High-speed Internet is going to cost more; you can blame the FCC

SJ Mercury News ^ | 2/21/03 | Opinion

[NormsRevenge]

IN the most important telecommunications ruling in years, a three member majority of the Federal Communications Commission made a sort of Sophie's Choice this week.

To the delight of long-distance phone companies and to the dismay of the Baby Bells, it voted to largely preserve rules that promote local telephone competition; but it sold out budding rivals to the Bells in the fast growing market for high-speed Internet service, virtually ensuring fewer choices and higher prices.

[quack]

Charter Communications.I'm in Alabama.Not sure if that makes a difference on cable prices or not.I already had all the cable channels
and when I called to get my internet connection the guy told me it was only $10.00 more.I was expecting around $40 more.

[Not_Who_U_Think]

"I use COX cable and my broadband costs me $34.95/month total! "

Except you have to have cable to begin with. I'd rather not - it's just something else to watch and waste time on - and keep the DSL instead. But you are correct in that the fee for internet access is less than for a separate service.

[Pagey]

Overall, the decision could usher in a high-speed Internet that will look far different from the dial-up Internet..."

What is dial-up Internet? Huh??? Geeeeeeez, that was, what---10-11 years ago......? LMAO!

[strela]

Overall, the decision could usher in a high-speed Internet that will look far different form the dial-up Internet, where a plethora of choices was a powerful driver of innovation in content and technology.

Jefe: We have stuffed many pinatas for your birthday celebration!

El Guapo: How many pinatas?

Jefe: Many pinatas, many!

El Guapo: Jefe, would you say I have a plethora of pinatas?

Jefe: Yes, El Guapo. You have a plethora.

El Guapo: Jefe, what is a plethora?

[Bogey78O]

For some reason we still haven't found a way to sell broadband for less than it costs to offer it and turn a profit. If only we could re-invent economics.

[eeriegeno]

Even Powell, a champion of deregulation, decried this decision, saying, ``Line sharing has clear and measurable benefits for consumers.

Forcing the local telephone companies to allow competitors to use floor space and equipment at a below cost price, in the name of competition, is simply wrong. That floor space and equipment is the property of the local phone company and its investors, not the government or the competitors.

An equivalency would be: Joe, garageman A, has no garage but his neighbor George, garageman B, has an 8 bay garage. Gov't regulations force George to allow Joe to use two bays, and the tools, of George's garage at a 'below cost' rental price so that car owners will have a choice of whichever garageman they want to use. The hope, by regulators, is that car owners will benefit because Joe and George will be competing for the same customers. Joe can charge his customers less for repairs since he is using, at below cost, the space and tools that George invested in. Meanwhile, George has to raise his prices to cover the loss use of 1/4 of his garage capacity, not to mention the loss that he is taking by being forced to provide space to Joe. You don't have to be a rocket scientist to conclude that George will soon be out of business and that Joe will own the garage.

Only in America!!!!!!

[HAL9000]

Here is another analogy: By law, the phone company can come to your home, enter your private property, condemn it, bury cables and install poles in it, and take it if they want to.

Does George garageman B have any quasi-governmental powers of eminent domain like the phone company so he can build part of his garage on your property? And shouldn't the goverment pass some anti-competition laws to make sure Joe garageman A can't access the garage that George built in your front yard?

[steve-b]

Forcing the local telephone companies to allow competitors to use floor space and equipment at a below cost price, in the name of competition, is simply wrong.

That was part of the deal, in exchange for which the telephone companies got an exclusive right to string the wires and the right of way to string them without having to get permission from individual property owners.

Your argument would be correct if the "last mile" were really the private property of the local phone company. For the reasons noted above, that is not the case.

[jayef]

I don't know how to refute this lie any clearer. The ILECs are not selling collocation space and loops at below cost. This is a flat out lie. There are a great number, a plethora if you will, of economic studies out there that demonstrate this. Your whole argument is hinged on this faulty premise.

Furhter, you must distinguish between UNEp and Facilities Based Providers. Companies that relied on UNEp only have not been successful. Companies like mine that are faciliites based i.e. have switches, equipment, collocation space, technicians, trucks etc. are the ones surviving and creating value for consumers.

[habs4ever]

Here is Gilder's position:


http://www.gilder.com/Gilder.comNews/GGWSJ02.19.03.htm

[jayef]

That's one argument. Furhter, the ILECs have charged monopoly rents for these facilities for decades and in many cases they have been paid for many times over. I'm supposed to feel sorry for companies like BellSouth who earned $6B in operating revenue. Their arguments just don't hold water.

They argue that CLECs are killing them, but it's the CLECs that have gone bankrupt. Boy those sweetheart deals we got from the FCC really were magic, eh?

They argue that cable companies are killing them in broadband deployment. That's interesting. In South Carolina, BellSouth has seen a 300% increase in the number of DSL subscribers since January of 2001.

They argue that wireless is putting the pinch on them. Let's see . . . BellSouth . . . Cingular. That's like arguing that your wife is really killing you with her earnings.

What the ILECs don't like is competition. They really liked their monopoly position. Feel sorry for them if you want. Fell sorry for the companies that have been bilking consumers for decades. Feel sorry for companies that introduced new products, lower prices and better service only when FORCED to by emerging competition.

I, on the other hand, will just continue to beat them in the marketplace everyday by offering superior value and service to my customers. I will continue to fight them in the legislatures and regulatory commissions as they make every effort to sabotage competition. I will continue to fight for my customers who love what we do and how we do it.

[eeriegeno]

That was part of the deal, in exchange for which the telephone companies got an exclusive right to string the wires and the right of way to string them without having to get permission from individual property owners.

I don't know where you live but in my state the telco can install the 'last mile' wires in the road right-of-way without consent of the property owner BUT if a pole, buried wire, or hut is to be installed on private property the telco must obtain approval from the property owner which sometimes comes at a high cost to the telco. Been there, done that, many many, many times.......

[eeriegeno]

There are a great number, a plethora if you will, of economic studies out there that demonstrate this

Send me one of studies. Maybe you and I can agree to disagree while this robbery takes place?