't want any of it. I understand that the ISP is a cutthroat business but to me it still constitutes illegal bundling of services.

    I want a basic IP dialtone. I think it should be provided as infrastructure by local government. It makes no sense to have four providers of high speed internet service running four lines to every neighborhood when for the same piece the city could run fiber and then lease it to any ISP that wanted to offer service. I am willing to see my taxes go towards that.

    As far as webhosting/e-mail/etc I will run those myself. For anything I lack the experience to run, I'll sign up on my own. Everything is a la carte, that is the best way to foster competition and a healthy selection of services in a market where everyone pays based on their actual use of shared resources.

    - JoeShmoe
    • I want a basic IP dialtone. I think it should be provided as infrastructure by local government.

      I'm sorry, this is the most ignorant concept I can imagine. If you would like to see what government-sponsored Internet looks like, talk to Europeans whose PTTs finally were de-nationalized.

      Moreover, I can assure you that your local government will not carry, they will probably only provide you with "filtered" Internet that meets the "moral requirements of government." And when your Internet goes down, they will proceed at "government speed" to fix the problem, the kind of speed that comes from workers whose jobs are 100% safe no matter what they do, and they have no stock options.

      Why is my $40/50 going towards crap like this?

      Because you cost these companies $40/50 a month. The ones that don't charge you that will go out of business. "Extras" are thrown in to try to justify the price. But trust me, many many ISPs around the country are close to going under, and trying desperately to find new revenue avenues.

      Internet-as-commodity is already bringing about a consolidation in the ISP market. The few mom & pops left will always have to charge more than the national/international players.

      That said, while dialup IP prices are steady, you get a heck of a lot of Internet for your buck over broadband. Cable modem users I know are seeing real 1 Mbps download rates for under $100 per month. DSL users I know are getting 500kbps downloads for $30-$50 per month.
      • And when your Internet goes down, they will proceed at "government speed" to fix the problem, the kind of speed that comes from workers whose jobs are 100% safe no matter what they do, and they have no stock options.

        Good point... Someone I respect was lamenting that people were beginning to actually seek out government jobs, because (in his view) traditionally it's been people who couldn't find a job anywhere else that took a government job. While this certainly isn't a universal quality (some people seek out government jobs because they get to control people, others for various reasons, etc), the point is - Do you want the guy (probably an MCSE) who can't hold down a tech job anywhere else keeping your internet connection running? But that's how government works..

      • So then let's take the opposite viewpoint...why don't we privatize everything?

        Let's have three companies providing water:

        "I'm sorry, sir, you are 7500 yards from the supply depot, so you can only get reclaimed sewage water service."

        Five or six providing garbage service:

        "Gee, honey, isn't it great how everyone on our block gets 4AM garbage pickup on a different day so i never oversleep?"

        Oh, let's make the roads private while we are at it:

        "Thank you, please drive a miles and stop at the next toll booth."

        Infrastructure should not be redundant. As badly mismanaged as you think governments are, they can't possibly be worse than the resources wasted as several companies reinvent the wheel. Local monopolies were started to get around that problem. It used to be that in California, we didn't have to worry about getting enough power. We had local monopolies that ran everything, with strict community oversight. Then things were deregulated and suddenly nobody wants to pay to fix infrastructure that someone else was also using. So things didn't get done and now we are in a big mess. This is progress?

        We didn't worry about not being within reach of phone service. We had local telco monopolies that provided it, again with community oversight. Then suddenly they were deregulated and other companies began to provide service, but everyone had to play by rules established by the local telco long ago. As a resuly, competition dies out and we are left with a local monopoly but now without the oversight.

        Water, power, gas and connectivity (telephone/cable/data) should all be done by a single contractor according to standards voted by the local community. In the middle of Nowhere Iowa if the community doesn't want anything more than dialup service, so be it. In net-centric SF if the city wants fiber even in homeless shelters and the taxpayers are willing to pay for be it.

        And maybe you don't understand what "basic IP dialtone" means. It means that local governement is no more responsibile for managing content than PacBell is making sure I don't sign Happy Birthday over the phone without paying royalties or talking dirty on some adult chat service.

        And there is nothing wrong with charging people based on usage. I wouldn't mind paying more for my cable modem to get a higher level of service. The problem is, because they decide and there is nothign I or my local government can do to change it, I'm stuck with what I got.

        - JoeShmoe

        • In northern Montgomery County, Maryland, trash is private. Infact, my mother-in-law just switched to a trash service with better service. Competition in action.

          Running 10-20 fibers to each house is no big thing. I concur that running 10-20 sewer/water/gas/electric lines might be a bit tough.
        • California screwed up de-regulation by making it impossible for utilities to pass on rate increases to customers, while at the same time California electric companies were prohibited from entering into long-term contracts for purchasing power. Try reading California Energy Crisis: What's going on, Who's to Blame, and What to do [].

          I know what "Basic IP Dialtone" is. The difference between IP and voice is that IP text data can be analyzed by machine. If you don't think the right-wing and left-wing nuts would try to clamp down on porn going over your "Basic IP Dialtone", you must have been asleep for the last few years as we have fought off Internet censorship law after law, not to mention mandatory filtering at schools and libraries!
        • Actually, in Denver (or at least in Lakewood) garbage collection is privatized and we have a choice of three or four different companies. It's actually rather nice, yes they do come on different days but they come just a bit after most people leave for work so it's really not a problem.

          That really doesn't address the other points at all, I just wanted to note that private garbage companies work out just fine.
      • I want a basic IP dialtone. I think it should be provided as infrastructure by local government.

        I'm sorry, this is the most ignorant concept I can imagine. If you would like to see what government-sponsored Internet looks like, talk to Europeans whose PTTs finally were de-nationalized.

        I disagree with the response and agree with the original poster. In fact, I've been arguing this with people "in the industry" for literally YEARS (at least as far back as 1995). The way I see it, what we need is the following:
        • Quasi-Public fiber (or fiber/copper hybrid, I'm willing to settle at this point) infrastructure to every doorstep
        • Operated by the government (or some private entity, but with heavy controls, regulation, QOS guarantees). Possibly a not-for-profit operation, owned by the gov't, run by private contractors.
        • Standardized hardware boxes for taking fiber/copper in and spitting out:
          • Telephone (multi-line, etc.)
          • Cable TV (digital, HD, etc.)
          • Ethernet
          • anything else...

        • Providers pay per-month, flat charge to the infrastructure operator to cover wire, hubs, whatever.
        • Everything software configurable and addressable.

        My classic example is I call up my cable company. Tell 'em to take a hike. Hang up. Call up a 2nd cable company. Give them my credit card number (or whatever). Hang up. Go down to the basement. Count to ten. Turn on the TV to the same lineup, same channels, same hardware, but different provider.

        Or do the same for phone (though I'd have to make the second call from a cell phone!)

        Will this ever happen? Of course not. First, you gotta get everyone on the same page for the communications specs. Then you have to get people building the network interface boxes. Some big, thorny, cooporative issues there.

        The one thing that I could, maybe (when I've been drinking too much) see happening would be for the Baby Bells to get broken up, into infrastructure (the wires and such) and services (dial tone, dsl, etc.). The advantage there is that the wires are already in place.

        *sigh* It'll never happen. There's no technical reason this can't work, but it'll never happen.

        • I think your idea may work at first, but once the standards are in place, it won't evolve. The sticking point would be the "anything else..." part.

          For instance, if your system had gone into place when ISDN was "the leading edge", right now they would still be working with standardized boxes to make ISDN ubiquitous and nobody would have broadband.

          I just think that these kind of things always end up tailored for the least common denominator and don't allow you to throw everything out and try a new technology.

          But maybe I'm just taking exception to the "standardized hardware boxes thing". It would be interesting to "own" my own strand(s) of fiber to some public office and sign something to say that "I choose registered service provider 0020043 to connect to the other end".
    • I am willing to see my taxes go towards that.

      The problem with your model is that you'd not just be putting your money toward what you want; you'd be confiscating my money at gunpoint to go toward what you want.

      Please keep your whims out of my wallet.
      • Same old argument that has been made about government-sponsored abortion programs, $40000 ugly sculptures in front of city hall, and $9 billion dollar spy planes.

        If you don't want to see your taxes spent on something you don't want then vote against it. But if you lose the vote then shut up and pay because the IRS doesn't accept the "I don't like how you are spending my money" defense.

        - JoeShmoe
        • But if you lose the vote then shut up and pay because the IRS doesn't accept the "I don't like how you are spending my money" defense.

          The same argument could be made against your complaints against the telco.

          We can go back and forth telling each other to shut up if we don't like something, but I suggest that this is an asinine position and if you honestly think discussing something after it's already been decided is not a legitimate thing to do, why the fuck are you reading Slashdot? And posting?
    • I think it should be provided as infrastructure by local government.

      I'd rather go offline and buy pr0n at 7-11 than subscribe to Internet.Gov. I'm amazed at the opinion that the government can do anything better than the private sector.

      Oh, and by the way, we at Internet.Gov will be installing Carnivore []. Don't worry, we have to get a court order to enable it. Honest.

      Telcos and ISPs may be bad, but I'll take them any day over a government yoke.

      • Rather than repost everything I just said in the thread above this one, let me just simply remind you that GOVERNMENT BUILT THE INTERNET in the first place.

        Now that they want to control it simply means that we all have to abide by those controls or find something new (I2 anyone?)

        - JoeShmoe
        • How many ways can you be wrong? Acadame built ARPANET (with public funds, yes) in an environment of complete benign neglect. Count the RFCs and see how many had politicans or political appointees as authors. How many even had civil servants as authors? It's a bad example of how government tends to run ongoing affairs. And that was just the ARPANET! The Internet came later and government was even less involved.
  • by CrackElf (318113) on Wednesday August 15, 2001 @10:13AM (#2132723) Homepage
    "The best way to foster this type of innovation is to get the government out and let the free market work its magic."

    Well look at what happened in the OS market with microsoft ... the free market and its magic. Now we have an OS that costs more than a new hard drive. I happen to get my dsl here in the states from a baby bell (bellsouth), because they make it 'easy' for you to get it from them, and hard to get it from their competitors. The result - cheap service, horrible support (i refuse to legitimize it by using the word technical, because they are about as technical as my grandmother, who is afraid of email), lots of gratuitous outages, no static ip, and lots of technical errors (I am going to change over, which, again, bs makes overly complex and difficult). My point is that when a single powerful entity that is funded from another source (in this case telephone revenue) where they have a stranglehold on the transportation medium, the free market fails. The service does not get better through competition.
    • Well look at what happened in the OS market with microsoft

      Yes, I can run MacOS, Linux, FreeBSD, NetBSD, OpenBSD, BeOS, and about a thousand other OS's.

      Currently, I can only get DSL, and it is a toss-up between Covad (who will probably go under soon), or Verizon.

      Keep in mind GOVERNMENT REGULATION GOT US TO WHERE WE ARE TODAY WITH BROADBAND. Specifically, the granting of local monopoly telecommunication franchises. Our government created little Microsofts back in the 30's. Thanks guys!
      • Sir, your caps key is stuck. Err. If I recall correctly, the Government had to break up ma bell. Then they forced 'competition' by requiring that other services (be started ... allow to be started ? IANAL, and I do not recall the exact language anyway). If that had not happened, it would still be one big bell with no competition. And, not only would they still have a distinct advantage in the dsl market, but they would be able to present a united front.

        Currently I can only get dsl through either bellsouth or someone who rents from bellsouth. Those that rent from bellsouth are at a disadvantage, and thus are more likely to go under, and thus fewer people subscribe to it, and thus bellsouth has the advantage (that does not even get into the whole marketing to everyone that get gets a phone thing, again using their monopoly in one area to bolster another, thereby bypassing the whole competition thing that is supposed to make service better for the consumer.) Bellsouth also puts an artificial wait time to allow other dsl providers to install on their lines.

        How can you claim that the situation will get better by itself? The only people that I have met in person who seriously propose that are employees of Bellsouth.

  • I was doing my daily tech reading at work today and came across this tech article [] about the fight over the "last mile" in California.

    In a synopsis, this article basically describes the fight that the ILEC's are facing against the Baby Bell's everywhere. To the point where this group of ISP's has filed a complaint with the California Public Utilities Commission on July 26 that charges SBC's Pacific Bell with favoring its own broadband service over competitors' services and trying to make ISPs sign an unfair contract that limits their rights to phone lines they lease.

    And if this doesn't solve the problem - to pursue further court litigation.

  • by ben_tarval (512334) on Wednesday August 15, 2001 @12:29PM (#2135146)
    "Gates has declared the unacceptably slow rollout of high-speed Internet connections to be the primary barrier to improving the high-tech economy."

    Does anyone else find it sadly amusing that the world's biggest monopolist is whining about the limiting effects about other big monopolies? However the fact that Bill Gates is finally admitting that monopolies do indeed hinder the high-tech economy is a step in the right direction. :)

    But guess what? Now that the Baby Bells have nearly killed all their DSL competition, and raised their rates, they are now targetting the independent ISPs! "ISPs in California are accusing SBC Communications of trying to run them out of the broadband business." See this article at []

    So the ISP's are next, and they may go down just like the CLEC's did. Unless the Justice Department steps in and breaks up the Baby Bell monopolies. Knowing how long this takes, it makes me wonder if the independent ISPs will survive.

  • I've got to say that the way a company handles problems with its service is the most important thing to me, secondary to both speed and price.

    I have AT&T @Home Cable and Verizon DSL. The DSL usually gets me about 750/100 Kbits. With cable I sometimes get over 3 MEGA bits per second. However, given a choice I'd ditch the cable before DSL. Here's why: In two months of service I have had two extended outages with AT&T. Both have been the result of AT&T Cable's stupidity. When the TV cable folks come by every month or so to do an audit, they invariably disconnect my internet connection because I'm not also a Cable TV subscriber.

    This means I have to call AT&T @home, who have to schedule a service call, usually more than a week later, and I have to be at home ALL FREAKING DAY waiting for the tech to arrive. I'm serious. The hours they gave me were "sometime between 8AM and 6PM." It means I have to take an entire day off work just to get my service reconnected when the imbecils should not have even disconnected it in the first place! It's a case of AT&T's right hand not knowing what the left one is doing.

    Say what you want about Verizon. I'll admit that their DSL speed sucks compared to cable, but I'd much rather have a crappy connection that WORKS, even if I have to pay $80 a month for mediocre DSL, which is what I pay now through Verizon. I'm considering complaining to the Public Utilities Commission about AT&T.

    That's why I say that the technology does not matter, as long as they can deliver the service and treat their customers decently.
  • by Animats (122034) on Wednesday August 15, 2001 @01:49PM (#2139363) Homepage
    One wonders if the anonymous coward who posted the article is its author.

    The current US DSL regulatory structure sucks for a number of reasons. But they're not the ones that sophomore mentioned.

    • Without regulatory pressure on the incumbent telcos to open up their lines to competitors, there wouldn't be any low-cost DSL. Look at ISDN or T1 pricing, which is a monopoly service.
    • The current regulatory structure doesn't permit the state public utility commissions to set quality standards for DSL service. The "market" is supposed to do that. When all the local providers other than the telco have died off, this is a big problem.
    • DSL may make money someday, but right now, it isn't a moneymaker. The only reason it was deployed was fear on the part of the telcos and dumb money during the Internet bubble. What really scares the telcos is voice over DSL over cable replacing telephony.
    • The current "deregulation" of DSL has the market cut at points that work badly technically. Telcos have to provide DSL through a separate subsidiary, which results in too many organizations being involved in a single install. And the DSL connection has to be backhauled from the central office to various ISP points of presence, which costs money and doesn't provide any end user benefit. On the other hand, the DSL subsidiary can provide web hosting, E-mail, and content that could easily be provided by anybody. (The same is true over on the cable side, which is why AOL is into cable.)
  • The bogosity meter pegs every time I hear this kind of verbiage. "Freedom", "innovation", endless faith in markets to fix everything. Here's some countering verbiage: "Democracy likes markets but markets don't like democracy." This kind of American-flag-wrapped faux-populist deregulationism is nothing but an expression of the will to power of dominant corporations.
  • When I got DSL, I had 2 choices. One of them was Telocity, which I ended up with because:
    • DHCP + fixed IP
    • Linux friendly (including Linux installation guidelines for their kit in the manual)
    • Geek friendly - they explicitly allow you to run servers of any kind, as long as you're not doing anything "commercial"
    • Very reasonable downtime (it's only been down once in 4 months)
    • The one time I needed support, I spent less than a minute on hold, and it took them less than 5 minutes to solve my problem.
    My OTHER choice was Verizon. Guess which one I chose. :-)

    I don't know how successful Telocity has been. All I know is they got bought out by Directv and now they're known as Directv Internet. I haven't noticed any difference in service yet, but given that Directv is considerably bigger than the former Telocity, it's probably going to start getting worse after they complete the assimilation. Bottom line is, as far as I can see Telocity was a competitive company, offering way better service than any other DSL provider in the area, but the market didn't help them much. Maybe the market *was* the reason they decided to sell out. Maybe deregulation can only help the big sharks...
  • by isdnip (49656) on Wednesday August 15, 2001 @09:48AM (#2142578)
    I'm amazed that /. wastes its front page space pointing to junk like this. It's just some undergraduate practicing his P.R. flak skills by rewriting some tired Bell company propaganda, washed liberally with conservative ideology.

    But where's the free market when the Bells (and ohter ILECs) were granted their monopolies, which prevented anybody else, until 1996, from putting in competing facilities at all?

    But where's the free market for "innovation" when the "wireless" options cited by the college kid author are, indeed, virtually nonexistent, under a government spectrum policy (remember, the airwaves are REGULATED) that is now aimed at maximizing license auction revenues? That results in high cost-per-bit cellular clones and ever-more-concentrated commercial broadcast groups. Wireless unlicensed options are very limited, by design. Satellite is limited by both spectrum availablity and the speed of light -- "innovation" isn't going to change the value of c.

    Where's the free market when an incumbent monopolist is allowed to use their monopoly power (the stuff John D Rockefeller was notorious for) to crush any competition? Where's the free market when the Bell companies use every trick in the book to prevent living up to their legal obligations?

    There are, of course, two different views of "free market". One is that the government shouldn't interfere with monopolies. The other is that the government has to limit monopoly power in order to let market forces work. Clearly the undergrad author is in the former camp, the "let's bend over and let the monopolies rule us" camp.
    • washed liberally with conservative ideology

      I agree completely with everything you said, but this line made me LOL! Thanks :-)

      P.S. Well, I disagree with one thing, your comment about "maximizing license auction revenues" -- if the FCC (rather, Congress) wanted to maximize the revenues, they'd lease the spectrum rather than sell it.

    • The phone company monopply exhists because we don't want our countryside clutteded up with phone poles and wires. If you know of a good way of getting around this monopoly on phone lines, please share it with us. The problem with the so called deregulation that was done with the phone company is that it doesn't address the problem on the monopoly the phone company has on the lines. There's no realy way a bunch of government regulations can ensure that the phone company provides proper access to their network for other companies. The level of level of oversight needed would require a network of observers to go out on service calls with technicians, verity that lines were being allocated fairly, and audit the phone company in a variety of ways. That would cost a fortune, and eliminate the benefits that could be gained through competition. Instead we have insufficient oversite, unfair competition, and a bunch of regulations that increase the costs of all the companies in the telophony business. I agree that phone companies need to be regulated to make sure they provide the required services at a reasonable cost. However, the regulations requiring these monopolies to open their markets don't seem to be working. They aren't provideing real benefits to consumers. If you want real competition in the market, you need to split the phone companies into a part that has a monopoly on the network itself, and a part that competes on even grounds with others to provide services to consumers. Forcing this restructuring on the phone company would be very expensive, and in the end may not be cost effective either.
      There's no real way to get rid of the phone network monopoly, but other technologies such as cable and wireless are beginning to provide competition to it. The article suggests that the laws that "deregulated" the phone companies were misguided and ineffectual. The author believes, and there is some evidence to suport if from other countries, that the phone companies would have upgraded their networks and more consumers would have access to DSL if the government would have just left them alone on this, and let competition come from other sources.
      It's not a view that government shouldn't interfere with monopolies. It's a view that the government often interferes when they don't need to, or in ways that don't help. The regulations the government placed on the phone company in the guise of deregulation don't seem to have resulted in lower proces, and because they seem to be inadvertantly limiting the availability of DSL, they are harming DSL's ability to compete with cable modems, and harming consumers.
    • by TheSync (5291)
      But where's the free market for "innovation" when the "wireless" options cited by the college kid author are, indeed, virtually nonexistent, under a government spectrum policy (remember, the airwaves are REGULATED) that is now aimed at maximizing license auction revenues?

      There are plenty of unlicensed and trivial-to-get license bandiwdth available for wireless broadband. The tough part is building the network. Look at Metricom Ricochet, which just went under, for instance, whose last-mile was Part 15 unlicensed 900 MHz and delivered better-than-ISDN to mobile receivers.

      With regards to satellite, you can get broadband Internet service from geostationary satellites today. For much of the US, this is your only solution.

      In the near future, we can expect stratospheric airships or solar-powered aircraft to provide a satellite-like service to major cities without the ping-time issues of geostationary.

      Of course, I share the feeling that the FCC should make it illegal for any locality to grant monopoly telecom franchises, including phone/cable/fiber-to-home.

      Rural residents should pay the true cost of their rural lifestyle, while those of us who choose to live in high-density areas should benefit from a range of services provided by a competitive market.
      • Unlicensed networks like Ricochet aren't allowed enough power/range to be profitable -- that's the idea! Metricom was caught between having enough base stations to meet needs and having enough customers to finance them. The numbers never converged. Unlicensed wireless works best in rural areas, especially flat ones.

        The money for sky-borne relays has dried up with the rest of the industry. Don't hold you breath for those airships. Even if the FCC were to grant spectrum to them.

        And it has been illegal for a municipality to grant exclusivity to a cable franchise since 1992. States grant telco franchises, which have been non-exclusive since 1996. There are overbuilders, but the economics aren't great. Check out RCN's quarterlies. From a financial perspective, access to existing ILEC loops is the most viable competitive solution.

        I agree that rural areas get too much of a subsidy. But even then, the subsidy mechanism should be made available to competitive providers. That's *theoretically* possible but CLECs have a very hard time getting it. Western Wireless and McLeodUSA may have qualified.
        • And it has been illegal for a municipality to grant exclusivity to a cable franchise since 1992. States grant telco franchises, which have been non-exclusive since 1996.

          That's great! But I assume it isn't retroactive, i.e. existing telcom monopoly franchise grants are still in effect until they run out.

          Actually, I suppose that explains why my cable company is ramping up to provide telephone in my area soon. Hurrah!
  • It seems to me that telephone service (and thus internet service that runs over the telephone network) ought to be regarded as a public utility. It is clearly necessary for living in America, and something like 97% or more households have a phone.

    So why doesn't the state just force the bells to sell them the lines, and then lease management responsiblity for the lines back to the bells? It would be a zero-sum transaction, but having the state own the lines would force them to play by fair rules. As long as the bells control the lines, they can play all sorts of games to keep others off. If the state controls them, and leases management back to the bells, suddenly the state can effectively police the lines to ensure everyone has a chance.

    Why hasn't something like this been done already?
    • Internet access a necessity? Time to get a reality check.... All of these complaints about market forces and deregulation miss the biggest point: If you don't like the service choices, start your own company. If the economics of it makes that impossible, {huzza!} maybe THAT is why no one can compete. Hmmm....
      • Nobody can compete because the telcos erect artificial barriers to entry. Read horror story reports about the finger pointing that goes on between telco and ISP. Funny how the telco gets its act together when they are the ISP.

        As a company, you can only endure that for so long until your customers get pissed and jump ship to the telco for this ISP, because they just work...

        That's the real problem, and as long as the telcos control the lines, it will continue to be.
    • As long as the bells control the lines, they can play all sorts of games to keep others off. If the state controls them, and leases management back to the bells, suddenly the state can effectively police the lines to ensure everyone has a chance.

      The local governments currently grant monopoly telecom franchises. They do this theoretically to provide service to all, and to not allow telecom providers to cherry-pick the best customers. In truth, the monopolies were granted also due to political influence of the telecom providers...

      If you truly want competition, you need to throw away the notion of "universal service." I personally think this is the way to go. No monopoly franchises. No subsidies. No regulation. Everyone pays the true price of hooking them up, and all telecom providers are invited to the party to compete, be they coax, fiber, or twister pair.

      The local governments think monpolies are just fine. How are you going to change their viewpoint?
  • by JWhitlock (201845) <John-Whitlock @ i> on Wednesday August 15, 2001 @09:56AM (#2143182)
    Ah, the ol' blind hand of capitalism. "Remove regulation - the consumer will decide the marketplace!" This arguement only works when the consumer has a choice - otherwise, the fittest (baby bells) will just take over, then sit on their haunches and limp along (Sorry - no DSL for you. Don't call us, we'll call you. In the meantime, were you thinking of moving?)

    I tried to get DSL, from the local baby bell even, for months. They never came out and told me "you are just too far from the CO". It was always, "we need to send a technician out, to see if there are any problems with your line. You'll need to be at home, in case you need to unplug phones." Finally, I had to go to DSL Reports [] to get the real scoop - I was borderline, and probably wouldn't like it if I got it.

    So, I decided to try cable. The NEXT DAY they were at my house installing it, ignoring their own contract to install it in an inside wall, going through the attic. This was a snow day too, that many decided was too bad to go into work. I've had two outages since then, and I'm a very happy customer. That's Cox Cable of Tulsa, BTW.

    I can see what they are doing, though. The Bell is dragging it's feet, while Cox is agressivly upgrading it's equipment, partially with Cable Modem subscriber's money. Soon, they will be the only game in town, and then, if they can do it, they'll offer phone over cable for a similar rate. If it was cheaper, I may have to go that way, or take the plunge, drop my land line altogether, and get a cell phone.

    And that's why I'm a suppporter of deregulation - not because I think the slow-as-molassas Bell will suddenly pull themselves into the 21st Century, but because the evil merging cable companies should get a shot at the telephone market in a few years. Now THAT would be some true competition.

    • I know what you're feeling. I'm moving into a new apartment very soon. I've been pricing various local service options. My local phone provider, Frontier, offers (up to) 3 Mb/s DSL service for $40/mo, but, they require that you have normal phone service from them. Since I already have a cell phone, I have no need to get their stinking phone service. Although I'd rather have the DSL line to myself, I'm going with cable and its shared (up to) 2 Mb/s for less money since I was going to get cable anyways.

      Oh well... Frontier gets $0 from me.

  • It amazes me how some people can oversimplify a complex economic issue, such as in this quote by the author:

    But cut through the abstraction and the debate really comes down to a philosophical question: What is the best way to solve problems, more government or less?

    But I suppose I really shouldn't be surprised when I look at the byline:

    Jason Miller is a sophomore at Michigan State University.
  • by gelfling (6534) on Wednesday August 15, 2001 @09:37AM (#2157398) Homepage Journal
    DSL like its ISDN ancestor are simply bullshit smokescreens that Bells pretend to offer so that they can claim unfair advantage of OTHERS in order to get rate protection. Don't you get it? Bells have no serious intention of offering broadband because they make too much money from low bandwidth analog phone lines. If they dick around for a 10 years or so putting up some fake DSL then they can claim that the reason it's all so hosed is because of the evil CLECs, ILX's and cable companies getting some bogus unfair advantage. Ergo the Bells, since they are the corporate underwriters of many Congresspersons, get to pressure their legislative suppliers with better rates and terms.
  • by scott1853 (194884) on Wednesday August 15, 2001 @09:33AM (#2157489)
    Once a company becomes a monopoly, they use their power to wipe out the playing field. They do this by failing to provide services to small competitors, or by giving away free products that competitors are charging money for. They know this is anti-competitive when the perform these actions. They know that the end result could be litigation and end in regulation. But the decisions are made, knowing full well that regulation would come only after a couple years in the courts. In the mean time, the monopoly is flourishing, the execs are making a fortune by patting themselves on the backs with bonuses, and if it comes down to being dragged into court and it looks as though the money may stop rolling in, the execs resign. The people that made the decisions got rich, and they're going to keep the money, so what do they care?

    The only way to stop this kind of behavior is to provide a fast way of monopolistic evaluation and possible regulation. If the execs knew that they wouldn't have time to screw everybody over for their own personal benefit, then they most likely wouldn't. Personally, I'd like to see regulation over any behavior involving a monopoly. A government official that works onsite, that can immediately ask the question "Why's it taking so long to respond to your competitors request", would be a good thing.

    Of course, that's just my opinion, I could be right.
    • I've worked as a contractor for the government before. There were a considerable number of civil servants who's job it was to to oversee us and to make sure we were doing our jobs well. They were nice people, who tried to do their jobs well, but they rarely had much of an idea what was going on. They weren't very technical people. If you require highly technical people, then someone will sue because they felt they were competent enough, and that they were being discriminated against. Their jobs ended up being to try and guess if they could believe us when we told them we were doing a good job. They would investigate complaints, but it's it's easy to provide doubt that you did something wrong, even if you did. No one likes someone going around pointing fingers, and there people have to work with you wether they like it or not.
      In the end you have ineffectual oversight, that costs a lot of money. The costs of that oversight are passed on to consumers either through a direct tax on the service, or some other tax. In the end consumers get less for more.
      Needless to say I got out of government contracting. The politics were frustrating, and there was just too little of an incentive to do a good job. There were some people who continued to do exelent work in that environment, but it was burning me out, so I left.
  • by Dr_Cheeks (110261) on Wednesday August 15, 2001 @09:28AM (#2157637) Homepage Journal
    We've got exactly the same thing happening here in the U.K. British Telecom has been told by our telecomms regulator (OFTEL) to open up the local loop to competitors, but it's dragging it's heels. And since OFTEL doesn't exactly have a huge amount of power, the situation isn't changing too quickly.

    Add to that rumours and allegations of stuff like BT giving it's own (not particularly big) ISP the lion's share of DSL connections while the two biggest ISPs in the country get a pathetic fraction of the broadband lines (AOL and Freeserve), and I guess a lot of people are going to be waiting a long time for broadband on this side of the Atlantic too. And seeing as I live in a fairly rural area (as rural as anywhere in the West Yorkshire conurbation gets anyway), I guess I'm not going to see any high speeds at a reasonable price for my home machine for several months yet.

    • As a UKian with ADSL [whoohoo!] because I work for a small business ISP I'm well aware of the problems.

      We can't match BT's Openworld service on price for home connections because only we'd break even before we've actually included any of our costs. It is cheaper for us to send customers who we want to have ADSL to Openworld - BT's reseller than it is to sell them the service ourselves.

      The business connections make a profit [512k - 2Mbit with ethernet] but the home connection is pure loss. That's why we don't sell it, we only buy those connections for staff members.

      Oh, we also get the same allocation of DSL lines as Freeserve. That's comedy since we only have 40 customers.

    • U.K. British Telecom has been told by our telecomms regulator (OFTEL) to open up the local loop to competitors, but it's dragging it's heels

      Well, I guess you are now getting the rewards of having set up the monopoly socialist BT in the first place! As the US is for setting up the monopoly Bell System!
      • Well, having a single nationalised utility setting up the system can be a good thing - no conflicting standards and roll-out to everyone (not just people in cities, large businesses, etc.). The real problem with BT is that it was privatised. Then it was no longer directly answerable to the public - shareholders and profit came first. And since it was the only telco on the scene at that point it had a monopoly, so it didn't matter what it did - everyone had to use them.

        Nowadays, everything beyond the local loop has been opened up to competition, and I'm enjoying much cheaper phone bills thanks to NTL/Cable&Wireless, while BT is acting worse than ever (over priced, poor quality service [it took them a week to un-block calls thru Cable & Wireless from my phone line after they blocked it without any warning]) - acting with all the worst points of it's old days, none of the better points, and simply grasping desperately at any immediate profit.

        And last I heard they were in about £30 billion debt. They don't seem to know how to compete, as though the management can't get out of the monopoly mind-set. And, IMHO, that's why BT sucks.

  • Wishful thinking (Score:4, Insightful)

    by baptiste (256004) <mike@baptis t e . us> on Wednesday August 15, 2001 @09:27AM (#2157673) Homepage Journal
    The bottom line is, most DSL and cable providers are monopolies. The telcos want total control over the DSL market just like they have control over the telephone market. Makes them more money.

    But, in the end, I don't see any other way - regulation won't work. The unionized telco workers with mgmt blessing delay DSL orders for CLECs into oblivion - hell, even if you get DSL FORM the telco it can take weeks and tons of hassles - it shouldn't be this complex. No regulation will change this. Unfortunately, we are unlikely to ever see serious DSL competition - same thing applies to cable modems. The only reason cable modems blew ahead of DSL is the cable companies planned their deployment and save for network bottlenecks which got worked out, they've executed. The telcos are still driving blind.

    As much as I hate monopolies (*cough*Micro$oft*cough*), in this case I doubt there are other feasible options. Competing techs (Satellite, wireless, etc) are to immature and cost too much.

    Thie ONLY saving grace is cross technology competition. The only thing keeping cable modem prices down is DSL - If DLS disappears, all you cable modem user can rest assured your rates will go up FASTER than your normal cable bill - count on it. But with DSL out there, its a threat.

    DSL is to cable modems what satellite is to cable TV - it provides enough competition to keep the cable prices somewhat lower. Without Satellite TV competition, cable prices would be much higher because they are still a monopoly. Its amazing to think that combined, Echostar and DirectTV would be on par with AT&T in terms of the # of customers for 'cable' service. Like #2 nationwide.

    So he's right, regulation probably won't work, but if we do give the telcos free reign over DSL, they better not screw it up or we'll all be stuck with RoadRUnner paying whatever AOL wants to charge!

    Personally, I love my DSL connection - offered by a Mom & Pop phone company. Prompt service, installs happen quicklyt, upgrades are a phone call away - love it. :)

    • The unionized telco workers with mgmt blessing delay DSL orders for CLECs into oblivion - hell, even if you get DSL FORM the telco it can take weeks and tons of hassles - it shouldn't be this complex.

      In my experience, the workers weren't delaying the process. The phone company just didn't hire and train enough of them in areas where they weren't offering DSL yet, but competing CLECs were. Getting telephone service working for people is much more important than installing DSL, so those calls got put off over and over again. Howevr, they are hiring and training more technicians, in areas where they are beginning to provide DSL.

      Thie ONLY saving grace is cross technology competition. The only thing keeping cable modem prices down is DSL - If DLS disappears, all you cable modem user can rest assured your rates will go up FASTER than your normal cable bill - count on it. But with DSL out there, its a threat.

      I'm sure there's some truth to this, but there's a lot of places you just can't get DSL. It's limited by line quality and the distance to the CO. So there really isn't any competition to cable modems in a large percentage of their market. The price is most likely limited to what they think customers are willing to pay, not the price of the competition. Cable modems just became available in my area, and I'm signing up for the most basic cable (mainly broadcast stations) and internet access. The total monthly price is about the same as what I'm currently paying for my 144k IDSL line, which is my only other choice. The cable company also lets me self install the software, and are even selling me good quality cable TV cable at $0.10 a foot, so I can run outlets where I need them. Did I mention that they have an on time gaurentee for their service calls. They miss a serivce call, they give you a credit on your bill. I think the amount was about $20. I'd rather they pay me cash if they make me wait around and don't show up, but it's still incredibly better than dealing with the phone company.

    • It works both ways.

      The local paper ran an article showing that BellSouth changed their charge for a dsl line to ISPs to $33.00. This was done so as to "standardize our rate plan" or some other hogwash.

      This means that my $49.00 a month DSL is most likely never to go down, as my ISP makes $16.00 over the cost of leasing the DSL line from BellSouth. If anything I fully expect my DSL to cost nearly $60 a month within 2 years.

      Until their is a 2-way BB solution that does not require telco cooperation we are going to get jacked.

      As far as cable goes, hey, more power to them, while they are available in my local area I can only hope it keeps BellSouth and my ISP from upping my rates.

      • If anything I fully expect my DSL to cost nearly $60 a month within 2 years.

        So what?

        Is it really that horrible a thought that we might all have to pay 1/16th of the cost of a T1 for T1 speeds?

        Everybody wants legislators to impose restrictions on the behavior of other people that they wouldn't tolerate if imposed on themselves.

        If it cost you $2 in materials and time to bake a pie, and you held a pie sale, would you tolerate the government requiring you to charge no more than $2.25 for the pie?

        It's not like broadband is a right or a necessity; it's a luxury, and one that's expensive to provide. But we're all demanding better service and lower prices. High speed, good service, low price; pick at most two, folks, you can't have all three.
        • uh, I think T1 speeds are a bit faster than 256 Kbit, which is usually the standard guaranteed transfer speed of DSL. In my area, 256Kb is ~$40, 768Kb is ~$80.

          If a T1 gets all of 768Kb/s transfer speeds, then yes, DSL is great. The comment above has a valid complaint about paying $60 a month though, especially if he's paying $40-45 for the same thing today. Inflation is one thing, but a 20% increase (which is what we're speculating) over 2 years is a huge jump when you consider there will not (presumably) be any difference in service speed/reliability over what we get now.

        • Is it really that horrible a thought that we might all have to pay 1/16th of the cost of a T1 for T1 speeds?

          That is assuming that the cost of a T1 (> $1000/month) is fair market value - remember, T1s are regulated and tarriffed meaning they generally are more expensive and competitors can't easily provide them. So in this case its apples to oranges.

          The idea here is not to regulate cheap prices. Its to avoid being gouged by a monopoly - the whole basis for anti-trust laws. If one company has complete or almost complete control over a market, the price of their product or service is not likely set by market forces/competition.

          And of course monoploies rarely behave themselves. The most obvious example, tools the telco sgave the CLEC to pre qualify people for service (ie are you close enough, is yoru CO wired, etc, etc) Often, the CLEC got rejections from this sytsem only to have the telco send a DSL postcard to the users a week later offering them the telco DSL. Talk about shady!

          • That is assuming that the cost of a T1 (> $1000/month) is fair market value - remember, T1s are regulated and tarriffed meaning they generally are more expensive and competitors can't easily provide them. So in this case its apples to oranges.

            No, it's not; because those oranges are the costs that provider has to pay to get YOU your bandwidth out to the Internet.

            Remember, he doesn't just have to pay to provision you; he has to pay to have enough capacity out to the Internet so that you won't get 1,000ms pings and 1KB/s transfer rates, or you'll go somewhere else.

            And he's not paying DSL rates for that bandwidth to the rest of the 'net; he's paying tarriffed telco DSx rates.
        • Is it really that horrible a thought that we might all have to pay 1/16th of the cost of a T1 for T1 speeds?

          It is when there is no justified reason for doing so other than to prevent T1 sales from being destroyed by a cheaper alternative. DSL prices don't have to be so high, they're only high because the telephones are a local monopoly and don't want the more profitable T1 sales to be hurt.
          • You're forgetting that you're using bandwidth not just over your DSL connection, but over the far more expensive connection out to the rest of the Internet.

            DSL prices are too low to make a profit. They're loss-leaders right now, and the only people who can afford to charge $40 or $50 a month for it are those who can absorb the losses for now in the hopes of building a brand identity that they can sustain later when they charge a profitable price.

            But, in any event, since when is "because I want to charge this much for my product" not a "justified" reason for pricing? It's their circuit, their hardware, their bandwidth; what right do you have to it? None.

            If I have a used car with a blue book value of $2,000, and you want to purchase it, and I refuse to sell it for less than $3,000, have I done something wrong? No; it's my damn property, and you're free to not buy it.

            You're free to not buy DSL. If it's too expensive, don't buy it. Nobody's putting a gun to your head.
            • by Rupert (28001) on Wednesday August 15, 2001 @11:13AM (#2157560) Homepage Journal
              If I have a used car with a blue book value of $2,000, and you want to purchase it, and I refuse to sell it for less than $3,000, have I done something wrong? No; it's my damn property, and you're free to not buy it.

              However, if you're a car dealer, and your cars are 50% more expensive than the cars from the dealer across the street, you will soon find yourself out of business. The situation the telcos are in now is that they have legislation saying every car dealer in town has to buy cars from them, at whatever prices they set.

              It's a trade off, like everything else. No-one wants their street dug up every week by dozens of different phone, gas, electricity or cable companies, so we give one company a limited monopoly as a "reward" for putting in one set of infrastructure. Yes it's their copper. Yes, they paid to put it in. No, they can't charge whatever they want to use it, because that wasn't part of the deal.
  • Right now, it costs an arm and a leg for the broadband ISPs to get that last mile in. I say, let em finish eating the cost and *then* deregulate. This helps prevent more Covads from going under.

    When I ordered AT&T cable internet, they sent a tech to my house for the *entire* day since I did not have cable to the house at all in the first place. I'm sure that AT&T still has not recovered the cost of this with their $40/month service. I'm not sure that things are much better for DSL. The Ameritechs out there can eat the cost for now as they have other bread and butter to play with.
  • Verizon (Score:4, Informative)

    by mr100percent (57156) on Wednesday August 15, 2001 @09:22AM (#2157733) Homepage Journal
    "Broadband's share of the Internet market in Canada is twice as high as in America."

    Obviously you can't compare to Canada, because they don't have the evil Verizon killing off the competition.

    Verizon's favorite four-letter word []

    • Canada (Score:3, Interesting)

      by freeweed (309734)
      Actually, typically what you see in Canada is a multi-monopoly system, legacy of the days when damn-near everything was a Crown Corporation (government owned and run). The phone system just privitized in the last few years here, for example. Net result? No one bothers competing (and in many cases legally still CAN'T), and you have no options.

      Long distance rates took years longer to drop than they should have, local service is getting progressively more expensive, and cable (as in TV) just generally stinks. Broadband connections however... you'd have to pay me about 4x what I'm making here to move to the US.

      While this goes against everything I believe in, I'll still say it again and again and again: sometimes, LESS choice can mean BETTER service. Of course, this assumes that your #1 priority is your bandwidth. Like me :)

      • Re:Canada (Score:3, Insightful)

        by topham (32406)
        difference is, while Canadian companies want to make money, they don't quite seem to have the same level of GREED american companies have. The Canadian companies like to atleast offer a service when they empty your wallet. While the american companies suggest you be thankfull while they empty it.

        By the way, there is no money is residential phone service. Hence, no competition, but there is some competition for business phone service (local and long distance).

      • Re:Canada (Score:3, Insightful)

        by isdnip (49656)
        Well, no, your history is wrong. Perhaps you're so young that you're confusing Canada with Cuba?

        Canadian telephone service wasn't a Crown Corporation (like, say, British Telecom's forebears). Bell Canada was once affiliated with AT&T, though spun off some decades ago. Several western provinces owned their own telcos. And some mom'n'pop independents still exist in parts of ON and QC.

        Broadband's easier in Canada in part because there's less sprawl. It's a big country but there's a clear city/country break. ADSL doesn't work more than around 15,000 wire feet from the DSLAM (in the CO). Canada's population is largely clustered in cities and towns; large-lot-zoned suburbs (which create long loops) don't rule as they do in much of the USA. So average loop lengths are under control, and you can reach half of the country's population within reasonable range of a hundred COs or so.

        Monopolies don't help. Unregulated monopolies really don't help!
    • Re:Verizon (Score:3, Informative)

      by Hee Hee Hee (310695)
      In the "Verizon" four letter word link [] you cited:

      Take all of the wires in the street, and all of the telco switch facilities and give them back to the people. Make the whole infrastructure of monopoly regulated telcos belong to the people who have paid for them. They are too valuable a resource to allow to remain in the hands of a few unscrupulous companies any longer. These companies were paid a GUARANTEED profit for decades. They actually made more money because they over-built their systems. Since we already paid for it, it is righfully ours.

      A cool idea! I'm all for keeping government out of our lives, but, there are times when it's necessary. We own most of the roads, most of the water and sewage distribution and treatment facilities in the U.S., why not information distribution? Look at the Interstate highway System []. That was a long-term project designed to enhance our infrastructure. This sounds pretty close, if not identical, to the digital information distribution troubles we're having now. A far-sighted approach to wider bandwidth distribution to the masses might be something that the government needs to get in on.

  • by angst7 (62954) on Wednesday August 15, 2001 @09:22AM (#2157742) Homepage
    Regulation, deragulation, whatever... All I know is my DSL was unreliable, and my cable service while faster, is bogged down with Code Red infected Windows boxes.

    I think I'm going to start the first Aldus Lamp internet. Perhaps with a redundant semiphore backbone.

    Yeah... I'll be rich :)
  • by Enry (630) <enry@w[ ] ['ayg' in gap]> on Wednesday August 15, 2001 @09:22AM (#2157757) Journal
    As Cringley said a few months ago, the bells got the advantage of offering long distance in their region if they opened up their lines for broadband. Given the drop in long distance prices, the bells have no incentive to open their lines to competition.

    Having a fully open market would be a nice idea, but that's just it - an idea. The Bells have no incentive to open their lines, thus all the DSL companies fall flat on their face (with a bit of help from the Bells) and the Bells can then offer their DSL service. The Bells own the wires, the Bells ran the wires, the Bells can do whatever they want with them. If you want anything different, you either have to buy service from the Bells, which is happening now and obviously failing, or regulate the Bells and force them to open their lines.

    I'm within 3 miles of one oh the high-tech centers of the universe - rt 128 in boston. I am about 3 miles (officially, 18k feet) from the CO, thus DSL will not be available. Verizon probably won't be building a new CO to get me DSL service. I'm stuck with the "name of the month" cable service that used to be MediaOne, then AT&T, now AT&T Broadband, soon to be ??. Remind me how deregulation will change my situation...
  • I personally believe (Score:3, Interesting)

    by linuxpng (314861) on Wednesday August 15, 2001 @09:21AM (#2157782)
    that the government should get more involved with the cable industry. Where I live you can only get cable access for $60 with out another cable subscription. I think the market needs a little competition to drive that price down. That's where the government actually forces time warner to open it's cable networks to other ISPs. DSL is non-existent here for whatever reason, so AOL/Timewarner has a monopoly on this market. Personally, I think it stinks.
    • Right now DSL providers are havig serious problems with the phone companies. The phone compaines have been told by law that they have to open up their networks. This has discouraged the phone companies from spending the money to upgrade their networks. They also haven't been hired and trained enough people to install all the lines that are required for DSL in many areas. The result is that DSL providers like Covad can't get the resources they need to get customers set up on DSL. My experience was that it took 5 months of the phone company making excuses and telling me outright lies to get my line installed. Covad was our a few days later to set things up, and in the last 8 months I've experienced about 1 hour where I couldn't use my connection when I tried. Another friend of mine was told by Covad that they couldn't give him DSL because there was too much line tap on the line (about 1000 ft of unused wire that was left to make it easier to hook up future customers. COvad couldn't remove the line tap themselves, and Ameritech wanted a prohibitive amount to do it. Not to mention that in other cases they considered it a non-esential service, so it would likely take many months for them to get around to it. The solution to his problem? Ameritech started offering DSL in his area. They were happy to remove the line tap as part of the install, no extra charge.
      Government stepping in and opening up these companies networks doesn't seem to work. Regulations can be bent. Loopholes can be found. The competition will never be on equal footing with the owners of the network. The penalties the govenment regulators apply are never enough of a deterrant to discourage uncompetitive or simply incompetent behavior. The utilities are in no real danger of losing their monopoly, and the people making the decisions will never go to jail. As an example. Ameritech in Ohio has done a miserable job of fixing problems with their phone system in recent years. There's a huge backlog of service calls. Their technicians regularly miss severall appointments in a row while the customers sit at home waiting for someone to show up to fix their phone. Even if you give them a cell phone number to call, they won't let you know that they are running behind and won't make it. The government has found several times that they are not providing an acceptable level of service, and that they aren't even showing significan improvement. The result was a couple settlements in which I received on two occasions a phone card with a small number of minuites on it. Of course the phone card can only be used for Ameritech services like Ameritech pay phones.

      The government steping into a regulated market and "fixing" it with a bunch of new regulations rarely works. The California energy market "deregulation" is a prime example of this. Just because some politician lables it deregulations, doesn't mean that there's going to be less government regulations involved. It's just a buzzword they often like to use when they decide to regulate the market in a new way. Remember, truth in advertising laws don't apply to politicians.
  • by Masem (1171) on Wednesday August 15, 2001 @10:17AM (#2162556)
    Since most of the problems come from the fact that that baby bells own the last mile and get their advantages from this, the solution is rather obvious:

    Make it such that the companies that own the COs and the last mile, and parents/subsideraries thereof, cannot offer the consumer any services and are only there to lease the use of their lines to phone, data, or other potental companies. I'd further extend it to cable lines where that is appropriate.

    This would require the bells to split off a company to manage those last miles, and they would never be able to merge it back in the future. But this would also prevent a company like Covad (if they had the cash) to buy the last mile out and reverse the tables in order to screw the telcos. Including the cable lines and any future 'electronic transfer lines' that may come about in the future would also possibly open the door for more competition in the cable industry.

    Of course, this isn't an overnight thing, and there must be some initial regulation as such that the cost of the 'extra' company beyond the telcos does not impact the fees that consumers already pay. I'm sure the baby bells would whine as well, since that last mile is their current money maker. But this would force a level playing field in that anyone wanting to offer consumer services would not have to worry about ownership of the last mile.

    • by jweage (472545)

      So instead of a monopoly we have a ... monopoly?

      The issue is company owership of the last mile. If it can only be owned by a single company, it is a monopoly.

      Unless the infrastructure is rebuilt to allow the ownership of the last mile to change hands, at the request of the end user, we're screwed. The alternative is something similar to the natural gas market, except with a physical wire, it is a little more difficult.

      • Any company who offers both connectivity and other services has an inherent conflict of interest. Moving ownership of the last mile to a separate company which only supplies connectivity removes this conflict of interest.
    • This is a great idea, and would work in an ideological world. But then again, if this was an ideological world, we wouldn't need solutions like this.

      What am I talking about? Have you ever heard of an "old boy's network"? What would stop the "split off company" from giving preferential treatment to one customer?

      "Oh. Sorry, we have no record of that request. Please submit it again, and we'll get right on it. You say that you have submitted this request three times this month? Huh. We've changed our data entry format. Didn't you get the memo?"*

      Somedays I just feel jaded.

      *This is a fictitious conversation based on real experiences with working for a CLEC.

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