Posted on 05/23/2002 10:00:23 AM PDT by Alan Chapman
U.S. senators are probing what, if anything, can be done to increase the availability and cut the price of broadband service. At the heart of the matter is the question of whether to break up local phone companies in order to promote competition. One bill, proposed by Senate Commerce Committee chairman Ernest Hollings, D-S.C., would do just that, splitting each telco into retail and wholesale arms. Wholesale units would lease high-speed lines to competing Internet service providers. Pennsylvania state Sen. Mary Jo White complained to the commerce committee that a lack of competition has dissuaded Verizon Communications from selling fast, affordable Internet access to her constituents in rural western Pennsylvania. "I remain convinced that structural separation makes sense and is the only way to assure competitors nondiscriminatory access to customer's homes and businesses," she said.
But critics of regulation say customers would be left with more confusing and less reliable service if a breakup occurred. "It would wreak an absolutely massive amount of destruction on the telecommunications sector and the national economy," says Adam Thierer, director of telecom studies for the libertarian think tank the Cato Institute. "It would be gut-wrenching for consumers."
As it is current DSL can provide a downstream of 8 MB/s but it's capped around 1 to keep the network from getting clogged.
Fortunately, we are seeing the very first rollouts of voice and data services that will obsolete the need to use the telco's last mile (or any of their infrastructure for that matter), and delivering way better performance for the money. The telcos will either change the way they do business and write-off their old infrastructure or die a slow death. They cannot compete cost-wise with some of the smart and viable alternatives that are just now emerging, and they are way too slow and top-heavy to make the necesary changes to their networks in a cost effective manner. Good riddance I say.
I can understand why there can't be two Channel 4 TV stations in one market-but if you want some guy to run cable to your house, or to buy a satellite receiver to tune signals out of the air, what does that have to do with Congress?
Don't tell me it's the bribes from over-the air networks. That would be illegal.
I agree. I know we do need to change out the infrastructure and get more fiber optic lines as carriers. It's not terribly hard to do either. Bell doesn't want to because the installation of new plant is seen as a burden and treated as such in accounting. Add to the fact that the Feds try to bleed them whenever any equipment in installed via taxes. Bell spends millions alone on people and offices just to keep track of how much they owe in taxes to the federal gov't each year.
Reform does need to be made in the treatment of the Telco's but breaking it up will accomplish nothing.
The phone company should charge a rate that will allow it to make a profit - but it must be the same rate that it charges it's own retail unit. If the phone company is discounting the rate to it's own internet division, it must offer the same rate to the competitors.
The question is, will you compete, or will you continue to try to use government fiat to crush your competition? I deal with this every day.
It is in the best interest of the consumer to have choice. It is in the best interest of the consumer that regardless of who he chooses as a provider, that that provider competes on equal footing for the goods used in providing service. That is not happening today. Parity is a myth and the Bells are paying millions of dollars to the states and its competitors as a result.
Bell treats its customers like competitors and is suffering because of it. Optimally, Bell wholesale would compete with other wholesale providers to serve Bell retail and the CLECs. This would create the proper competitive pressures that would benefit the consumer.
Only in terms of customer service and pricing. I don't see how it would increase the availability of new plant or options.
The plan being proposed, from my view, doesn't solve much but introduces more problems.
BTW, do you work for a Telcomm? You seem to know the lingo.
You only explained how *theoretically* that long-range DSL speed could be such-and-such megabits transfer speed, but perhaps you should touch on the real-world performance and costing model that various Bells have adopted to service and bill the consumer.
Seems that the last I heard, the emerging 'LD-DSL' (Long-Distance DSL) that PacBell was offering was a pathetic 128kbps symmetric xfer rate (up/down) for $120/month.
Considering what you said earlier about the amount of bandwidth that can be given to a consumer normally out of the 20,000' range of a telco station -- don't you think that giving them 1/10th the speed at 5 times the normal price is a RIP OFF?
When you introduce competition, prices go down and availability goes up!
Back when there was a phone monopoly Bell could just pour money down the drain on some expenditures that were not guaranteed to ever be profitable because they could take the money from guaranteed sources of cash. That's why local service was cheap but long distance was expensive.
Back then you could not buy a phone for your house and you could rent any color as long as it was black. The phone company continuously "rang" your line to verify that you were paying for EACH phone.
In a normal business produce-consume model. But telco's are quite different.
I'll have to reread the articles I saw in OPT to verify.
I think that Bell would be forced to behave more as a supplier if it didn't have the support of its retail arm. I think that Bell would be forced into network wide upgrades to meet the needs of Bell retail and other customers. If everyone had the same access to the plant and it was provided as a commodity, there would be no incentive to provide disparate quality to any particular consumer. This is exaclty what the current regime encourages.
Remove that piece from the equation and introduce some wholesale competition and the consumer will benefit. The ILECs are upgrading plant now, not because of the demands of it's customers (both wholesale and retail), but because it is more efficient and ultimately cheaper for them to do so.
That pressure would be partly removed under the "Broadband Deregulation" proposals that regress from the 1996 Act. I have no doubt that the consumer would ultimately suffer. All the ILEC has offered the consumer in return is long distance. Long distance!
I agree parity is a joke but I don't see how it's discouraged by Bell. Every month or so we go over procedures for treating the CLECs and I've seen guys pulled off of normal troubles and put on CLEC troubles in order to increase parity.
However I still don't see how more federal regulations will help. I don't see why the Feds don't nationalize the RBOCs with the way they wish to regulate us.
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