Replies

So, while I tend to agree with the Congressman, I’m troubled by terms such as “affordable local access, public safety needs, and uphold of law enforcement”.

As well you should be. Those are weasel words for "let's give the ILECs a priviledged place."

Make the ILECs sell off their networks and make everyone a CLEC, and encourage overbuilding. THEN take of the regulations.

So, while I tend to agree with the Congressman, I’m troubled by terms such as “affordable local access, public safety needs, and uphold of law enforcement”.

As well you should be. Those are weasel words for "let's give the ILECs a priviledged place."

Make the ILECs sell off their networks and make everyone a CLEC, and encourage overbuilding. THEN take of the regulations.

I don't think so. The ILECs are forced to subsidize "affordable public access, public safety needs, and ... law enforcement measures." Thus, under the old model, long distance subsidized local, urban subsidized rural, business subsidized residential. The competitors (CLECs) have no such obligations so they can underprice the ILECs every time. For example, let's say the ILEC charges a business customer $10 each month for unlimited local access. Let's assume that the cost of that service to the ILEC is $7, that $2 of the charge is used to subsidize basic residential local service in the state and other things the regulators deem worthy of subsidy, and that the remaining $1 is the ILEC's profit margin. CLECs today get to lease ILEC equipment at "cost" (actually, it's way below cost because the FCC requires the "costs" to be calculated based upon a hypothetical network that instantly incorporates all the latest technology). So the CLEC's actual cost of providing the service to the same business customer is below $7. Additionally, the CLEC has no obligation to subsidize or even to serve poor or rural residential customers--they can, and do, "redline" such nonprofitable customers. What this means is that the CLEC can price the service at $9 and still make more than $2 profit. If the ILEC meets that price, there is NO profit. How is that protecting the ILEC?

It makes me laugh to hear CLECs (I assume you work for one or invest in one) whine about ILECs' privileged position. Such assertions ignore not only the heavy cost of the socialist subsidies ILECs must bear--they also ignore CLECs' absolute refusal to assume ANY such obligations, making their complaints not only inaccurate but hypocritical.

A few more points. "Make the ILECs sell off their networks" for the benefit of CLECs represents a complete disregard for the rule of law and property rights, much like the recent Supreme Court decision upholding the condemnation of houses for private developers.

"Encourage overbuilding" means encourage the building of new networks. The reason why this is a problem is the FCC's original decision, in implemention the 1996 Act, to give CLECs the right to lease the entire ILEC network at rates no greater than the incremental cost of a make-believe state-of the-art network. This meant that it was ALWAYS cheaper for a CLEC to lease the existing network and just change the name on the bill rather than build a competing network. (Talk about corporate welfare.) This created the illusion of competition but the reality of a bunch of parasitic resellers all using the same wires. (Thank you FCC Chairman and Al Gore buddy Reed Hundt.) If you want competing networks, you have to wean the CLECs off the crack cocaine of below-cost leasing of the ILEC networks.

"THEN take off the regulations"--this reveals the CLEC strategy--keep the ILECs regulated, but not the CLECs, for the foreseeable future.

If a CLEC wants to be taken seriously in this debate, it should advocate regulatory parity, not demand that the ILEC be tied down with government regulations, obligated to subsize the CLEC, and subject to seizure of its property.

Make the ILECs sell off their networks and make everyone a CLEC, and encourage overbuilding. THEN take of the regulations.

Extremely well said. The ILEC's are parasites on our society. And because they cannot compete on tier own merits they spend huge amounts of money on lobbying and legal teams to thwart competition with a primary goal to return the US to a "one provider with rate of return" telecom landscape.

In Las Vegas we are cursed with Sprint's local telephony services. They are by far, the worst of the bunch.

Case in point. There is no DSL for the majority of the city. No DSL! Even my friend in Baja California has DSL!