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Wholesale/transport services

Fed Reg Debate Heats Up

As the Federal Communications Commission (FCC)'s review of regulations in the telecommunications industry approaches completion, the cheerleaders on either side are working themselves into a lather.

Wednesday, the Telecommunications Industry Association (TIA) decided to dive into the debate headfirst. Backing up the incumbents' line of defense, the organization sent a letter to FCC Chairman Michael Powell outlining the findings of a study it has done on the link between cuts in carriers' capital spending and a decline in quality of service (see TIA: Capex Cuts Cripple Quality).

"[T]he recent and projected broad downward trends in capex should cause alarm bells to go off among regulators at every level,” TIA president Matthew J. Flanigan writes in the letter. “Concrete action must be taken quickly to restore the balance between regulation in service of the public interest and the creation and maintenance of a regulatory environment that will promote investment and shareholder value.”

The Bells have been arguing for months that the FCC should dismantle the 1996 Telecommunications Act regulations that oblige them to let their competitors lease access lines and network elements at set wholesale prices. They insist that the regulations are causing them to lose money and dissuading them from investing in their networks (see Whitacre: Regulations Will Wither, and SBC's Fed Up, But So Are Its Critics).

While TIA is pushing hard for the FCC to remove regulations on broadband, it claims not to have a position on whether or not the agency should dismantle the entire unbundled network elements platform (UNE-P). “We haven’t gotten involved in that particular exercise,” says David Owen, the chairman of TIA’s public policy committee. However, the organization’s report, which shows how Ameritech’s customer complaints exploded as the company cut capital spending in the 90s, is bound to be used by the RBOCs to support the argument for a complete end to regulations.

The report cautions that the huge reduction we’re seeing now in incumbent capital spending will have dire consequences. “Nothing good has come out of the ILECs feeling inhibited to make investments in their networks,” Owen says.

Other organizations have been voicing their support for getting rid of, or at least scaling back, regulations. Dan Phython, senior vice president of law and policy at the United States Telecom Association, speaking on a panel at the UBS Warburg telecom conference in New York yesterday, said: “If the Commission does the right thing, there will be more spending on the side of the incumbent carriers.”

At the other end of this debate, the competitive carriers and their supporters have been equally vocal in their resistance to dissolving regulations, insisting that would mean an end to competition altogether (see AT&T's Dorman Disses RBOCs, and Report: DSL Is Profitable). The Bells aren’t losing money and cutting capital spending because regulations treat them unfairly, they argue, but because they don’t know how to compete.

"The Bells need to learn to be wholesale carriers... They’ll make a lot more money if they do,” said Robert McDowell, the vice president and assistant general counsel of the Competitive Telecommunications Association (CompTel), speaking on the UBS Warburg panel yesterday. “UNE-P is here to stay... Two to three years from now, it won’t look a lot different than it does today… You can’t just pull the plug on UNE-P.”

While the FCC itself insists that no decisions have been made, industry observers believe a compromise is in the works. “There will be constraints put on UNE-P,” UBS Warburg analyst John Hodulik said after the discussion. “There’ll be something more favorable for the Bells. The question is how favorable.”

“There will be no winner,” opined Robert C. Atkinson, the director of policy research and special projects at the Columbia Business School. No matter what the FCC’s decision turns out to be, he insisted, individual states will continue to play a major role. “The FCC just couldn’t come up with an optimal decision that works equally as well in Manhattan and in Kansas."

The FCC has said that it will try to reach its decision on whether or not to dismantle the regulations by year-end, but that the process could stretch into the new year.

— Eugénie Larson, Reporter, Light Reading
www.lightreading.com
lastmile 12/4/2012 | 9:18:39 PM
re: Fed Reg Debate Heats Up Slowly but Surely the fraudband era will come to an end.
The Fed Reg concerns copper and any kind of decision will make no sense to the average consumer.
If the Fed decides to continue with the Telecom Act of 1996 then the fraudband era will continue for a limited time. If the Fed decides to de-regulate, then the Fraudband era will continue for a limited time. The fact remains that whatever the Fed decides the fraudband era has a limited life.
The average consumer knows Cable/DSL and has never had a taste of a true broadband connection because no such facility is available to the public. True broadband is feasible with a fiber node and a long range Wi Fi. Nothing is impossible and I am convinced that this will happen Slowly but Surely.
JMHO
rjmcmahon 12/4/2012 | 9:19:10 PM
re: Fed Reg Debate Heats Up Yeah, and shame on the company that passes more homes than any other - Comcast. When will it unbundle its network!
_____________________

The lesson here may be that two adversaries can find a common belief, though I don't see the RBOCs ever promoting and fighting for cable unbundling and open access.
rjmcmahon 12/4/2012 | 9:19:10 PM
re: Fed Reg Debate Heats Up How can you claim that the availability of cable-based services does not create competition? You have two facilities coming into the home that can provide similar service. Hence no monopoly. What justifies forcing competition on one wire coming into the house when there is a choice of another wire?
_________________________

Competition occurs when several suppliers offer the same services or goods. The facilities, and in this case the wires, has little to do with that. For example, a painter and a plumber both use the same type of facility, a truck, to reach a home. These does not mean they compete.

Cable and phone companies do not want to compete. They want to preserve their monopolies over voice and broadcast video. The feign competition so they can expand their monopoly and fool the government.

Your last question is a good one and worthy of honest debate. What justifies forcing common carrier over our public rights of ways? I'll suggest we erred by not requiring common carrier rules on cable monopolies. The phone companies now argue that two wrongs will somehow make a right. The wisdom on the bathroom wall says, "Two wrongs can never make right, but three rights can make a left."
grapsfan 12/4/2012 | 9:19:52 PM
re: Fed Reg Debate Heats Up lastmile wrote:

> I discussed about fraudband and some people insulted me.

If you mean me, I'm sorry. Didn't mean to directly insult anyone by asking questions. "Goofball" was probably a little out of line, but it's important to understand that this isn't a "well, just increase the size pipe to everyone's house, charge them $10 more, and everything will be great!" scenario.


> My aim was to discuss the reality of today's internet and to insist upon the fact that the average consumer would be willing to pay a few bucks extra for a broadband connection.


That is probably a true statement. But the bigger issue is that providing that on a wide-scale basis, to really get a 1.5 Mb/s or higher connection at everyone's house requires an increase in the access and core networks that nobody is going to pay for today. It's many billions of CapEx. What we get today, as you rightly say, is a promise of DSL that typically only provides 300-400 Kb/s of download speeds, much worse on regular old Web or E-mail.
dietaryfiber 12/4/2012 | 9:19:56 PM
re: Fed Reg Debate Heats Up Again, rj what the heck are you talking about....

Internet - Formed 1972
Ethernet - 1977 (no reason its here just for fun)
IBM PC - 1982
WWW - 1994
Internet Explosion -1996

I hate to point out to you that the PC and the Internet existed over a decade before the explosion which was WWW based.

Yeah, and shame on the company that passes more homes than any other - Comcast. When will it unbundle its network!

You guys are funny.

The RBOCs inherited the local connections from AT&T. Which as I recall, was a public company the whole time and got cost plus rate of returns. We could go back to cost plus. However, that will limit network innovation even further than it is now.

dietary fiber
Half-Inch Stud 12/4/2012 | 9:19:56 PM
re: Fed Reg Debate Heats Up yep, my CABLE-line goes to < 56Kbit/s in the evenings. 1.5Mbit/s in the mornings.

DSL was about 2x to 3x the dialup rate and constant across 24hours...aside from blackout times.

Dialup was boring.

Nope, I don't like the "products" enough to want paying for them to arrive at a faster rate.

Dare to state: the Internet is a Library, not an Arcade.

Half-Inch Stud
AisA 12/4/2012 | 9:20:01 PM
re: Fed Reg Debate Heats Up
rjmcmahon says:
"There will be no facilities based competition. This is pure deception by those attempting to monopolize our public rights of ways. Again, it's like Henry Ford claiming a small portable generator competes with Samuel Insull's electrical transmission lines. Or that a truck can compete with Kinder Morgan's pipelines."

----

How can you claim that the availability of cable-based services does not create competition? You have two facilities coming into the home that can provide similar service. Hence no monopoly. What justifies forcing competition on one wire coming into the house when there is a choice of another wire?
whyiswhy 12/4/2012 | 9:20:02 PM
re: Fed Reg Debate Heats Up Good God, I was hoping NOT to relive the Mac versus PC thing on this board! Wintel won...OK? :-)

My point was and is: Apple went around the (existing) networking problem with AppleTalk, which was a cheap local network. Many folks just used the outer two pairs of telephone wires to make networks all over campus/work, using existing wiring. It saved a lot of money and time.

That was in the face of a lot of existing coax networking for the DEC VAX's in our labs, and the IBM terminals in our offices. PCs/MACs were frozen out for the longest time by those same companies and our own IT groups trying to maintain their claim to computing/networking.

The network was private/corporate, and the Internet was a passing fancy for the geeks in the research labs; no reason to get bothered. Bandwidth was crap anyway.

Word >>>> Internet BW still is crap.

The similarities to the current situation should be obvious. That's why the Wintel group is going 802.11: they are going to use the same tactics (once used against them) against Ma Bell / Pa cable.

-Why
lastmile 12/4/2012 | 9:20:02 PM
re: Fed Reg Debate Heats Up I discussed about fraudband and some people insulted me.
My aim was to discuss the reality of today's internet and to insist upon the fact that the average consumer would be willing to pay a few bucks extra for a broadband connection.
Some continue to insist that broadband is available and that few are interested in broadband. But I continue to insist that today's broadband is actually fraudband because a cable/DSL connection is as good as a dial-up.
I also wrote about new a technology that would help the last mile problem at speeds far in excess of today's fraudband. I talked about Vivato and a similar technology. The NYT of today has some interesting news.
JMHO
rjmcmahon 12/4/2012 | 9:20:03 PM
re: Fed Reg Debate Heats Up Certainly not to turn it over to them lock stock and barrel as you propose! That crap about public right of way is just the government saying they get a cut of the action.

The best thing is to just work around the blockage (the government) and avoid economic constipation.
___________________

In the case of real broadband there is no avoiding using right of ways. This means some form of government has to be involved. (802.11x for the last mile is no solution.)

The proposal is to give ownership of our communications network to the consumers and the producers, as we have done with our roads. Maximize connectivity, support consumer choice, and allow anyone to produce and publish while constantly fighting to eliminate the gatekeepers. That is a free market.
rjmcmahon 12/4/2012 | 9:20:03 PM
re: Fed Reg Debate Heats Up I suppose you have not noticed that the Internet was around prior to the PC and originally connected together DEC VAX machines.

The WWW application on top of the Internet really started the explosion. This came much later and was best exploited using PCs.
______________

Almost, but not quite.

It was peoples' ability to afford personal computers (or information appliances) that seeded the creation. Each appliance acting on its own was close to useless (or about equal to that of a typewriter).

Add a ubiquitous network to those typewriters, and a bit of storage, and only then was the real value discovered. HTTP and data networks provided the conduits for that discovery.

People realized the true value of an information appliance is not the appliance as a tool, nor the poor ergonomic extensions of that tool (i.e. the applications), and not even the knowledge behind those poor ergonmic extensions. Rather the value comes from the interconnections themselves.

Shame on those who try to monopolize those interconnections. All their monopoly attempts can only reach for illusions. Monopolize our interconnetions and the value goes away. We all will have nothing but a dream lost.

Today the phone companies fool themselves into believing the value comes from a single application. (Remember, a browser is merely a simple application written by a college grad, not much more complex than Napster written by a teenager.) I think they do this because they are trying to rationalize their excessive speech tarrifs, though I am no therapist.

Worse, the telcos do no understand their own history. They have forgotten that those who built before them, from whom they inherited their role as caretakers of our Public Switched Telephone Network, knew the true value could only be perserved if principles such as common carrier were practiced and enforced. Unfortunately, today's caretakers trample all over such principles.
dietaryfiber 12/4/2012 | 9:20:05 PM
re: Fed Reg Debate Heats Up whyiswhy,

I suppose you have not noticed that the Internet was around prior to the PC and originally connected together DEC VAX machines.

The WWW application on top of the Internet really started the explosion. This came much later and was best exploited using PCs.

dietary fiber
whyiswhy 12/4/2012 | 9:20:09 PM
re: Fed Reg Debate Heats Up Certainly not to turn it over to them lock stock and barrel as you propose! That crap about public right of way is just the government saying they get a cut of the action.

The best thing is to just work around the blockage (the government) and avoid economic constipation.

802.11 and Bluetooth for the last mile, and hotspots. Like the PC revolution was in the early days...none of them were networked to the mainframe. IBM/Cray/DEC/Wang refused to play: if we had waited for them, it would never have happened.

Apple invented AppleTalk, and we users made the networks ourselves. Then the PC's played catch up, and finally got close with USB. Neighborhood networks grew up. Then we finally got real acccess to the mainframe, and networks between buildings, then the internet happened.

Broadband will be the same way.

-Why
rjmcmahon 12/4/2012 | 9:20:12 PM
re: Fed Reg Debate Heats Up The problem is the federal licensing of [public resources] will always go towards protection of [those in power], and the payback is the auctioning of the [public's] "rights of way". This will always result in incumbents [taking], and doing exactly what [corruption] does: choking off [progress] until they [receive] their money.
___________

I took the liberty to reword your statement describing the "nature of RBOCs" and some, albeit too many, of our government representatives.

State generated public power and many of our roads programs seem to have beaten that system of graft. What are the lessons from that?
whyiswhy 12/4/2012 | 9:20:14 PM
re: Fed Reg Debate Heats Up "Because of that huge constriction for remote applications via your internet connection, about all you could expect for intenet applications is exactly what we have: email, html browsing, instant messaging."

What? A long way of saying Chicken and Egg?

Well, the way out of the box is to think outside, then get outside: federal control that is.

The problem is the federal licensing of frequencies or resolution of UNE-P issues will always go towards protection of the incumbents, and the payback is the autioning of the "rights of way". This will always result in incumbents winning, and doing exactly what the government does: choking off the access to broadband until they see the money. It's human nature, it's real world politics. Accept it.

So they made a concession or a mistake: it is 802.11x and Bluetooth, and it is free and unlicensed (at least for now). INTC, MSFT, and IBM and embedding 802.11 and BT into their hardware. Camera makers already have products planned for early next year (too bad most will miss Xmas).

That's the eggs (802/BT), or the killer app if you prefer. It's not software.

-Why
lightcone 12/4/2012 | 9:20:16 PM
re: Fed Reg Debate Heats Up not that i read anyones posts..

reason for cable/dsl
-gaming
-mp3's

and it wasn't that long ago that music was to big to bother with downloading.

reason to regulate something

-not profitable to install in remote or poor areas.

when i worked for corning i remember ackerman writing collumn about wanting broadband or something regulated in the paper.

havent a clue but we should get them hooked while their young. just like the big tobacco.
grapsfan 12/4/2012 | 9:20:17 PM
re: Fed Reg Debate Heats Up lastmile, we talked about this before on the Article Talk about that Jeff Pulver goober...actually, you never responded to it, so you apparently missed my point. In good faith, we'll try this again.

I'm guessing from the tone of your mantra, that you're either Jonathan Thatcher or Bernard Daines, someone else who works for a company like WorldWide Packets, or just someone who drank that Kool-Aid. The proposition of expanding bandwidth to the home is more than just replacing the existing "broadband" applications (I agree that the term is a sham). You said it yourself...the existing loop doesn't provide full capability of bandwidth unless the usage rate is < 10%. The concentration ratios are designed for 4:1 voice access.

What you're missing is that the only ways to address the problem is to:

a) engineer a new incredible super-duper cool-as-hell encoding algorithm which lets you get huge bandwidth over a 64 Kb/s T0 to your house without affecting the bandwidth capability of the rest of the network
b) proportionally expand the rest of the bandwidth capbility of the rest of the network

I'll assume that "a" isn't going to be available for some time. We're left with "b", which means upgrading the entire network in proportion to the increase of bandwidth you want at your house. That means upgrading:

1) The loop (from T1 to T3 or above)
2) The access network (from T3/OC-3 to OC-12/48 or above)
3) The metro and IOF networks (from OC-48/192 to OC-768 & serious DWDM)
4) The data routers & servers (cause after all, I'm rarely getting a bandwidth glut at my house, I'm normally waiting for a server somewhere between espn.com and my computer)

You're talking about hundreds of billions of dollars in network upgrade. As someone who works for an equipment provider, I'd love to see it happen. As someone who wants to have 10/100 LAN performance at my house, I'd love to see it happen.

But the question you failed to address before, and will probably fail to address again, lastmile, is:

WHO PAYS FOR IT?



lastmile wrote:

When will the era of fraudband end?

Cable/DSL gives us no more than 1.5 MB/s and that too only when the user rate is < 10%. At times dial-up is far superior to cable/DSL. Many of my friends have given up cable/DSL and have reverted to dial-up because todays "killer app" works with a simple dial-up connection.

What the world needs to realize is that unless the average consumer gets a true broadband connection the IT industry will continue to live in this dismal state and will ultimately perish.

The Chicken and Egg dilemma will be solved only when a true broadband connection is available to the average consumer.
hemmingway1 12/4/2012 | 9:20:23 PM
re: Fed Reg Debate Heats Up lastmile commented: "The only way to end the era of fraudband is content. Some people call it a 'killer app' but I feel that an amalgamation of so many small day to day applications that are bandwidth hungry will load up the pipes and soon true broadband will be a part of our every day lives."
=============

The "killer app" mindset is a creature of vertical monopolies. That's what we have so that's how people think. When you have structural separation of content and connectivity, that mindset can change in the way you indicated.

As a "pure" content or application provider on a structurally separated network, you no longer have the economic constraints of recovering the huge infrastructure deployment costs by selling your applications. The vertically integrated model essentially requires only a very few applications and very high take rates, at low ongoing maintenance costs. It also discourages anything new, since it costs too much and takes to long to build up the scale.

When an application provider no longer has to worry about infrastructure expense or network operating costs in the local access network, it makes the case to try new apps much easier, and it also makes the initially low take rates of any new application introduction acceptable and economically feasible. Structural separation is an enabler for new applications, and for thousands of applications to persist, rather than just a few.

As far as bandwidth hungry apps, we already have thousands of them today. We just need to re-frame our perspective. The applications you run locally on your PC are "limited" by the disk-to-peripheral bus transfer rate, which is in the hundreds of megabits per second range for PC's that are less than a few years old.

When instead you go to a remote hard drive on a web server for your application, the transfer rate limit now becomes your network connection, i.e. hundreds of kilobits to a few megabits. Every one of those thousands of PC applications available today would be crippled beyond usability if local hard drive transfer rates were only megabits. It would take 24 hours just to load up and display the start-up screen.

Because of that huge constriction for remote applications via your internet connection, about all you could expect for intenet applications is exactly what we have: email, html browsing, instant messaging.

Applications are developed with platform limitations in mind. Developing applications that excced the capabilities of the target platform is not a particularly wise business proposition.

So, I really don't see that it takes a great deal of imagination to show that a hundred megabit connection has value for thousands of applications that would just have to be re-packaged for a "pay per view," rental, or subscription-based "bundle of applications" model. The vertical monopolies don't want this to happen because the application value moves to the endpoints, outside their central control and last mile tollgate role. If they were smart, there are ways they could capitalize on this model...but that would require.....CHANGE ON A GRAND SCALE.

Consequently, the promise of broadband will not ever be realized. Unless there are major structural changes. Or, a few large and visible municipalities that change ingrained mindsets about what a broadband network is supposed to be.
lastmile 12/4/2012 | 9:20:24 PM
re: Fed Reg Debate Heats Up RJC,
You said:
Time may heal wounds but it won't solve our fraudband problem. Another way to phrase your question is "What is required to end the era of fraudband?"
Even though I would like to see growth in the broadband industry, my assessment of the current situation is based on what I see and not on what the future projections are.
Two families close to where I live have changed from a high cost ISP to a low cost ISP and they continue with dial-up. Three of my other friends changed from cable broadband to dial-up because they said that the only advantage that the broadband connection gave them was an "always on" connection.
Once upon a time almost every family around me had a 2 line telephone, one for the home telephone and the other for the internet. What I notice now is that those who are giving up the broadband are not requesting for a second line for the internet. They are instead getting wireless and using the primary line for the home phone and the internet. They do not seem to care if their internet connection is interupted by an incoming call. After all they have the cell phone as a back up/substitute.
Fraudband that is available today is disliked by many around me because the dial-up is at par with fraudband.
The only way to end the era of fraudband is content. Some people call it a 'killer app' but I feel that an amalgamation of so many small day to day applications that are bandwidth hungry will load up the pipes and soon true broadband will be a part of our every day lives.
JMHO
rjmcmahon 12/4/2012 | 9:20:26 PM
re: Fed Reg Debate Heats Up When will the era of fraudband end?
______________

Time may heal wounds but it won't solve our fraudband problem. Another way to phrase your question is "What is required to end the era of fraudband?"
rjmcmahon 12/4/2012 | 9:20:26 PM
re: Fed Reg Debate Heats Up If long distance calls are such a bad business,
why are the RBOCs spending so much money to
expand their presence in the business?
______________

They are spending our money to make their graft payments in attempts to expand their local monopoly into the long distance data markets. That is their goal -- monopolize our data networks. Voice personel will be let go once their use as a political bargaining chip is no longer required.

Unfortunately, using RBOC staff as nothing more than a pawn in the game of "deregulation" is behavior that public opinion will never comprehend.
fw23 12/4/2012 | 9:20:28 PM
re: Fed Reg Debate Heats Up >All RBOCs have been losing money because of the >enactment of Telecom Act of 1996.It is very >extensive proposition for ILECs to unbundle >network elements.

Given that the CLECs are nearly all out of
business, how exactly did the act of 1996
force the RBOCs to lose money. Who are they
losing business to?

>One now can make long distance calls within the >US borders for less than 6 cents a minute. >Providing service at this rate is very difficult
>for all RBOCs.

For RBOCs, long distance is supposed to be a new
market which was opened up by the telcom act.
If long distance calls are such a bad business,
why are the RBOCs spending so much money to
expand their presence in the business?


rjmcmahon 12/4/2012 | 9:20:28 PM
re: Fed Reg Debate Heats Up Tpically each of the RBOCs have more than 60 thousand personnel. How can they survive on these ridiculous charges.
_______________________

RBOC staff can do more than survive but they will need to learn new skills.

And the attempts by RBOC leadership to stop technological advancement will eventually fail, though the current outcomes of 1996 Telco Act reveals they may be able to delay progress by a generation or two, unfortunately.

Maybe recalling a lesson from the textile industry will remind us that the destruction of the spinning jennies did not preserve any jobs, and that embracing technological advancement is the only way forward.

"James Hargreaves (1720? - April 22, 1778) was an English weaver and spinner (he spun wool thread using a spinning wheel). He invented the spinning jenny, a hand-powered multiple spinning machine.
The spinning jenny was much more efficient than the spinning wheel. With a spinning wheel, a person could produce only one yarn thread at a time. With Hargreaves' spinning jenny, a person could produce up to eight threads at once (it used one spinning wheel and 8 spindles on which threads were wound). The thread that the spinning jenny produced was coarse, and was only suited for filling material, but it was still quite a useful invention, and led the way to even better spinning devices.

Hargreaves is said to have gotten the idea for his remarkable invention after his young daughter (named Jenny) overturned his spinning wheel. When it was upturned, it continued to spin, and Hargreaves realized that many spinning wheels could be positioned like this, creating a multiple-wheeled spinning machine.

Hargreaves began selling spinning jenny's from his home, near Blackburn, Lancashire, England. After hearing of his invention, local spinners became fearful of losing their jobs and broke into Hargreaves' house, destroying his spinning jennies."
BobbyMax 12/4/2012 | 9:20:29 PM
re: Fed Reg Debate Heats Up All RBOCs have been losing money because of the enactment of Telecom Act of 1996.It is very extensive proposition for ILECs to unbundle network elements. The network elments were build after 3-4 decades of work. Typically these are over 56 nodes that participate in providing total service to customers. Besides these nodes were built by Bell Labs scientists afer a lot of very difficut and complicated research.

Both ILECS and IXCs have suffered a tremendous losses and now have very diminished capability to provide local and long distace service.

One now can make long distance calls within the US borders for less than 6 cents a minute. Providing service at this rate is very difficult for all RBOCs. Tpically each of the RBOCs have more than 60 thousand personnel. How can they survive on these ridiculous charges.

Long distance service is even worst. Anybody can now lease long distance long lines from AT&T or other IXCs for a very nominal price and charge double the they pay to IXCs. There are some momand pop type of carriers that p[ride services to China, INdia, UK, and Japan etc. at ridiculously low prices. The people who lease lines from IXCs should pay should share all the expenses that IXCs incur.

Finally I must mention that the Telecom Act of 1996 has done so much damage to the US economy that it should be scraped. This act has caused a lot of spurious companies to appear on the scene and very soon our service providers telephone infrastructure would be worst than those in the thirds world countries.
lastmile 12/4/2012 | 9:20:31 PM
re: Fed Reg Debate Heats Up When will the era of fraudband end?
Cable/DSL gives us no more than 1.5 MB/s and that too only when the user rate is < 10%. At times dial-up is far superior to cable/DSL.
Many of my friends have given up cable/DSL and have reverted to dial-up because todays "killer app" works with a simple dial-up connection.
What the world needs to realize is that unless the average consumer gets a true broadband connection the IT industry will continue to live in this dismal state and will ultimately perish.
The Chicken and Egg dilemma will be solved only when a true broadband connection is available to the average consumer.
The Egg is the killer application of tomorrow and the Chicken is the fraudband of today.
Will the FCC help us with a solution or do we need to go to KFC for help.
JMHO
rjmcmahon 12/4/2012 | 9:20:32 PM
re: Fed Reg Debate Heats Up But they are facing an onslaught of competition from cable, cable modem, cable telephony, cellular phones, and even satellite services.
______________

There will be no facilities based competition. This is pure deception by those attempting to monopolize our public rights of ways. Again, it's like Henry Ford claiming a small portable generator competes with Samuel Insull's electrical transmission lines. Or that a truck can compete with Kinder Morgan's pipelines.

The competition we must have will enable free speech. Unbundling is required for this to occur. Let the others go the way of the honda generator.
rjmcmahon 12/4/2012 | 9:20:32 PM
re: Fed Reg Debate Heats Up In practice, however, government monopolies usually seem to have been operated as "cash cows" for the government, and that's not a solution to the problem of high monopoly prices!
____________________

whyiswhy; I'd agree that public monopolies run by self interested bureaucrats is not efficient, that there could be situations where a private monopoly may be bettter, and the vast majority of of the time a competitive marketplace is preferred. (Unless of course one takes the perspective of a business owner who has little desire to constantly compete, wants zero bureaucrats "in the way", and would make the most from a monopoly position especially from controlling public resources.)

But first, it's nice to see we're getting to the understanding that last mile is a natural monopoly and that those promoting facilities based competition, including wireless, are merely trying to obfuscate that by feigning that competition exists. One suspects they do this in hopes of deceiving policy makers from addressing the truth.

The goal of competition is to supply the *entire* market as efficiently as possible. In the case of the natural monopoly, this goal is extremely difficult to achieve. This difficutly stems from the observations that human self interests seem to always to take priority over altruistic ones. And it's in the interest of those controlling a possession to maximize their return from any exchange. In the case of the monopoly, the purchaser has no choice but to pay the price set by he holding possession.

The monopolist quickly learns the best way to maximize his wealth is to serve only a portion of the market, i.e. the ones who pay the most. (It's not much different in our pseudeo democratic government where too many value their winning an election over the participation of the voting public. Look to fights over voter registration for an example of that.)

So the policy maker has a dilemma. Self interested bureaucrats with limited ability for innovation vs. self interested businessmen whose tendencies are to serve only a portion of the market.

Between these two evils, and especially for a communications infrastructure which is a foundational pier for democratic social contract, I choose the bureaucrat who attempts to serve the public good. When he stops in his attempts to serve the public good, the market participants can speak by voting him out office.

PS. Attempting to construct ones ego by belittling those that serve us coffee is not only poor conduct, it is destined to fail. Serving others may help you to understand. Give it a try. It really won't hurt, and if it does, go back to cluttering your mind with worrys about your tax payments.
whyiswhy 12/4/2012 | 9:20:37 PM
re: Fed Reg Debate Heats Up Same way they spent $2B last two years running...this is just a drop in the bucket. I am not sure I would want to be a shareholder. OTOH, I am glad they are buying!

PS: Income schmincome, that's for uncle sam...look at the cash...it keeps getting better.
Ramu3 12/4/2012 | 9:20:38 PM
re: Fed Reg Debate Heats Up re: ": Cox just announced a $500+ million investment in upgrading their coax infrastructure to support voice."
=======
How do you invest $500+ million when you have nearly $8 BILLION debt, $13.4 BILLION in total liabilities, only 600 million in cash, and NEGATIVE $560 million in net income for the past 4 quarters?

That would be like financing 2 new Lamborghini Murcielagos after buying a fully-furnished Beverly Hills mansion with zero down, owing bookies half a million, and working at a soup kitchen where you pay for all the food.
whyiswhy 12/4/2012 | 9:20:39 PM
re: Fed Reg Debate Heats Up Let me post it here, since you obviously did not even go to the link:

In practice, however, government monopolies usually seem to have been operated as "cash cows" for the government, and that's not a solution to the problem of high monopoly prices! It has been quite common around the world (for example) for public telephone monopolies to raise the price of telephone service to pay the deficit of the postal system. Poor telephone service at a high price is the predictable result.

RC,DW, I think the term "in practice" refers to historical evidence. There is no reason to believe that the government operates under any different motivation than private industry.

Quite the contrary: they are the biggest practitioners of monopoly control.

I presently pay over 50% of my money to the government, what with sales, income, social security, real estate, vehicle, gas, and luxury taxes, to say nothing of bridge tolls...to the feds, the state, the county, and the city.

Not one of my other bills (generated by private industry) compares within an order of magnitude. That means by a factor of ten.

The only rational person that would think that is a good deal is one who depends on my cash coming to them through taxes.

Get some energy, get an education, get a job in private industry, get off welfare, and get me a medium latte!

-Why
OSPGuy 12/4/2012 | 9:20:39 PM
re: Fed Reg Debate Heats Up Cable telephony: Cox just announced a $500+ million investment in upgrading their coax infrastructure to support voice.
At the end of Q2, 2002, 2.1 million lines of cable telephoney were in service.

Cable Modem: 2:1 advantage in market share over ADSL.

Cellular telephony: American cellphone usage has been growing by 67% per year for the past 5 years.

Vonage.com: 'nuff said.

POTS line growth has stopped, and may even be in decline, in the US for the first time since 1933.

So by what measure can anyone possibly make the claim that the RBOCs are a monopoly? That's like saying the Ford Motor Company has a monopoly on the Taurus automobile. Technically true, but meaningless.

So the RBOCs have the telephone lines. But they are facing an onslaught of competition from cable, cable modem, cable telephony, cellular phones, and even satellite services.
DarkWriting 12/4/2012 | 9:20:41 PM
re: Fed Reg Debate Heats Up RJM,

You are trying to convert the "Dumb Republicans" again. Like Reagan, they want it their way or the highway no matter what history says to them. They have enjoyed 200 years of a strong government keeping the playing field level but cannot see the forest for the trees. They actually think they are rich making 100K/yr. Give it up. (Got to hand it to them though, at least they are smarter than the "Dumb Democrats" and got off their asses and voted. Although now they take that as some sort of mandate???)

BTW, we did give the communications infrastructure to the private sector, Bernie Ebbers and Worldcom. Look what happened there. The free marketers cooked the books and dumped prices trying to run their competitors out of business. Short term result, low prices for consumers and fat paychecks for executives. Long term results, workers with their retirement gone and back to the same system as would have existed anyway.

DW
rjmcmahon 12/4/2012 | 9:20:42 PM
re: Fed Reg Debate Heats Up Try the following to see why trading CA for SBC would be no better.
__________________

CA representatives are elected by the public while SBC representatives are not. It's as simple as that. And one doesn't need a PhD in economics to understand that regulated public monopolies are preferred over private unregulated ones.

Imagine giving Skilling and Fastow the keys to our communications infrastructure. Wake up folks.
whyiswhy 12/4/2012 | 9:20:43 PM
re: Fed Reg Debate Heats Up Try the following to see why trading CA for SBC would be no better:

http://william-king.www.drexel...

The home link will give you a good review of basic economics, which you clearly need. Please read the entire site before you post again. I am sure you will greatly appreciate there is a lengthy section on Marxism, but you may not like the critique.

-Why
rjmcmahon 12/4/2012 | 9:20:44 PM
re: Fed Reg Debate Heats Up Powell has the future of this industry in his hands - to continue this sham "competition by expropriation" or recognize the reality of inter-modal competition - and you want him to retire to a hilltop somewhere and meditate on what the lobbysts didn't say?!
______________

Chairman Powell does not have our future in his hands. But he could serve the public interest better if he became part of the solution instead being part of the problem.

And I didn't ask him to retire to a hilltop and meditate. I suggested filling the 5th commissioners spot with somebody who could be objective and who didn't clutter 100% of their mind with a self serving agenda.

PS. Rights of ways are public resources. If the RBOCs want to be deregulated, make them pay every single property owner for use of their rights of ways. That's the expropriation we should be concerned with.
whyiswhy 12/4/2012 | 9:20:44 PM
re: Fed Reg Debate Heats Up RC's mantra is on you're Marx, get set...

:-)

=Why
rjmcmahon 12/4/2012 | 9:20:44 PM
re: Fed Reg Debate Heats Up Just a hunch but I bet RJ can recite the Communist Manifesto in his sleep......
_______________

Optigirl; I'll defend my position by borrowing the words from a great man from Nebraska, Senator George Norris (R):

"Some kind of monopoly is necessary to get the most out of [electricity]. If privately owned, it might be operated for a time by public-spirited men. But it is human nature to get the most it can out of such a situation. Eventually it would come to tyranny.... I've been called a Communist, a Socialist and some worse things. I'm nothing of the sort. I believe in our own government. I want to protect our people in the enjoyment of those God-given things that are intended for the use of all the people. If public ownership is the proper thing, I don't hesitate to accept it, whether you call it socialistic or not."

And if I'm a communist so must be every man and women living in Nebraska, using that public power. Not to mention anybody who drives their on our *free*ways.

What's really going on here is more akin to Henry Ford trying to monopolize the TVA's production.

http://www.tva.gov/heritage/ti...

Shame on us if we don't learn from history but rather instead give away all our productivity and place it in the hands of a few monopolists.

And don't be fooled to think you will get any portion of that ill gotten wealth. You will not.
optigirl 12/4/2012 | 9:20:45 PM
re: Fed Reg Debate Heats Up Just a hunch but I bet RJ can recite the Communist Manifesto in his sleep......

:=)))))
rjmcmahon 12/4/2012 | 9:20:46 PM
re: Fed Reg Debate Heats Up As long as we have access to satellite, wireless (GGG and 802), and wired (pair and coax) at the same time, and those media are owned by competing companies...we will be fine.

Technology and the market can sort out the rest.
_________________

This is incorrect. It would be like Henry Ford claiming as long as we have internal combustion engines we don't need to worry about private electric utilities and their monopolies.

And even Samuel Insull didn't try to hide the fact that the last mile was a natural monopoly while facilities based competition was a sham.

http://www.eei.org/public/hist...

The FCC, PUCs and local governments must affirm open access and common carrier if our communications networks are going to take advantage of the power of things like Metcalf's law. Not to mention freedom of speech and equal opportunities.

http://www.seas.upenn.edu/~gaj...

We inherited this great country from people who understood the public good trumps that of private monopoly interests. Let us stop trampling on their legacy and learn to behave in an honorable manner.

Powell, serve your country first and foremost, staff that 5th woman, and help to clear a path towards a progessive future.
whyiswhy 12/4/2012 | 9:20:53 PM
re: Fed Reg Debate Heats Up Go tell it to your local congressperson or senator: competition is the key, the last mile is the place.

'96 worked. What '96 did was to keep the RBOCs from sitting on their cash crop (voice) all the while not planting new rows (public data). Long distance is dirt cheap, and we have some DSL and some cable and some satellite and of course cellphones all over the place. The growth of cellular is a great example of how competition works.

What we need to prevent is modality or locality monopoly. As long as we have access to satellite, wireless (GGG and 802), and wired (pair and coax) at the same time, and those media are owned by competing companies...we will be fine. The FCC and the SEC need to cooperate to make this happen.

Technology and the market can sort out the rest.

-Why
OSPGuy 12/4/2012 | 9:20:54 PM
re: Fed Reg Debate Heats Up rjmcmahon wrote:

"Bring in somebody who understands the importnace of the null curriculum and who also understands that what is not said is as important as that that is."

Hmmm, can there be any doubt that our societies' investment in higher education is netting lower and lower returns?

Powell has the future of this industry in his hands - to continue this sham "competition by expropriation" or recognize the reality of inter-modal competition - and you want him to retire to a hilltop somewhere and meditate on what the lobbysts didn't say?! How about good old fashioned research and analysis, doesn't anyone do that anymore?

You'd be an embarrassment to our university system if you weren't so typical.
rjmcmahon 12/4/2012 | 9:20:54 PM
re: Fed Reg Debate Heats Up FCC Powell would best serve the public interest by asking congress to staff that fifth commissioner. Bring in somebody who understands the importnace of the null curriculum and who also understands that what is not said is as important as that that is.

"The null curriculum - That which we do not teach, thus giving students the message that these elements are not important in their educational experiences or in our society. Eisner offers some major points as he concludes his discussion of the null curriculum.

The major point I have been trying to make thus far is that schools have consequences not only by virtue of what they do not teach, but also by virtue of what they neglect to teach. What students cannot consider, what they don't processes they are unable to use, have consequences for the kinds of lives they lead."

http://www.uwsp.edu/education/...
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