Telcos Want Big Subsidies, Not Line-Sharing 340
It seems that a recent survey of global broadband practices by Harvard's Berkman Center at the behest of the FCC has stirred the telecommunications hornet's nest. Both AT&T and Verizon are up in arms about some of the conclusions (except the ones that suggest offering large direct public subsidies). "Harvard's Berkman Center study of global broadband practices, produced at the FCC's request, is an 'embarrassingly slanted econometric analysis that violates professional statistical standards and is insufficiently reliable to provide meaningful guidance,' declares AT&T. The study does nothing but promote the lead author's 'own extreme views,' warns a response from Verizon Wireless. Most importantly, it 'should not be relied upon by the FCC in formulating a National Broadband Plan,' concludes the United States Telecom Association. Reviewing the slew of criticisms, Berkman's blog wryly notes that the report seems to have been 'a mini stimulus act for telecommunications lawyers and consultants.'"
I see what they did there... (Score:5, Interesting)
Free money, no mandates. This sounds like the initial Bush stimulus package, so it's entirely without precedent.
If their development is going to be subsidized with federal funds, they damn well better open those lines. And they should be required to meet coverage quotas if they want any of those rural development funds.
Re:I for one, (Score:4, Interesting)
There are, however, several things to consider especially when it's about telco's.
Lets say you've ordered a pizza delivery guy to bring you a big fat pizza with some coca cola, because frankly you've a little bit hungry. But what will the pizza delivery guy do if you're mean to him? That's correct, he will not give you the pizza. You might try calling a different pizza place, but you're out of luck if your area doesn't have one or they're already closed after 9pm.
It's basically the same thing with telco's. Only way to change that is to get government to do something about it.
Re:We paid for the lines. Share them or get off. (Score:1, Interesting)
Better hurry,
Sarah will give them the network as a present.
If they own the pipes, they will take much better care of them and have much more incentiv to invest in upgrades!1!1
More competition needed (Score:5, Interesting)
Verizon notes, open access and unbundling would be a bad policy for the United States, largely because of the rural nature of much of the country. "The problem in these rural and low-density areas is that they have been unable to attract even a single entrant," the telco argues. "Imposing unbundling will not only fail to solve this problem, but will only make things worse: if the economics do not currently support a single provider, they are even less likely to support multiple(and potentially an unlimited number of) providers."
I'm not sure that you can have worse service than no service. There are many areas that only allow one (or a few) providers. If that one provider chooses not to give service to a part of it's service area, those people are screwed. Maximum innovation will come from maximum competition. It's called capitalism, but it always seemed to me that capitalists usually want the least amount of competition possible.
Re:Fascism, DUH (Score:4, Interesting)
If we've always been a fascist nation, and we're the sole remaining superpower, the whole welfare-welfare state thing has a pretty good track record, huh?
The only quibble I have is that corporate welfare really only came into vogue with Reagan after our ideological rival, the soviet union's fate was pretty much sealed. We should probably try to figure out if corporate pandering is good for an economy, like social safety nets are. Personally, I'm putting my money on bad - and think we should return to a single welfare state.
Re:I see what they did there... (Score:5, Interesting)
We already did that once and I've got relatives that still only get 9600 on dialup, no chance at DSL, and they live in a town with 1200+ people/sq mi, if only 10,000 or so people.
They'll take the money, kick out a fat dividend, and then spin off a paper company with the responsibilities, destined to fold.
Re:Fascism, DUH (Score:3, Interesting)
Describing fascism as a government with business interests makes the definition far too broad to be useful, the only possible reason to do so is to invoke an emotional response at the very word fascist.
Re:No problem, give them all the subsidies they wa (Score:1, Interesting)
By law, nobody employed by the federal government is allowed to pull in a higher salary than the President (currentky 400K/yr). This includes bonuses. I see no reason why corporations accepting bailout money should be treated differently.
Re:We paid for the lines. Share them or get off. (Score:1, Interesting)
Verizon is one to talk. When I live they don't even have the infastructure to support broad band. They have said in prepared statements for the last 10 years they were going to expand broadband in my area. Instead I have Comcast as that is the only player I have. All the lines in my area are copper based and they have no desire to change that. They are waiting for the government to pay for it a second time. Don't get me started with their wireless company. Their billing is a joke. You don't max your minutes or use any features not in the plan yet each month the price is different. No explanation from them when pressed either. I will never go back even if they were the only wireless carrier in town.
Re:I see what they did there... (Score:3, Interesting)
You misspoke. I'm a conservative. I'm against all forms of welfare for all people, except as a last-ditch safety net (i.e. you lose your job; you get unemployment funds).
You know a lot of the problems with our internet would be solved simply by revoking ALL monopolies that Comcast, Cox, Time-warner, et cetera hold over local neighborhoods. If you allow competition, then the People will be empowered to avoid the shitty companies and chose alternatives (like Apple TV or Linux ISP). We don't need a top-down approach. We need a bottom-up approach where we free the locals from the shackles that currently chain them to Comcast (Cox, TW, etc).
Re:More competition needed (Score:5, Interesting)
Why not more regulation?
Telecom is by all appearances a natural monopoly, like other utilities. If you take AT&T and Verizon and break them up into little pieces, in about 15 years you'll be right back to where we are now in this market. We know this because we tried breaking up Ma Bell, and within about 15 years we were back to an oligopoly (and probably would have been back to a monopoly had the FCC and FTC allowed it).
The ways to handle utilities, in order of my preference at least, based on the experiences of residents where each of these are applied:
1. Publicly owned and operated: This isn't perfect, but by all appearances can do a really good job. When was the last time you thought about your municipal water and sewer service? That's the sign of a well-run utility.
2. Heavily regulated monopoly: This is the electricity market in a lot of places. Again, far from perfect, but customers generally aren't bilked and service is usually pretty decent.
3. Less regulated oligopoly: This can be decidedly unpleasant if the various players realize that they can earn more by both of them bilking their customers rather than trying to take market share away from each other. The regulations can help prevent problems, but are generally less extensive than the regulated monopoly.
4. "Free-market" free-for-all: Think California during the electric deregulation. This typically is really an unregulated oligopoly.
5. Unregulated monopoly: Standard Oil et al. Typically, the monopoly makes a huge bundle of cash while all the customers (who often have little choice but to pay) get bilked.
Right now, telecommunications is sitting at option 3. AT&T and Verizon would both love option 4, and whichever one is capable of buying out the other would really really like option 5, but for the purposes of serving customers you're typically better off with option 1 or 2.
Re:I see what they did there... (Score:3, Interesting)
Or sell the division to a sucker who can't figure out that they will fail, like the recent sale of the landlines in New England to FairPoint.
Though, in this case, FairPoint was so obviously unprepared, it showed in their business plan as submitted to the PUC (fuel and labor costs won't go up for 5 years, yet you haven't prepurchased fuel nor have you finished negotiations with the Union. They won't go up. Really?).
But, point taken. Verizon got a LOT of money to put better phone lines and Internet access in to rural areas. None of it ever happened. FairPoint walks in, agrees to all of the conditions Verizon was paid for, submits a business plan based on some alternate reality where money is free and Internet connections grow like marshmallows on magical faerie trees, and declares Chap 11 within a year. Wow, surprise surprise!
The subsidies should be paid after the services are available, not before, and should be paid to the people who managed to turn it on. Once subsidies are involved then everyone should be able to use the connection, with the telco allowed to reclaim their costs and make a reasonable profit on those portions of the infrastructure that were not covered under subsidy (company can accept a 50% subsidy, for example, and is allowed to charge competitors a higher rate based on the fact that the company paid for half of the wiring, but once you accept subsidies you must also accept competition).
Or we need a "public option" for Internet access. Instead of the government paying private companies to put in lines then forcing those private companies to allow access to the wires, simply have the government put in the wires and charge anyone who wants to use them. Then if a company thinks they can put in their own wires more cheaply, let 'em, and the company can do with those wires as they wish since no government money went into them. As long as the government has wires everywhere, competition will be available and no one can declare a monopoly, but if a company can do it cheaper than the government they are free to do so.
Re:I see what they did there... (Score:3, Interesting)
Can we see some citation please?
And I don't mean providing a link to some blogger's opinion (which is the typical response), but some actual FACTS that trace the money flowing into telephone companies coffers, and money flowing out to rich person's pockets. From my reading of the 1996 Telecom Act, the money was earmarked for laying digital phonelines, not internet. i.e. Blame Congress for poor planning
Re:Fascism, DUH (Score:5, Interesting)
War and weapons define the American economy. Boeing and Raytheon and Xi could be considered the ultimate achievement of which a fascist society is capable.
When I was a child, President Eisenhower warned of the "Military Industrial Complex". Apparently we didn't heed his warning.
We should abandon this socialism
Corporatism is NOT socialism. Socialism is the polar opposite; socialism tries to make a better society (usually failing, however). It is facism, though. What kind of people rail against giving welfare to the poor but have no problem giving it to the rich?
Break Them UP (Score:1, Interesting)
Here is an IDEA
The Govt should come in an break up any telco who has a single point of entry into your house.
1) The telephone company
2) The cable company
They would create 2 divisions, physical plant division who would be run as a non-profit type co-op and a Media div who would have to buy their service from whomever they want.
The rates for delivery of content over the different wires would be set on actaul operation costs averaged out over the whole plant. Ie if it cost $1 per line to maintain the plant then access would be billed at $1 per line.
The govt then could allow these physical plant co-ops to merge so you could purchase coper rights on coax, pairs, fiber whatever is currently run to the house.
All the billing to the users would have a plant upgrade fee which would go into a fund to pay for plant upgrades, ie replacement of the copper with fiber.
This would level the field as AT&T, Comcast, Verizon, XYZ Telephone would all pay the same to access a house. The only diff in their costs would be content and back haul charges which there is already competition for these.
Re:I see what they did there... (Score:2, Interesting)
Comrade Commode-Soixante-Quatre-Amour
Bottom-up only works properly if the top-down regulations permit fair play. Otherwise we end up with robber [railroad|telco] barons all over again and *that would never do* (to quote the Fat Director whose poor railway was nationalised as a knee jerk reaction to crappy capitalism at work!).
There was a good reason why the pendulum swung to the left in the early-mid 20th century. We've seen it swing back since, and I'm sure it's in the process of swinging back again this time. Here's hoping the telecoms industry in North America gets a belated kick up the backside as a result.
Re:Fascism, DUH (Score:3, Interesting)
Then why is ovrer 2/3rds of the American economy based on CONSUMER spending[1] instead of WAR or WEAPONS? And of that, most of it is spent by women.[2] (See the numerous articles on ecomomics and how they are all worrying about women not spending more but vowing to spend the same and live more frugal lives for the evidence.)
Not to mention that the USA spends only about 4% GDP on Defense[3] at the national level last I was aware.
Hmm...not much of a leg to stand on for your claims, now is there?
[1]2009-10-11 USA Today Article [usatoday.com]
[2]dated article on consumer spending (2003), but matches what I've recently read in the last month per the point [inc.com] and a more recent article on women being frugal [pittsburghlive.com]. and yet another article on frugal consumerism in the USA [bostonherald.com]
[3]Wikipedia USA Military budget - with reference links [wikipedia.org]
Re:I see what they did there... (Score:5, Interesting)
Well, with my experience with the utilities in Illinois, I'd say let the municipalities run the utilities. Springfield's CWLP (whose manager bears an uncannily striking resemblance to Mr. Burns) is owned by the city. We have the lowest rates, the best customer service, and the least downtime of any electric company in Illinois.
When two F2 (almost F3) tornados ripped right through my neighborhood [wikipedia.org] in March, 2006, completely destroying the electrical infrastructure, we had power within a week. The telcos and cable took a month to get service restored, and they didn't even have to plant new poles.
Later that spring (June IIRC) a weak F1 went through the St Louis area. I visited my friend in Cahokia, [wikipedia.org] who has the privately owned Amerin, and the damage was minimal. I didn't see a single line down or broken pole. But he was without power for a month.
Private utilities are not beholden to their customers; only to their stockholders. It's not like you can take your business elsewhere. Publically owned utilities are beholden to their customers; bad electric service loses an election for the Mayor. He IS accountable, Amerin's CEO is not.
Re:I see what they did there... (Score:5, Interesting)
I live in NYC and the phone company won't even provide broadband. I can get Internet from the cable company, but Verizon says neither FIOS or DSL are available in my area.
That's in the country's largest city. The idea that internet sucks because our population density is too low is absolute hogwash.
Re:I see what they did there... (Score:2, Interesting)
More FuckUSA-ll, It is just politics as usual. I am ~60yo (USMC 1969...71), I know that the USA has gone from wise and strong to too damn dumb to know wrong. Macro economics are a 20+Year model, not a damn over-night fad, or one-night stand. Applauding Bush or Obama today is absurd. Bush is a past FU. Obama has some chance. The members of congress and senate are lost (out of thouch with the public) or corrupt (in touch with a personal agenda). The USA Constitution I still have faith in, but religion/idiot nepotism is ready to change the laws of the land to protect their interest and FuckUS The People [AKA: The Public].
In the 60's they said love it or leave it. By the 70's I had earned the right to say love US and make it all better. After the last 40 years of political crap that provides ever increasing FuckUS, I now say it is part two.
The world was crap in the dark ages, because of religion. The separation of church and state ended the birth-rights aristocracy with merchant meritocracy seeking equality in democracy.
Merchant-class nepotism is no more a democracy any more than birth-entitled dogmatist is capitalism. The Powers-That-Be (PTB) religious/economic intend to retain ruling power over the feudal public.
After forty years years of ever decreasing social value economics (Health, Education...), I expect less tomorrow, and I do not expect a champion to arrive or survive the entitled nepotism-class of the modern USA. Politicians and pundits can point the finger of blame for personal gain and never consider the loss for US (I call it treason).
Separation of church and state happened to end the aristocracy (church leaders were dissatisfied with subservience).
Separation of plutocrats and state must happen to end nepotist-entitlement, return to democracy and capitalism.
It ain't about capitalism, communism, democrats, republicans, gods, devils... it is about BIG-FUCKING-FAT-LIARS and US the Public being oppressed serfs of an entitled-class of FuckUps. Not much has changed since the fall of kings and queens.
Less taxes for the nepotism-class and more taxes to pay for pseudo-capitalist failures.
Bush and cronies did start the most recent pseudo-capitalist bailouts, and tried to stave it off until they were out of office by accelerating money printing, getting social security payments put into an insolvent wall-street stock market....
Re:I see what they did there... (Score:3, Interesting)
Democrats - what you get when the public realizes it can vote itself bread and circuses.
Dude, I've started to hate the Democrats myself but this last line of yours is utter bullshit. You realize that the GOP does the exact same thing, right? GWB tried to have his cake and eat it too -- massive tax cuts that he wouldn't even back off from when we went to war. For the first time in the history of the Republic we had a war without a tax increase to pay for it.
If that doesn't qualify as voting yourself bread and circuses then I don't know what does.
Re:More competition needed (Score:4, Interesting)
I think about my municipal water and sewage service all the time. It's actually a real concern that I might get them.
You see, I live in the country, and paid quite a bit when I bought my house to put in a new septic system that should last me 30-50 years. However, the nearest city recently (against the wishes of anyone nearby) decided to put in a new water treatment plant a few miles down the road. Not close enough to really bother me, thankfully, but close enough that they might want to run lines to my house.
That's great, right? Government at work, getting better sewage system out to the country.
If the county runs sewer in front of your house, you are *required* to pay to be attached. That means thousands to tens of thousands of dollars of direct costs that you are required to pay, regardless of whether your current system still has 30 years of life on it, and for no real direct benefit to you.
Government-run utilities can do good things, provide good services, all that. But it's still government, and there's still a "must" attached to it that can really screw you over if you're caught on the wrong end of their plans.
Re:We paid for the lines. Share them or get off. (Score:4, Interesting)
We tried that already in 1996 in some parts of the country. I don't think it ever made it everywhere. The problem was, the State came in and said to the incumbant telco that they would permit other companies to use their lines for some payment (say $1 per line) ignoring what their own information and that of the telco said it cost to maintain the line. Say the real cost was $5 per line.
The result was a bonanza - lots of start-up companies formed to take advantage of this huge disparity in costs. They got plenty of investors because just dealing with the arbitrage between the $1 fee and $5 real cost could result in $4 getting passed around. Just collecting the interest on this money was worthwhile if there was enough of it.
Well, obviously nobody spends $5 on something and sells it for $1, at least not very long. Nearly all of the DSL start-ups failed when the real terms of the deal becaome known to everyone. We still have some folks trying to play at this game of paying less than what the service they are getting costs. Vonage is there because of this play and the bones of the whole Sprint ION fiasco. End result is that there is a real cost and if you separate by force the profit from the cost the cost has to be paid somehow.
Nobody wants that. We have been hiding the cost of physical line maintenance for a long time, probably since around 1960 or so. And the structure of the incumbant phone companies allowed these costs to be very effectively buried. So effectively that today nobody knows where the real cost-sinks are.
The end result of this is likely another stab at state-mandated fees for line use. And whatever the fee is, it will be too low for reality. My guess is this time around they will really break the system and the lines will simply not be maintained for years.
Re:I see what they did there... (Score:3, Interesting)
What happened in Illinois was simple. The state decided the lines should be open and decided the lines should cost some fixed amount statewide. Doesn't matter what the cost was, it was way, way below what it cost to maintain the copper wires. But the state "knew" that since the wires were already there, in the ground and on the poles, that there were no more real costs.
This resulted in great "openness" and a real bonanza for DSL startups. Just like you would think it would.
Only problem was, a small dose of reality got injected because the folks maintaining the lines adopted a go-slow policy on actually making this stuff available below cost. I guess they could have decided to go along with the state's wisdom on this matter and ended up either trying to finance the line maintenance some other way or just gone out of business. I guess neither option really appealed to them.
End result is no more "openness" and no more state-mandated access to what is now SBC's copper. It was an interesting period from around 1996 to maybe 2002, but it accomplished nothing and was entirely driven by the state imagining they knew enough to run Ameritech's business. They didn't and it showed. I am not in favor of trying this again because for anyone that really needed services from Ameritech (then, SBC now) it put up huge roadblocks - they couldn't deny services to folks that wanted to resell DSL service if they were servicing other customers quickly. So everything was go-slow for years.
Re:I see what they did there... (Score:3, Interesting)
>>>Private utilities are not beholden to their customers
No but being regulated monopolies, they are beholden to the government who operate as the boss. If you're friend was without power, then it's because his *government* fucked up and did not do its job.
I experienced a power outage in Maryland after the remnants of a hurricane blew through and wiped-out power throughout the whole region, and the Baltimore G&E company had my power back in just one day. That's because the government has a law - you either get the power turned-on within three days, or you'll be fined several million per day. That's what the government of Missouri needs to do with its private-but-publicly controlled electric company.
Re:I see what they did there... (Score:4, Interesting)
We used to have a good utility system in Alberta, until the conservative government of the past decade or so started to privatize the utilities. Now, the quality of service has generally gone down, while prices have gone up. The idea was that by introducing competition, that the oposite of what I just described would occur.
Oh, there's competition now alright - yesterday my 84-year-old next door neighbour told me about a phone call she got from some unknown gas company trying to convince her to bundle gas and electricity into some contract-based plan. She asked them to send an information package, and what they did was sign her up, and send her the info. Fortunately a bright relative of hers sent a letter to the company and straightened it out, removing her from their list. Things like this happen all the time now. I even heard that when the AB government was considering de-regulation of electricity, the state government of California warned them not to do it, citing the awful experience they had with the same experiment in the late '90's. But then, this is Alberta and we don't listen to reason.
Re:I see what they did there... (Score:2, Interesting)
When two F2 (almost F3) tornados ripped right through my neighborhood [wikipedia.org] in March, 2006, completely destroying the electrical infrastructure, we had power within a week. The telcos and cable took a month to get service restored, and they didn't even have to plant new poles.
As I work for a telco/cable provider let me give you some insight into the accuracy of this. In the past it was the telco -- Ma Bell -- that provided the poles for the power wires to be strung up on. Now it's the Power company who's responsibility it is to plant the poles (even if they get some of the baby bells to do it for the power company on a contractual basis).
If the cable company or telco were to place their wires up on any of those poles prior to the power company, they will find these wires ripped down by the power company. The cable company and telco can even find their wires ripped down in a neighborhood that the power company has finished re-stringing the wires into but have not been properly cleared for power activation/restoration.
So, as a general rule to stop the needless waste of sending trucks out for re-wiring; the telcos and cable company will wait for the go-ahead (usually a call, sometimes a letter) from the power company telling them that the neighborhood is clear for their wiring. Sometimes the power company is efficient and will inform in an expedient manner. Most times the power company is a hulking monster with the right hand not telling the left hand what it's doing and delays occur. Long delays