Posted on 08/21/2002 6:30:12 AM PDT by mondonico
Edited on 04/22/2004 11:46:56 PM PDT by Jim Robinson. [history]
The telecom shakeout (or meltdown) continues, with Qwest ditching assets to stay solvent, and VoiceStream pursuing a merger in wireless with Cingular. The market will sort all of this out, though it sure would help if the Federal Communications Commission stopped making things worse.
(Excerpt) Read more at online.wsj.com ...
fcc action is theft. plain and simple.
There will not be a telecom revival as long as Michael Powell is in charge - it will be more like the Great Depression.
VoiceStream (under their parent company, DT) is just desperately hoping that SOMEBODY will bail them out and take on their billions of dollars in debt. VoiceStream was my employer here until April of this year; That is when they laid off everyone in several call centers and sent all these jobs to their call centers in Jacksonville and Dallas (where the "customer service" reps are "new to the U.S.," incoherent and very difficult to understand).
We were employed by Powertel, a Southeastern regional company, until VoiceStream bought them out approximately in September of last year. And VoiceStream's service, stock and overall value has done nothing but snowball downhill ever since. They have become notorious for sticking customers with mystery charges, including myself.
I kept my phone for a few months ( a few too many) after my employment was terminated, and was just able to get it disconnected last week. It took me two weeks to do so, because they "were waiting on my payment to post." A guy I know in the Jacksonville call center told me that the company is now so desperate financially that no customer can cancel their service if they have as little as five cents due outstanding on their bill.
As far as I know, from people I know personally with other mobile companies, every one of them will charge you an ungodly amount of money to cancel your service. They call it "breaking your contract." If you don't read carefully everything you sign with your mobile phone company, there will be something written about how you must keep the phone "x number" of months or years to avoid a cancellation charge. VoiceStream recently upped their requirement from one year to two years.
Powell has been an FCC Commissioner since November 3, 1997. He was appointed Chairman in January 2001.
The reason for the crash in the industry is simply that there are not enough paying customers that are interested in newer technology. That applies from the end users to the manufacturers, to the service providers.
No, there are tens of millions of American ratepayers who are ready to pay for the services but can't get them. The reason for the severity of the crash is that the Bell monopolies are obstructing the broadband "last mile" that would have utilized the backbone networks constructed over the last few years. The Bells want legislation to outlaw broadband telecom competition before they flip the switch to turn up the service. It's simple extortion.
It was a market bubble that just burst.
The market has swung from irrational exhuberance to irrational pessimism. When the Bells activate the last mile, that will solve many of the problems - including the content side of the supply/demand equation.
Regulation, deregulation, politics, FCC, the President -- blame anyone you want, but the fact is that no one is really interested in new stuff except geeks.
I know plenty of people who are not geeks who want advanced services. They are starting to understand what a miserable failure Michael Powell's tenure at the FCC has been.
Michael Powell needs to be sent away - appointed Ambassador to Uruguay or some other place where he can do no more harm. Thankfully, he's not in charge of the War on Terrorism or we'd have Mullah Omar in charge of the Islamic Emirate of America now.
not trying to defend them for their business practices by any means (i work for one of the wireless companies) but here is their basic though process for that...
it's a formula that takes into account promotional costs, advertising, "free" items to new customer, and commisions for the salesman. i believe this is referred to as ARPU (average return per unit). that contract is the length of time that it takes for ARPU to come to the positive side of the ledger (and make some profit).
the company i work for says (last i heard) it costs us about 400$ to sign up a new customer, and at 25$ per month base plan (the normal plan most sign up for) it takes us 16 months to recoup that investment. i belive that figure has lowered, but not sure.
The reason the "Bell monopolies" are not investing in broadband in the last mile is that the FCC's rules (a product of Al Gore's roommate, Reed Hundt, not Powell) require them to lease such facilities to their competitors at or below incremental cost. Why should they subsidize their competitors?
In my opinion, the incumbent utility should charge the competitors and their own retail units at the same wholesale rate - and provide the same level of service.
For example, Southwestern Bell should charge SBC/Yahoo Internet and Earthlink at the same rate for colocation and line access fees.
You're almost right. The RBOCs aren't going to invest the billions necessary for universal DSL if they have to provide acess to the network to their competitors at pennies on the dollar. Tarriffed rates established by the 50 PUCs bare scant resemblance to actual costs.
Besides, nothing is preventing AT&T, MCI, Sprint or Dave's Telephone Co. and Shoe Repair from colocating DSLAMs in COs to establish their own broadband network.
The FCC needs to get out of the way.
For example, Southwestern Bell should charge SBC/Yahoo Internet and Earthlink at the same rate for colocation and line access fees.
That's already the law, and that's what these companies are doing--if they don't, they aren't allowed to provide long distance service.
The prices they are forced to charge for wholesale services are not compensatory, however--the FCC and state commissions has forced the RBOCs to pay all indirect costs and overhead; the competitors pay only for incremental cost--this amounts to a subsidy.
My point is, if SBC has to share infrastructure with its competitors, as you desire and as the law requires today, what incentive does SBC have to deploy that infrastructure? If McDonalds had to give Burger King equal counter space at its restaurants, why would it ever open another one? Where's the economic incentive?
Besides, nothing is preventing AT&T, MCI, Sprint or Dave's Telephone Co. and Shoe Repair from colocating DSLAMs in COs to establish their own broadband network.
The FCC needs to get out of the way.
Absolutely right.
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