Posted on 02/27/2002 6:27:54 AM PST by jayef
The Latest: 2/19/02 The 'Incredible' Bells,TechCentral Station,
"You can't come to Congress, take the oath to tell the truth, and then not tell the truth," House Commerce Committee Chairman Billy Tauzin said in response to Enron's former CEO Jeffrey Skilling's testimony that he was ignorant of many of the deals that lead to Enron's bankruptcy.
So, why are so many members in the House and key members of the Federal Communications Commission ready to buy the incredible tales they are being told by the four regional Bell operating companies?
Tauzin-Dingell Goes to the Floor for a Vote, 2/27/02
Summary: In 2001, a bill was introduced by Representatives Tauzin-& Dingell that is designed to give the four Bell monopolies---BellSouth, Verizon (Bell Atlantic, GTE, NYNEX), SBC (Ameritech, Pac Bell) and Qwest, more of your money --- in the name of broadband. We beleive this bill is "evil" because it is nothing more than a campaign-financed, corporate welfare bill to give subsides to companies who don't need or deserve it. Want proof? Read the contents of this site --- and get mad.
Don't you mean, help preserve an impossible regulatory environment! The regulatory environment that the Bell's are forced to exist in is one that requires them to sell unavailable space in their facilities to their competitors for sub market prices. And then when they can't provide the space, they are fined extreme amounts. All do to an inhospitable regulatory environment.
I don't know if this bill will fix the problems, but it can't make it worse.
Semper Fi!
Further, the argument that the Bells have any incentive to provide the services he thinks they will without any competition are spurious. PLEASE GO TO THE WEBSITE IN MY ORIGINAL POST.
The Bells have already wasted billions of incentives that were given by the government to deploy broadband. They only recently got off their a$$ after what . . . yes, you guessed it, competitors started offering DSL.
Unfortunately, the giveaways that you claim Bell is being forced to give to their competition (especially in DSL) drove those companies right out of business (see Covad and Rhythms).
Please visit the website. Please consider more sources than George Gilder. There are many voices out there on this issue, and never have I characterized it as just Bell versus just the competition. This is a serious issue that interests us all.
I would normally agree with those sentiments, but the Bells built that network on the backs of ratepayers for the 100 year span of their monopoly. That network has been paid for many times over. Not only that, but the government protected this monopoly and provided incentives.
The disincentive to invest in the infrastructure that Gilder and others allude to are simply not there. The networks that Bell is building expand their reach, concentrate access remotely and generally reduce the cost of the network. Not only that, these new networks make it harder for the competition to provide DSL.
This is what the whole TELRIC argument is about. Competitors want to pay a price based on the costs of what the network should and will look like as the Bells deploy new technology. This is why they claim they are giving it away.
BTW, in matters of telecommunications technology, it doesn't get a whole lot more serious than George Gilder.
Bottom line, the current regulatory regime sets prices in such a way that they do not take account of the true cost of network upgrades. Upgrades lower access prices in the long-term, but someone has to pay for their installation in the short term. Unrealistically low rates set by regulators have two perverse effects on the market. First, they disincentivize some companies from making the investment to upgrade the networks. Secondly, they bankrupt those companies that do pay for upgrades.
Tauzin-Dingell ain't perfect, but it is better than the current mess.
Just trying to smoke out the agenda.
I don't care what arguments you have for its passage, I'm again' it for purely selfish reasons. I have admitted such.
Not only that, I have offered up to you the fact that the libertarian in me completely understands your argument. But THIS INDUSTRY, cannot be deregulated in the manner that Tauzin-Dingell proposes. Destroying competition will return the Bells to their pre 1984 state.
If that happens, then congress will have to get MORE involved in regulating the monopoly they helped reconstitute. This will mean MORE regulation not less. MORE govenment determination of winners and losers.
Take it from an insider. This bill is bad, schlecht, phoooey.
Liberating the Internet
Picking telecom sides.
By Stephen Moore, president of the Club for Growth February 27, 2002 8:45 a.m.
The big vote on telecom deregulation in the U.S. House ("Tauzin-Dingell") happens today or tomorrow.
In this heavyweight prizefight among huge corporate interests, there are no angels on either side. It's easy to hate your local phone-company monopoly every time you get your phone bill. And AT&T has a dreadful record of supporting free-market deregulatory policies in telecom and in economic policy generally. (AT&T has consistently had the most left-wing corporate foundation giving of any major Fortune 500 company.) This is like the Iran-Iraq war. It's hard to root for either side.
But this is a hugely important economic issue — and has enormous potential gains for the U.S. economy if we can just get broadband policy right. No industry needs more intelligent help than the embattled telecommunications sector, where profits and investment spending have vaporized.
So who is right in this fight, AT&T or the baby bells?
The bells are and here's why. If approved, the Tauzin-Dingell bill has the potential over the next decade to bring high-speed web service to nearly every U.S. home.
Broadband service is the lightning-quick Internet technology that will bring to Americans the next generation of web services. This technology could possibly transform the web from a device for exchanging e-mail and checking stocks into a tool that will link all businesses in an e-commerce web, allow users to quickly download video or music on demand, and give rise to products and applications we only dream of today.
Economist Robert Crandall of the Brookings Institution, and a top deregulation scholar, calculates that if we can accelerate broadband deployment, the value to the U.S. economy could reach $500 billion a year.
That's more than the entire economies of most nations.
Very few actions that Congress could take — short of scrapping the income tax for a consumption tax or privatizing Social Security — could deliver those sized benefits to workers and consumers.
Today, eight of ten homes and businesses still use clunky dial-up technology to access the web. Broadband technology is more than a decade old and still it's a rarity in most areas. This makes no sense: It's as if we're still playing phonographs or using rotary phones. A hallmark of the U.S. era of high-tech innovation has been to spread the technological breakthroughs to the great middle class in short order. But after a decade, few Americans are hooked up to broadband service.
Why the still-lingering digital divide between the information haves and have-nots? Because outdated government regulation is stifling the private-sector investment needed to build the network.
Technology analyst George Gilder argues that today's regulation "privatizes the risk and socializes the benefit." Here's how it works: When a phone company risks its own money to wire homes and businesses to broadband, the federal government forces it to open its network to competitors at money-losing, government-set rates. This prevents the original investors from capturing the full value of its risk-taking expenditures.
A predictable result was the collapse in telecom investment over the past 18 months. In 2001, telecom investment contracted by $75 billion, a 15% decline, according to NR's own Larry Kudlow. That's one of the biggest reasons why the telecom industry shed over 317,000 jobs last year — the largest job loss for any industry ever recorded in a single year.
By some estimates, it will cost telecom companies some $200 billion of added broadband investment to lay down the cables to bring this technology into most homes and businesses. How can this investment be accelerated? One answer is for Congress to allow businesses to write off their mega-investments the year they're made. But it must also create a fair-minded regulatory structure that allows those firms that make the investments to reap financial rewards. This means eliminating free-riding competitor access without fair payment.
What's the alternative to Tauzin-Dingell? Sen. Daschle wants tax credits, business subsidies, and a concoction of other corporate welfare giveaways. That's a recipe for destroying the industry, not for reviving it.
The Left talks a lot about closing the digital divide between the information haves and have-nots. This week Congress has an opportunity to do just that.
Boy that really clears things up. We don't really know what this is about, so we'll cast it as a battle between AT&T and the Bells. Nevermind all of the other competitors who are going to be irreparably harmed.
This legislation is NOT ABOUT DELIVERING BROADBAND. The Bells could deliver broadband 10 years ago AND DIDN'T. I will reiterate. The Bells did not offer Broadband Access until after 1996. After competition. I know you guys can remember back that far. THIS IS FACT. THIS IS NOT COINCIDENTAL.
Again, I reiterate, this is NOT ABOUT BROADBAND. This is about destroying competition and denying access to elements. The Bells have already WASTED BILLIONS of taxpayer dollars with broken promises to deliver broadband. They promised fiber to the curb and that they would bring internet to rural areas. In fact, THEY ARE SELLING OFF RURAL EXCHANGES to local co-ops and independent operators. Which makes their accusations of CLEC cherrypicking even more amusing.
Since this bill does not propose to de-socialize the network by repealing all franchise monopoly arrangements, I fail to see the relevance of this statement.
What else would you call a company that uses other company's buildings, cable and switching services to resale as a competitor?
Which competitors do you have in mind? Covad - now partially owned by SBC (and almost out of business to boot)? Northpoint - assets acquired by AT&T? Take a look at campaign contibutions; Tauzin is heavily supported by the RBOCs. Hollings has fed at the IXC trough for years (going back to before the '96 Telecoms Act). And "Clean" John McCain has taken bribes (whoops, make that contributions) from companies involved in telecoms matters for a long time as well. A lot of these competitors had no business entering the market - they were basicly Ponzi schemes trying to pump up their stock value.
But you want to think it's all about "protecting competition," or some such nonsense. Oh well, at least you didn't say, "It's for the children."
I'm not shilling for the Bells; if you read my intro to the post, I say "a plague on both their houses." Yes, the RBOCs are doing everything they can to destroy their competitors, but the Hollings bill would probably cause more harm than good. A large dose of cynicism is in order when dealing with telecom issues. Complete deregulation (substitution of antitrust law) is probably the best answer.
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