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Broadband Competition Shot Dead By FCC

I struck up a conversation with a Bellsouth tech last week who regaled me with all the planned improvements Bellsouth hoped to make with its network. He was a DSL tech as well as a line installer and was quite fluent in the upcoming technology. Among the gems he threw out were a 6 Mbit download speed coming in September and video on demand coming soon afterward. The goal is 100 Mbits to the home, and will be here sooner than you think. Bellsouth has embarked on an aggressive deployment of new DSLAMs to growing neighborhoods with the goal of bringing fiber to within 5000 feet of their subscribers.

The video on demand stuff sounded appealing, as that’s where I expect things will be heading. I’ve said for a while that the television network is a dying breed. PVR’s like Tivo blaze the way for viewers to purchase their programming by the half-hour, not by the channel. Bellsouth hopes to capitalize on this with their video service, which will pipe three or four simultaneous channels into your home over their copper. Then again, those of you who were in the game in the early days will remember that ISDN was hawked for video on demand. Look how that turned out!

The tech repeated a line I’ve often heard from other telecom technicians: things aren’t fair because the phone companies are regulated and other ISPs (like Time Warner, or competing DSL providers) are not. The view from the phone companies is that their hands are unfairly tied. That all changed last week when the FCC has effectively killed DSL competition. The ruling allows incumbent carriers like Bellsouth to cut loose competiting ISPs from their DSL network. No longer are the ILECs required to offer their copper to competiting providers. As others have noted, the future doesn’t look good for Internet users.

In many other cases it would be a win for a free market. It doesn’t quite square here, though, because the phone companies owe their existence to their early days as monopolies. That fancy infrastructure the phone companies so jealously protect was bought and paid for at the expense of you, the ratepayer. AT&T executives used to brag how the government, in the name of national security (sound familiar?), paid for a large chunk of its network.

So if we want to talk about fairness, we should take that monopoly into account. We should also take steps to ensure another monopoly doesn’t grow up around broadband access. Last week the FCC opened the jailhouse door and now the robber barons are on the loose again.

If there ever was a time for home-grown, wireless neighborhood networks to show how broadband shold be, it’s now. Let’s dust off those yagis and get to work.

  1. Among the gems he threw out were a 6 Mbit download speed coming in September

    You should have asked him about the upload speed – that would have deflated his sails. The broadband ISPs proudly advertise their download speeds, but you rarely hear them say a word about the other direction. Try e-mailing some pictures to your family at a paltry 256 or 384 Kbps. I realize that this is ADSL service, but that asymetric part needs to be a little less so.

    PVR’s like Tivo blaze the way for viewers to purchase their programming by the half-hour, not by the channel.

    Don’t give the local cable TV monopoly any ideas! Can you imagine how much they would gouge us if they could charge by the half-hour? On the surface it sounds like a good idea for the consumer, but it’s a sure bet that the cable TV companies will squeeze you for every penny they can get.

    There’s also a privacy issue here. If your video service provider (VSP?) sells blocks of programming to its customers, they will be sorely tempted to also sell your viewing information to marketers for targeted advertising. No thank you. There’s something to be said for annonymous viewing.

  2. i am a bellsouth alum and while i have no love lost for the amalgomation of over-the-hill telecom cronies at bellsouth or BS as we used to call it, the fairness of the UNI-P laws to the ILEC’s was nothing short of crippling…in the beginning Now that is not to say it wasn’t deserved. After all Ma Bell had been soaking customers for 100 years as the only game in town for phone equipment, phone services and the EXTRA profitable long distance business. What UNI-P did was to knock these guys off their blocks for 10 decades of malfeasance. That was the penance the jail term…the FCC said to the RBOC’s…”hey, as punishment for 100 years of lies and thievery, you are hereby sentenced to the following:

    1) give your network up to the competition
    2) you must prioritize their trouble complaints over your own troubles
    3) it is illegal for you to win business contracts on the basis of price
    4) everyone can now sell long distance and you have to reapply individually to do it
    5) reduce your corporate presences to mere regional players and the strong will grow and survive”

    While this was a harsh penalty…it was just. I was a casualty of war as I was laid off from bellsouth as a direct result of competitive threat from both FCC-regulated service providers and non-FCC-regulated equipment vendors. I hated the company and I hated the reign of Michael powell as FCC chairman (seriously, with all the things Colin Powell did right, he should have been home a little more for his son growing up.)But, what it did do was FORCE the LAZY RBOCs and ILECs to THINK. Something they were not accustomed to doing. The result is the explosion ob broadband services to the home and rural america.

    because the ILECs were ONLY required to share EXISTING Copper and FIBER facilities with the UNI-P competitors, they were not required to share NEW facilities or network expansions with UNI-P competitors. Only what was deemed the Public Telephone Network. Anything added after the telecom act of 1996 was proprietary…which was one of the big spurs of the telecom/dot com boom of the late 1990’s and subsequent BUST when the RBOC’s and ILECs ran out of money and shareholder confidence that they knew what they were doing (which they didn’t).

    But, what the dot com era did do was get everybody horny for broadband and while 4 in 5 dot coms went belly up, they left the RBOCs thinking…Hey, if we put our money into developing new capacity and technology for our consumer clients that have been with us for 100 years, we can start selling them more than just caller id.

    so the RBOC’s gambled all their available cash into developing things like broadband capabilities to the home. These customers aren’t going anywhere and RBOC’s could give them more services over the same connection and increase the average monthly home bill (which had been steadily declining for 10 years) from about 31.00 a month to about $44. 00 a month.

    Hey what a great idea. Now Bellsouth has what they call the B-RIB or the Bellsouth Regional Internet backbone. Which is a regional MPLS cloud that is 100% proprietary, 100% fiber to OC-whatever capacity and it is about 2% used. No competition allowed on this baby, hey you can even bring your own connection from out of the Bellsouth region if you want, we will give you a POP to connect to if you require. Private line, VoIP, Internet access, multi-site VPN is all available via the B-RIB. the broadband competition is dead because the federal government went ahead and put the remaining stragglers out of their misery. Unless you used the 9 years of deregulation to build your own network, deliver your own services or provide your own dial tone you have had your walk out behind the woodshed that has been a long time coming.

    The best thing that deregulation did was to spurn the idiots at the RBOC’s to think. cut loose the dead weight of an overburdened giant (by getting rid of non-essentials like I was) and it forced them to reinvent themselves so that they did not have 100,000 employees relying on a business model that was dying a slow and agonizing death as millions of people woeld have met a worse fate had they been left to their own devices.

    Or, I could be mistaken

  3. I’ve been meaning to thank you for providing this perspective from an insider. It is fascinating.

    Thanks for dropping in!


  4.…it’s J.tew. I am happy to share any proverbial “pearls” with your audience. The business is fascinating albeit very dangerous…Bellsouth has finally taken the lead of competitors and realized that you can actually sell yourself outside of your assigned 1984 MFJ deliniation set by US Appellate Courts. Bellsouth has started trying to sell busines-class services outside of its region, to offset diminishing returns in their 9 home states. They are on the verge of no longer being a merger buddy or acquisition target…but the UNI-P legislation was allowed to expire just in time to save them otherwise Dwayne The CEO would have run them right into the ground.

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