SCOTUS To Hear Small ISPs' Case Against AT&T

snydeq writes "The US Supreme Court has agreed to hear an antitrust case that alleges AT&T squeezed out small ISPs by charging too much for wholesale access to its phone network. The case, originally brought to US District Court in 2003, had been appealed to the US Court of Appeals for the Ninth Circuit. But AT&T requested the case be heard by the Supreme Court on the grounds that prior conflicting appeals court decisions in this area should be resolved at that level. As part of the case, the Supreme Court will likely also ascertain whether AT&T could be held to violate antitrust law without setting its retail prices below its own cost."

Place Yer Bets

[Aaron_Pike (528044)]

Place yer bets! I'll take 5-4 in favor of AT&T.

... what, no takers?

Squeezed out?

[stainlesssteelpat (905359)]

alleges AT&T squeezed out small ISPs

Where I'm from that would be most unpleasant, not mention unsanitary!!

Hail Ye SCOTUS

[smitty_one_each (243267)]

Hail Ye SCOTUS
Swift to save
habeas corpus,
ISP codpiece, and:
Burma Shave

SCOUTS?

[crimperman (225941)]

There's a theory [cam.ac.uk] that people can read words correctly just as long as the first and last letters are correct.

On that basis.. anybody else read the headline as "Scouts To Hear Small ISPs' Case Against AT&T"?

SCROTUS

[Ukab the Great (87152)]

I misread it as a porn-related article.

Ownership of the network

[Kenz0r (900338)]

IANA US Citizen, so I only have a limited understanding of how you handle things over there. But I think things like a telephone network should not be privately owned. Shouldn't the US government have invested in laying telephone and network infrastructure, and then lease it out to telco's? Then there could have nice fair competition, which would be good for the customer, right? What happened down here in Belgium, is that the government used to own the telephone network, but then partly privatized the phone national company, which now owns the entire network and sells access to smaller companies (similar to the situation described in TFS). Down the line, it's us customers who get overcharged and get really crappy DSL lines.

Re:Ownership of the network

[by Anonymous Coward]

In the US the phone lines are consistently referred to as "the public network" in FCC rules and regulations. I owned an ISP in Michigan and yes the telcos did squeeze out the small guys. SBC offered to sell me DSL lines at 37.99 per month when they were selling them at 39.99 per month. For that measly 2.00 per month per customer I was expected to provide tech support, billing and collection services and accept all of the bad debt risk. At that point I decided to get out of the ISP business and concentrate of other things. Pity that one large company can put 6,000 small ISPs out of business when their infrastructure was given to them by the people (think of the right of way behind you house that they use for nothing.

Re:Ownership of the network

[Lumpy (12016)]

Yup I can also attest to the Above. In the mid 90's I also owned a medium sized ISP in michigan. When 56K became popular and we had to move from 28.8 (we had working 33.6 lines, but then magically the line speeds dropped fast to 28.8 and they would not explain why.) to 56K the Telco I had to deal with gave me prices on the T1 lines that would support 56K dial up channels at a $3500.00 a month rate AND had a fee of per minute charges on incoming and outgoing. It would have forced me to up my rates to almost $30.00 a month from the $19.95 I was charging. Lots of other local ISP's DID up their rates which allowed me to run an extra year at 28.8 speed at $19.95 a month and then we ran the last year at $15.95 a month while I was negotiating selling my customer base and business to earthlink.

The moment you told them you were an ISP or were looking for ISP dial up services, they started treating you like crap. My POP for my internet connection was down near the indiana border because the local Telco's prices were insane and I was lucky enough to have found a backbone ISP that had a decent rate, I paid $2500.00 a month for my T1 line and T1's worth of bandwidth..

Re:Ownership of the network

[ricegf (1059658)]

In the USA, we tend to not trust our governments very much (that whole taxation without representation thing), so we're constantly vacillating between government and private ownership of public services. We often compromise on government-regulated monopolies for such infrastructure, which occasionally works reasonably well.

In Texas, for example, the power wiring is owned by a government-regulated monopoly, but power generation is privately owned and competitively sold to consumers across the public (well, monopoly-owned) grid.

As I understand it, the original wired communications infrastructure ("the Bell system") was installed by a government-regulated monopoly (AT&T), which was later broken up into regional companies ("Baby Bells") that owned the wiring and local phone service. Long-distance service between them was opened to competition, one competitor of which was the original AT&T (which was barred by regulation from owning wires).

Then the telecom market was de-regulated (because we don't trust the government), resulting in the Texas "Baby Bell" (Southwestern Bell, or SBC) buying up several other regional Babies and then the long-distance company AT&T (whose name it took), then diversifying into Internet, satellite TV, and various other communications arenas and re-establishing at least part of the old monopoly.

Does that simplify things? Well, it doesn't help me much either. *sigh*

OK, yes, government ownership of the infrastructure makes sense, but only if you trust government. We don't much, and it shows. So there you are.

"Cost"

[mother_reincarnated (1099781)]

the Supreme Court will likely also ascertain whether AT&T could be held to violate antitrust law without setting its retail prices below its own cost.

That might be because they [were/are] a [monopoly/oligopoly] whose network was largely built at public expense and 'their cost' is a calculated 'average cost' when the rest of the world gets measured by marginal costs...

Remember that the world of RBOCs has a sky of a completely different color.

Bigger ISPs should have invested

[MikeRT (947531)]

I know they never had boat loads of cash, but during their heyday, the big independent ISPs should have invested a lot of money into buying their own lines. Hindsight is 20/20, but if they had spent their money wisely, they could have bought up a lot of cheap dark fiber the way that Google did a little while back. Then, they'd have had a lot of their own infrastructure to play with.

Re:Bigger ISPs should have invested

[adri (173121)]

Google has purchased dark fibre because:

* it was available; because
* a lot of it was put into the ground and bought by other companies; which
* went busted.

Also, laying dark fibre capacity inter and intracity is way, way different to last-mile access. You have to realise that the US market is full of government-granted monopolies which make laying last-mile access not just prohibitively expensive but a political issue. Damn!

Two words

[oDDmON oUT (231200)]

Telecom Immunity

Granted it's not passed the Senate yet, but you can bet your sweet patootie it will, and should SCOTUS miraculously find in favor of the ISPs some slick lawyer will find a way to make it apply here.

After all, those small ISPs were probably run by terrorists, or sympathetic to them, or .... something.

Re:Two words

[mikelieman (35628)]

It is a *lot* easier to ask ONE company to conspire with certain Government Officials to unlawfully spy on innocent citizens without warrant or oversight, than to ask HUNDREDS of little ISPs.

Re:Two words

[cdrudge (68377)]

The small ISPs were the ones that were allowing terrorists to upload child pornography via spam and phishing messages. I think that should be enough to get them shut down now.

AT&T used to actively sabotage competitors' li

[Jimmy_B (129296)]

There were a few years where I had DSL from Flashcom (now defunct). Every time AT&T did any kind of servicing for any of the telephones on the street, they would unplug our DSL connection and blame it on Flashcom. After they did it a few times too many, we would watch for their trucks, and complain before they left to force them to put it back. The only way to get them to stop was to get a line that was shared between DSL and POTS voice. Apparently, they check phone lines for a dial tone before they unplug them, and since Flashcom's DSL lines weren't also phone lines, they didn't have dial tones.

Incompetence, malice, or malice cleverly disguised as incompetence? In any case, it's wrong to give a misbehaving private company exclusive access to vital public infrastructure.

The battle is long over, and local ISPs lost.

[nesta (11896)]

The ISP I worked for just recently folded up due to AT&T's DSL pricing structure. The writing had been on the wall for years, but we hung on as long as we could.

Back in '99 Ameritech was our ILEC, and as they were preparing to roll out their DSL network they actually said that they wouldn't be competing in the DSL market themselves, but would instead do the wholesale side and have other ISPs do the internet services side. That was probably BS, but it didn't matter anyway because they were shortly bought by SBC.

SBC dragged their feet for years, with a very limited initial roll-out in our area. As of now there are still a number of remote terminals in our LATA that haven't been equipped with RDSLAMS, and it seems never will. SBC used their deployment schedule as a bargaining chip against the states that were doing things they didn't like, such as allowing communities to deploy their own telecom infrastructure.

Now AT&T is rolling out their new U-Verse [wikipedia.org] fiber to the neighborhood service. Competing ISPs have no way to get this much faster service wholesale, and AT&T is actively pushing people to convert from their DSL to U-Verse. Our speculation is that no further DSL DSLAMS or RDSLAMS will be rolled out, and that their DSL network and support will continue to degrade. Their answer to any customer that complains will be to switch to U-Verse.

At the same time as the U-Verse roll-out they announced they will be raising the base circuit cost to ISPs by 50%. That was the nail in the coffin for us. The rate we paid for just the individual circuit was already about what the end-user could get the full service at the same speed directly from AT&T. That was before paying for the back-haul circuits to AT&T, our backbone charges, staff, equipment, and other facilities. As a result we had to price our DSL much higher than AT&T, and although our service and support was much better than AT&T's it was extremely difficult for customers to see beyond the bottom line (though many regretted it after it was too late).

SBC / AT&T has been lobbying hard to get out of the Telecomunications Act of 1996 [wikipedia.org], especially the provision that they had to provide access to their DSL service. The first blow was back around 2001 IIRC when they managed to remove DSL as a tariffed product, so they could charge competing ISPs different rates than they charged their own ISP. The next blow was when they got the FCC to classify DSL (and future internet service offerings like U-Verse) as a data service in FCC Order 05-150 [techlawjournal.com], which completely removed the requirement for AT&T to provide ISPs wholesale DSL products. If it was politically feasible I'm sure AT&T would turn off every competing ISPs DSL right now, and it would be (mostly) legal to do so. Instead, though, it seems they are going to slowly phase out DSL by offering a faster service that they never had to allow ISPs to use, and to make the transition faster keep bumping up the wholesale rates until all the DSL providers are forced out of business.

I wish LinkLine Communications all the luck in this case. It's clear to anyone who has dealt with SBC / AT&T wholesale DSL that AT&T is doing what they can to push out the competing ISPs who use their network. I can't say I'm optimistic that they will win, or even if they do that it will do any good. The FCC and the state governments were bought and paid for a long time ago.

It's a difficult situation for them too

[Douglas Goodall (992917)]

I remember that when DSL was first rolling out, there were a number of factors that affected the speed that your line could be provisioned for. Not all these problems occurred on purpose but still had to be dealt with by AT&T when they allowed third party DSL providers to operate. Bridge taps, disturbers, packaging options as well as unfortunate distances from the CO all contributed to the difficulty in making a DSL line work. There was also a cute little module at the demarc that allowed them to remotely disconnect the line for testing that had to be removed before DSL would work. Sometimes not worth the trouble to AT&T for their piece of the pie. Experienced people know all these terms by now. Learning them was part of the task of making a homeowner know things previously known only to communications engineers contracting for data services with the telcos. "Provision-Speak" I call it. I know something about this having worked on the firmware for Copper Mountain DSLAMS.