Feature: The Broadband Wars 295
byDonald Weightman,
attorney-at law,
Washington, DC, USA
The broadband wars, which are being fought right now, will determine whether, when, and on what conditions you will be able to reach broadband applications on the Internet for years to come; things like gaming, large downloads, and streaming media. If you have a multimedia or data-rich Web site, the broadband wars will decide which audiences you can reach, and whether you have to strike deals with intermediaries to reach them. If you are an ISP these battles will likely decide whether you can offer broadband services. If you work in the Internet economy, the battle is about how to break through the "last mile" bandwidth bottleneck, and sustain the Net's growth.
Put it this way: being able to choose your broadband ISP is just as important as being able to choose the operating system for your computer. If you lose that choice, and your ISP is bundled with the cable modem, you lose control over what you can and can't do with the Net, just as having no choice of OS means losing control over what you can and can't do with the box.
The players in the broadband wars are looking for a mix of legislation and regulations which will give them an advantage in the race to control that delivery point.
One camp consists of AOL, some other ISPs, consumer groups, and a few state and local political leaders. Their battle cry is "open access." They claim that just as you can choose your ISP for 28 and 56K dial-up, you should be able to choose your ISP for cable modem or any other high-speed Net access service. AOL has emphasized lobbying and grassroots organizing and spent hundreds of thousands of dollars on campaign contributions during the 1997 - 1998 election. Election records suggest that it has stepped up the flow of money to lawmakers since then.
AOL is the major force behind the Open Net Coalition headed by well- connected lobbyists Greg Simon and Rich Bond. (After a heavy telemarketing campaign directed at ISPs, the coalition announced recently that since the Portland decision against AT&T, its membership has doubled.) AOL wants new legislation requiring ISP choice, no matter who owns the pipe through the last mile, and supports a bill sponsored by home-state Virginia legislators Rich Boucher and Robert Goodlatte that would do just that.
AOL and its allies argue that the Internet has succeeded as an open platform, while cable, including Internet cable, has always been a closed system. They say that innovations like browsers, eBay, and Yahoo would not have been feasible if they had to negotiate entry through a monopoly bottleneck.
AOL and company add that competition, which has served the Net well, should be sustained in broadband. After all, there are now 40 million American Net users in part because AOL saturated the country with floppy discs, and because local ISPs competed with each other to walk new users through the set-up process. The open access camp adds that the additional sales channels like AOL and the independent ISPs may kick-start broadband deployment.
Charles Brewer of MindSpring thinks that Net access is the core telecom service of the future. He claims that access will have three critical features: consumer-friendly price, 'always on' two-way connectivity, and true broadband throughput. Wireless NET will fail to meet at least one of these criteria for foreseeable future; therefore broadband equals wireline. A competitive broadband wireline market requires open access. Brewer concludes that non-discrimination requirements presently imposed on telephone service should apply to two-way cable Net access as "telecommunications service."
You will also see this group says a lot about consumer choice. Sometimes they will add another dig at cable video, where consumers have lacked choices. Cable operators have long been charged with price gouging and anticompetitive conduct. The open access camp concludes that the risk of such problems in broadband should not be ignored with a "wait and see" approach.
The other camp is headed by cable TV industry giant AT&T, which kicked out $3 million in Congressional campaign funding in 1997 - 1998. It has former FCC Commissioner Reed Hundt as part of its lobbying team. It uses lawsuits like the one At&T filed against Portland, Oregon when that city mandated open access, and it is the major force behind Hands Off the Net.
The cable industry claims that investment in system upgrades needed to bring near-universal cable modem access will come only if it can guarantee returns under a business model with assured users and proprietary content. The cable industry argues that with only 600,000 broadband users, it cannot be said to dominate a market with 40 million American Internet users. Sometimes their publicity tries to demonize AOL, pointing out that any company with 17 million customers shouldn't be allowed to say that it is being bullied. After all, they say, if AOL wants broadband access, why doesn't it just buy some?
The cable industry also says that open access regulation is not necessary because competing technologies, including DSL over telephone lines, wireless transmission, and satellite delivery will provide consumer choices. Somewhere in here you will also hear and read a lot of anti-government rhetoric. There is also a technical argument: the cable modem platform envisions a sort of neighborhood area network, where introducing multiple ISPs would create serious coordination and service problems.
The regional phone companies, eager to put a stick into AT&T's spokes and slow down cable's Internet momentum, rely on former Senators Bob Packwood, Larry Pressler, and and Bennett Johnson, and have hired ex-White House spokesman Mike McCurry to lead iAdvance. They claim that deregulating them will give them competitive parity with the cable companies, and that deregulation will allow them to reach under-served farm country and other communities with high-speed access using DSL technologies. (Reaching the under-served communities where there is little Net use, an issue known as the "Digital Divide," is a current political hot button.)
The telcos are pushing legislation proposed by Senate Commerce Committee Chairman (and Presidential candidate) John McCain, and Representatives John Dingell and Billy Tauzin. The telephone industry spent $14.2 million during the last election cycle. Some key lawmakers have received hundreds of thousands of dollars each in campaign money from the telcos over the last five years.
There is another, much smaller player on the scene, one with a slightly different take. Startup broadband ISP Internet Ventures has a cable-down telco-return platform, and wants to use Section 612 of the cable statute to argue that Internet video is "video programming" under that provision, which requires cable companies to lease channels to their competitors.
I represent Internet Ventures, and I have been lobbying for it. It has made no campaign contributions, and rather than seeking new legislation, has filed with the FCC for a ruling under that, under present law, ISPs have the right to lease access from the cable companies.
Internet Ventures' main argument is that this platform can be deployed quickly using today's infrastructure. The balance of its arguments parallel those used by the open access camp, with a different take on the digital divide. Internet Ventures claims that leased access gives consumers more choices, will promote broadband competition, and also help break the last mile bottleneck. The part on the "Digital Divide" is that leased access can be delivered to under-served communities now, at a price comparable to or lower than that charged by other Internet access and cable television service providers.
The cable operators respond that this is stretching the "leased access" provision too far, that they are doing a fine job, and that leased access for ISPs will hurt demand for and investment in upgrading cable systems for high speed interactivity.
The broadband wars started with the Telecommunications Act of 1996, which said that the local telephone companies would be allowed to offer long distance, but only on condition that they open their home markets to competition. None of the local phone monopolies has done so, and many of them have used their lawyers to delay the competitive process by litigating every regulatory issue whenever and wherever possible.
Closed out of local telecom markets, and worried about the long-range viability of stand- alone long-distance service, AT&T has gone on a $120 billion shopping spree, acquiring cable companies TCI and MediaOne. These acquisitions gave it practical control over cable ISP @Home (now Excite@Home), and a minority stake (with media conglomerate TimeWarner and others) in the other major cable ISP, RoadRunner. The business model calls for a closed platform, with preferred space (on viewers' screen and cached on local servers) given to paid advertisers and proprietary content. The closed platform would eventually deliver television, telephone, interactive video as well as broadband Net.
The outcome of the mergers is that AT&T, which claims 80 million customers worldwide, has now added from 20 to 40 million cable customers, depending how you count. Even before gearing up the marketing drive that goes with delivery of Internet interactivity, cable has a base of 67 million broadband (video) customers, which makes this group (cable plus AT&T's long distance customers), with a customer base in nine figures, nearly equal in size to all U.S. local telephone companies combined.
The telcos have about 150 million telephone lines to work from. Pursuing an objective of unifying local, long-distance, wireless, and, belatedly, Internet through a single provider for every customer, the Bell companies did not seriously try to deploy their broadband DSL technology until the threat of cable modems kicked them into action. And DSL has some handicaps. It cannot serve users who are more than three miles or so from the nearest company office, and it cannot be offered over some phone lines at all. As many as a third of American homes may never be able to get DSL.
Cable, too, has its problems. As the number of users on a neighborhood node increases, congestion soon follows. In fact, Excite@Home has had to impose a 128 Kbps limit on uploads because of heavier home-user traffic than expected. Add to this the still-unresolved security problems which make cable Internet unattractive for business, and the picture resolves to technologies which are still developing.
The other thing to keep in mind about the 1996 statute is what it didn't do: address where we are now, when many players from different industries all seek to offer some mix of broadband Net, telephone and television, but on different technological platforms. Aside from some language which has given the lawyers room to maneuver in their arguments, a critical piece left out was the status of Internet delivered over cable. This has meant that the FCC is left to deal with the relevant policy questions without much of a lead from Congress. The resulting vacuum is a major reason for all the lobbying now going on.
Another factor which kept broadband in the background until last year is that, as long-time computer industry observer John Dvorak points out,
The AT&T merger with TCI, which gave Internet-over-cable's closed business model its prominence, helped bring broadband issues to the front of the stage. AT&T had to pass regulatory muster with the Justice Department and the FCC in Washington. It also had to get permission from the hundreds of cities and other local governments which had granted local franchises to TCI. Last December, the Portland, Oregon City Council required, as a condition of the merger, that AT&T open its broadband network to competitors."Neither the phone company nor the cable company is used to the pace of the computer industry. Worse, they have no interest in getting used to the pace."
In the meantime, AOL, thwarted in talks with cable operators, formed the OpenNet Coalition and lobbied hard to push open access to the top of the FCC's regulatory agenda, both in the agency's review of the AT&T/TCI deal, and in a separate proceeding on "advanced" (i.e. broadband) services. After fierce resistance from AT&T, the effort failed on both fronts, and the FCC decided, for the time being, to take a hands-off approach to cable access. The FCC tried to justify this refusal to act by finding that AT&T and cable broadband delivery generally were not in a position to dominate the markets for these advanced services. It indicated, however, that it might revisit the issue if it looks like cable is gaining a monopoly position.
One result of the FCC's "hands-off-cable" decision was that AT&T and other cable stock prices spiked on the assumption that they would be able to get turbo-charged returns on their closed systems and captive eyeballs. This spike gave the companies a lot of new market capitalization to play with. Instead of using the inflow to fund the $30 billion needed to upgrade the cable infrastructure for full two-way high-speed connectivity, the industry spent the new money on another wave of mergers, including the recent AT&T acquisition of MediaOne and some other, smaller deals. If the consolidations are approved, AT&T will own access to about 30% of the cable subscriber base, with a partial interest in systems reaching another 30%. This threat to control broadband has prompted the telephone company counterattack.
But the monopolists don't always win. In early June, a federal judge ruled that Portland was within its rights in imposing the open access requirement. AT&T has appealed, but this ruling has encouraged other local governments to reopen similar cases. Last week, Canadian cable regulators issued rules requiring cable companies there to open their networks to independent ISPs. And earlier this week, Broward County, Florida voted to require AT&T to open its system to competing ISPs.
But these are just a few battles. The war continues -- in the courts, in Congress, in State Legislatures, in front of local cable TV regulators, and most importantly, at the FCC.
If you think the open access issue is important, then you should know that the best way to get the FCC off the dime is a show of genuine popular support. And if you want to help, here are some places to start:
www.nogatekeepers.org
www.opennetcoalition.org
www.ivn.net/strat/access.html
www.handsofftheinternet.org
www.iadvance.org
Re:Regulation isn't the solution. (Score:1)
1) easy to write a coherent business plan
2) reduced difficulty in raising $$$ (investors/lenders love monopolies)
3) assistance in getting right of way over
public and private land
4) most importantly--you get a captive
customer base
Quite simply: it's a pretty much no-lose proposition. Taking it a step further, I would be willing to bet $$$ to donuts that they _wouldn't_ have made these huge investments without a government granted monopoly.
I would agree with you if the cable companies had never been granted monopolies, but since they were they must play by a different set of rules.
--Brad
Re:Now wait one second here.. (Score:1)
The only fair system is to lock the bandwidth-providers OUT of the market for content. You don't get phone-sex for free with your local line charges, and it is grossly unfair to make people who don't want phone-sex to pay for it just to have a phone. It is just as grossly unfair to force people who don't want the cableCo's "content" to pay for it just to get bandwidth. Bandwidth and content should be sold separately; any ISP can put dial-ins on the telephone network, and any ISP should have equal access to the bandwidth on the cable network.
Cable, Telco, It's all IP based! (Score:1)
If AT&T, Sprint, and MCI are all converting their backbones to IP, and moving to a Voice over IP structure, then why can't the Bells do the same with the last mile?
Because they have too many existing broadband services out there that they can get too much profit from (T1s, T3s, ISDN, etc). There is no monetary incentive to deploy any real broadband solutions, because people have no choice. What do you think would happen if the Bells let Residential customers get cheap broadband, and continued to charge other businesses the same huge monthy rates they do now?
We now have the cable companies in the mix as well. With AT&T buying up all these guys, do you really think that AT&T (a traditional phone company) cares about video? Not really. It's the Media companies who are trying to convert the Net into something they can understand: push technologies with paid advertising. These two forces are fighting their own battle, generally out of the public eye. However, AT&T is looking to use the cable Internet plant to deliver other things: like their own brand of local phone service, so that they can get a bigger share of the profits that CLECs have.
Bottom line here is that everyone in the mix has a different agenda, and lots of money flowing to the lawyers to try to keep making the most money with the lease effort in infrastructure.
The best thing to do is to get the CLECs and cable plants to compete on the same basis: IP routing services. If everything was IP based (like voice is moving to), then all the physical plants would require is a broadband IP routing structure that charges a fee based on actual usage and top bandwith requirements. This is close to the "pay-as-you-go" internet mentioned by a rather prominent Net Pundit.
this plan would solve a lot of the issues that are being fought over today, but it's not likely that it will come to any kind of fruition because it would force all parties involved to abandon their "easy-profit" pasts, and concentrate on forming a single infrastructure shared by everyone.
fuck, what is this? (Score:2)
It's control of content, stupid (Score:2)
We should be talking more about open access for individual users (like most of us) rather than open access for ISPs and AOL. Yes, we need to close the Digital Divide and improve broadband services, but not at the cost of individual, internet liberty. The freedom we now enjoy on the Net is already being erroded by the telcos, cablecos (which is which?) and FCC special interest ineptness. When do we stop being multimedia sheep?
An IP address is an IP address (Score:1)
What I'd expect (or perhaps what I'd like) to happen is in the future, is a regulated service in which all a being gets is access and a routable IP address, and the creation of a market for value-added services, like web hosting, email, usenet, and AOL.
Regulation is unavoidable (Score:2)
So think of the current situation not as free enterprise, because it's not. It's government created monopolies on local broadband internet access. This is regulation. If the government decides to do nothing else, it's still regulating the industry.
I'm undecided as to which side of the issue I'm on. The only sane solutions still keep the cable companies in charge of bandwidth, so if third parties are allowed to lease access to broadband customers, they will still be at the mercy of the cable companies. This isn't necessarily better than the current situation, particularly when you add the extra administrative and infrastructure costs of such a solution.
Re:A Ridiculous Post (Score:1)
Those of you who support the monopolists have a right to your opinion, but if the monopolists manage to take control of your 'net access, you'd better keep on taking their side, because open debates like this one will stop.
I encourage competition and free speech. If you disagree with my opinion, that's fine. You and Bill Gates now have something in common.
Re:Regulation isn't the solution. (Score:2)
A Ridiculous Post (Score:1)
Re:A Ridiculous Post (Score:2)
Re:Laying New Cable (Score:2)
Bzzzt - Try Again (Score:2)
2). AOL could get a competitive cable franchise and lay their own cable. The days of monopoly cable franchises is on the way out.
3). AOL could actually invest in AT&T's cable venture and actually risk a little of their own money. If AOL agreed to help finance this network, I'd guess AT&T would be happy to give them spectrum space.
You are So Right (Score:2)
Re:Bzzzt - Try Again (Score:2)
Re:A Ridiculous Post (Score:2)
Re:ISPs are an anachronism (Score:2)
b) How does the enduser get support? There's lots of places to get support. Your local computer store, for example, is happy to provide support (for a price!).
c) how do I handle routes and stuff? Well, you're right -- your Internet service provider has to provide you with your gateway and IP address. See UUNET for an example of how this works in practice (UUNET does provide some services, but you have to run or find your own EMAIL etc. providers).
All in all, though, I don't have much sympathy for those who would regulate cable Internet access. I'm posting this via my cable modem, and I never even SEE that @home site, use their EMAIL server, or use their news server. If they did not have that revenue from their home page, they'd have to hike my rates -- or else I'd have to pay two bills (one for my cable network, one for my ISP) that would add up to more than my current bill. Dollars and cents -- cable companies are in business to make money, and if they make less from one source, they have to raise rates on the network service to compensate.
One last thing: These cable companies are NOT computer geniuses. My cable modem is provided by @Home, and is run by people who don't know much about what they're doing. Asking them to add even more complexity to a network they don't fully understand in the first place is NOT going to help the quality of my cable network service.
-E
Re:If there's no monopoly, there's no case (Score:1)
In my state cable co's have exclusive domain over individual municipalities. I have Adelphia, two miles south or nortn of me people have TCI. You get no choice.
If your cable co doesn't offer broadband (like mine does not) you should be able to get it from someone else who does (like TCI two miles south east of me).
Maybe I'm selfish, but that's my take. In other states where you can choose freely they spent the to deploy broadband nearly two years ago.
LK
Re:ISPs are an anachronism (Score:1)
>But, in the next few years, IPv6 is expected to take off, providing enough IP addresses for every man, woman and child to have several dozen. (I'm not sure of the exact ratio, but it's big.) In that case, there's no reason to borrow IP addresses at all, and the only remaining reason for ISPs to exist goes away.
A few points...
1. Dynamic IPs give us limited protection from DOS attacks. If that asshole OP on #whatever always has the same IP I can nuke the crap out of him every time I feel like it.
2. ISPs have news servers. I changed ISPs because of news server volume. My current ISP has the largest volume news server in my state.
3. ISPs provide tech support for idiots. AOL would have been out of business 3 years ago when there was unlimited dialup for $20/mo if it were not for the idiots who NEED their service to be able to access the internet. There will always be idiots and either ISPs or consultants will be needed to care for them.
LK
AOL is irrelevant (Score:1)
The argument here is not whether AOL will be able to compete. If AOL's group loses, AOL will be able to find SOME way to profit from broadband, whether it be laying its own lines, or (I think) paying an existing cable company to offer AOL services, which I think could be profitable for both companies given AOL's marketing. They just don't WANT to pay.
On the other hand, we don't see the names of other ISP's in AOL's coalition. Why? Because they are small companies. They can't afford to lay enough lines to offer their own service, and they can't afford to work with multi-billion dollar cable companies (and small cable companies are hard to come by these days). So they will be squeezed out as broadband replaces modem.
A defeat of AOL's coalition will result in an oligopoly (is that a real word?) of cable internet service, between the cable companies and a weaker but still large AOL.
Yuck.
Re:If there's no monopoly, there's no case (Score:1)
What I'm saying is that either should be allowed. That they should either be allowed to put the cables in place OR lease access to the lines from Adelphia.
What's wierd is that over two years ago Time Warner Cable whou bought out Cablevision put fiber optics in the area. We have cable that will and does support two way transmissions. I can order pay per view eventsfrom the box withouth using a phone line. It's because they're only spending the time putting cable modems in areas where rich and influential politicians live that I don't have one.
LK
Re:If there's no monopoly, there's no case (Score:1)
What I'm saying is that either should be allowed. That they should either be allowed to put the cables in place OR lease access to the lines from Adelphia.
What's wierd is that over two years ago Time Warner Cable who bought out Cablevision put fiber optics in the area. We have cable that will and does support two way transmissions. I can order pay per view eventsfrom the box withouth using a phone line. It's because they're only spending the time putting cable modems in areas where rich and influential politicians live that I don't have one.
LK
Re:If there's no monopoly, there's no case (Score:1)
>I have to give you this, you have a slight point.. But the catch is that other companies also have access to that property, just like the cable company does..
Actually in my state you'd be incorrect. The cable companies come to agreements with municipalities to establish exclusive rights to sell their service within it.
TCI is NOT ALLOWED to sell their services to me because I don't live two miles south east of where I currently live.
Adelphia has chosen not to offer broadband internet access where I live in order to persue the more affluent communities to to the north of Pittsburgh.
This is screwed up. I should have had broadband TWO YEARS AGO. Time Warner put the fiber optics in place then because they were planning to do it but Adelphia bought them out and is stalling.
LK
Re:Open Access is for winers (Score:1)
Why should a company have to let others use the network it paid for? Because years of government-granted monopoly have allowed said companies to lay the wire...Because it is inefficient and wasteful to rebuild a huge infrastructure over and over again just to allow market economics to take place...Because the idea of profiting from the *wire* is as silly and anachronistic as toll roads are today.
We may bitch and moan that current open-access resources (like roads) are poorly maintained and managed, but almost all of us would prefer to hop in our cars and drive from A to B over having to pay a new toll/tax/maintenance fee every time we make a turn, and to get out of our cars and hike whenever we leave a particular Road Service Area.
The wire should be a commodity today. No more reaping huge profits while ignoring the consumer, as every utility monopoly has done for years. These huge companies should still have to earn their profits, rather than resting on the laurels of a decades-old accomplishment. Deregulating the network would shift these jerks' attentions to customer service and support, which is where it belongs anyway.
I don't feel sorry for the wire-owners at all. It isn't like they wouldn't be compensated for their lines--the poor babies would just have to compete in an open market for once.
Re:98% ? (Score:1)
I forget how far I live from the CO, but it isn't that far. The problem is that my phone lines were installed in the 80s. Everything is multiplexed out the wazoo. All those A-D conversions mean that I cannot connect my POTS modem faster than 26k and xDSL is out of the question. If you will, the wiring is too advanced for xDSL. I'd love to have a vintage 50s pure copper line into the CO.
I think that this whole thing is a bit more complicated that you imagine. I wish that you were right, but that isn't the case.
Re:Regulation isn't the solution. (Score:1)
Perhaps that could be part of the solution. Take the existing networks away from the monopolies. Give them the same access to them as everybody else.
Re:Busting monopolies is GOOD regulation (Score:1)
P.S. I would like to choose ISPs to connect to via my cable. But I don't think it is right (in general) for me (or us collectively) to use the government to force companies (or people) to do what I (we) want.
Those companies wouldn't have the power and control that they have now if OUR GOVERNMENT hadn't given it to them on a silver platter. The government put them in the position where they could afford to build the massive networks. If they hadn't been guaranteed a monopoly for a period of time, they never would have been able to build those networks. Don't think that these guys are just brilliant entrepreneurs that built their companies and networks from scratch. They had a lot of help from the government and we the taxpayers. I think they've had their free ride and now it's time to do what's in the best interests of the consumer.
Wrong... (Score:1)
In addition to the other reply to your post, I would like to add that you are utterly incorrect about 98% of the population being within reach of ADSL. You must be within approx. 3 miles of a switch to get ADSL service. Let me quote from the phone company's DSL FAQ:
"Are there restrictions to getting Southwestern Bell DSL service?
Yes, due to restrictions of the currently available technology, customers must live within about 17,500 feet of their central telephone switching office, and their telephone line must be qualified to carry the DSL signal. Not all customers serviced by DSL-equipped central offices will qualify for DSL service. In addition, host networks must be connected to Southwestern Bell's Fast Packet Network service to ensure quality and throughput of Southwestern Bell DSL connections.
My entire neighborhood doesn't get ADSL because of this. Neither do a couple other neighborhoods nearby. It's not poor lines. It's distance. It could be fixed, but just try to get the phone company to do it. They aren't gonna do it if nobody makes them do it. I call and they tell me that I cannot get ADSL. I ask when I will be able to get it. They say they don't know. That leads me to believe they don't have any plans to fix my problem anytime soon. My local cable company has not offered cable modems in my area yet either. They have been telling me that they will be out in a couple months for a year and a half.WHAT RISK?! (Score:1)
The companies that own the lines NEVER TOOK ANY RISK! They were given a monopoly by the government. Plain and simple. It's time for their free ride to end and for the government to make sure that they do what's best for the consumers. The same people who paid the taxes to the goverment that gave them their monopoly in the first place.
Re:If there's no monopoly, there's no case (Score:1)
They don't burrow through my yard to give me choices in the supermarket.
Sounds groovy... (Score:1)
How is that going to happen without government intervention? They made the mess with legislation... it'll take more legislation to alter (hopefully for the better) the mess.
Unrestricted access to consumers? OK. That won't happen unless the cable/phone companies have to offer their lines at a competitive price to other access providers. How do you propose to get them to do that?
Then, we would also have to do something about the government passing out monopolies like they were candy. I would hope that they've learned their lesson, but I doubt it.
Some things are good for everyone, but require enormous capital to get started. Do you think 5 separate companies could raise that kind of capital without some kind of guarantee of a decent return? Prolly not.
I think that the government should sponsor certain projects and declare them to be public property and regulate them as such. Anyone can use them, but they must not prevent others from using them as well. There would probably be other terms to such a deal as well... I don't plan to attempt to think the whole thing out right now though.
Re:Oligarchies? Hey! OPEC is not a monopoly, right (Score:1)
Actually it makes a lot of sense. Those companies can't afford to not offer Windows. There is a very big demand for it. That shouldn't mean that they should suffer the loss of their Windows customers just because they want to searve customers who want Linux as well.
Unfortunately that's exactly what happens. Microsoft has threatened Compaq this way. I believe they threatened Gateway as well. Those are just the ones we know about. It's quite likely that it is (or was, at least before the DOJ lawsuit) a standing threat to all OEMs. Of course, they've used the licensing price as a club as well, so you're correct about that.
Re:Your attitude won't win any competition. (Score:1)
So? I don't see you even bothering to look for it. If there does happen to be an anomoly or two, that still doesn't change things for the rest of the country and it doesn't make your argument any stronger. Who knows what will happen to the competing company in a year or two. Maybe they won't be able to recoup the initial investment and will end up bankrupt.
Re:Your attitude won't win any competition. (Score:1)
You still don't get it. These companies never took any risk. They got it all laid out for them by the government and have been making fat profits for years and years. It's time for their free ride to end. Just as with the Bells and the electric utilities, the grid should be made available for competion to provide service. Why should new companies have to make the investment in running new lines without the same guarantees and priviledges that the government gave to the existing companies?
Re:Your attitude won't win any competition. (Score:1)
My point wasn't that they should get subsidies too. My point was that it was a bad idea in the first place and that the government should be doing something to bring competition back in a way that it actually has a chance. They deregulate cable. Are there any new companies in my area? Nope. Are there any moving into any other areas? Extremely few. Simple deregulation doesn't work. Those networks that the government helped them build should be open to all for competition. If the existing company provides the best service and prices, then fine, customers will stay with them. If not, then at least the customer can choose another company.
Re:Your attitude won't win any competition. (Score:1)
I won't be convinced by sketchy claims that don't do much to support your argument anyway. So what if a couple areas out of the entire company have a competing company trying to do some business? Overall, the deregulation has failed since the incumbent companies don't have to let the new companies in unless the local government makes them. So, in the end, it comes down to government intervention. They created the problem and they have an obligation to fix it.
Re:Regulation isn't the solution. (Score:1)
How do you think they got rich in the first place? Because the government gave them all kinds of breaks and exclusive privileges. That ended up screwing consumers in the long run since there was no competition and rates just keep going up. Now the government has every right and even the obligation to do what's necessary to fix the problem. That means opening things up for competition without giving the incumbents leverage over the newcomers. They're gonna have a hard enough time as it is. Technical issues are another matter. That's something for the experts to deal with. I don't know how they will do it, I just know that without competition, consumers will continue to get screwed by the cable companies.
Re:Wrong... (Score:1)
That's the problem. I don't have a clue when/if I will be able to get any kind of broadband service whatsoever. Being over 33,000 feet from the central office, I don't have a prayer of getting DSL anytime soon. One of the reps said that they were going to be getting "new DSL services" that might help me out somehow. I don't know what these services are or if they will be viable considering my distance. Even if they are, when I asked the rep when they would be available, she said "there's a chance they'll be available by the end of the year.. but don't quote me on that." Hmm... optimism abounds. Realistically, if the past is any indication, it will be at least a year before they get these services out anywhere near me. Whether they are useable for me is another question altogether. They haven't even checked my line quality yet.
Look at the railroad industry (Score:1)
If your logic was applied to the railroad industry, all of these people would have to build seperate sets of tracks. If this were the case, the costs of starting a new business would be so prohibitive that we wouldn't have Amtrak or the local commuter rail.
Re:You're an idiot. This is an outstanding article (Score:1)
Re:If there's no monopoly, there's no case (Score:2)
The cable companies SHOULD be required to lease their lines to others. Supposedly, that's part of the price for getting a government granted monopoly (They don't provide public access channels out of kindness, I assure you). Otherwise, we all get to have 5 poles in our front yards to hold all of the lines.
In return, the cable companies are entitled to fair compensation for their bandwidth. After all, the Bells have to do it.
Two companies who collectivly have a monopoly on right of way can be just as bad as a single company. It's not necessarily collusion, just two companies who are used to having a monopoly, and want to keep it that way.
Re:Regulation isn't the solution. (Score:2)
AOL could stride in and lay fiber fairly easily..
And mindspring and uunet and nortel, and earthlink...
How many times do you want your front yard dug up?
Lines on poles aren't much better. MediaOne managed to knock the power out twice last week stringing up their cable. The last thing we would need is to give five more providers a crack at it. That's not even considering that we'd need new poles to hold it all. BTW, MediaOne got to take advantage of the Poles Ga. Power paid to put in the ground. Should they have been forced to install their own poles? Bell uses those poles as well. Perhaps we need three sets of poles. Furthermore, Mindspring didn't pay to install the phone system, why don't they just install their own (with poles) instead of leeching off of MaBell?
The reason is that nobody wants 20 poles in their yard, and the economy can't support the waste of 20 seperate communications grids.
I'm not saying the cable companies aren't entitled to compensation for their expenses, just that they are not entitled to have an exclusive arrangement and a ten year head start.
Re:The cost of material (Score:2)
In that case, I was definatly underestimating the laying cost. With revised figures (retail cost of materials multiplied by 10), I get $300 per customer to lay brand new fiber. Where DSL is available, it is offered for $50/month (in Atlanta). The bandwidth itself should be no more that $10 per month which leaves 40/month.
If we ignore support costs it would take 7.5 months to pay for that. If we allocate $15/month/customer in support costs, break even happens at 12 months.
In practice, there will be nowhere near 100% customer buy in for the service. However, the ILECs have an economy of scale that I have not considered in my calculations at all.
That's with all new hardware and lines. Since DSL uses existing copper, the expenses will be lower for the phone company.
The roadblocks to all of this to a newcomer are many. There's establishing a relationship with local government to get right of way, establishing a reputation, getting the up front capital, etc. The ILECs have all of that already.
Short summary: the price of DSL service is in line with other business, but the foot dragging is inexcusable. Complaints about the cost of the upgrades (by the ILECs) are nonsense.
Re:Cost of fiber (Score:2)
My estimates were based on the retail price of a gigabit fiber from my home to my office downtown (where multiple T3s are available for uplink). The setup was 1000baseSX cards on each end with media converters from multimode to singlemode w/ repeaters every 5km. This would be completely seperate from the phone system.
Since It was only a pipe dream, I did not consider right of way costs. I estimated the cost of running the fiber based on doubling the retail cost of hardware (which another poster pointed out was too low).
After I totaled it up and got a surprisingly low figure, I compared to the cost of unlimited 2B channel ISDN and saw a payback just under 5 years. Since a gigabit is a 'bit' excessive, I considered the possabilities of cost shareing with neighbors.
Finally, I compared to DSL, and reasoned that even if my cost estimates were off by 2 orders of magnitude (according to the other poster who has more experiance, they were, in fact, off by about one order of magnitude), once I factored in the cost sharing, the payback would still be under 5 years, which is often the golden number for business investment.
In summary, my figures aren't quite solid enough to call a business plan (but could be firmed up), but they are enough to raise the question "why isn't Bell moving on this?" and "Why is ISDN so expensive here?".
There is no competition (Score:3)
As I see it, there is no competition at all right now. All Bell will tell me is that DSL is not available in my area (I KNEW that!). MediaOne has been saying Real Soon Now (TM Pat. Pend) since 1995. All are drastically exagerating the costs of setting up the infrastructure.
I did some rough calculations the other day for the cost of running my own fiber from home to work vs. the monthly charge for allways on ISDN. At retail cost for the hardware, and doubling that figure to account for labor (perhaps the labor should be higher), I came up with a payback just under 5 years. The catch is, I priced running Gigabit fiber vs. 128Kbit ISDN with no adjustments. If you take into account that a gigabit line can carry 833 ADSL connections with no overcommit (and 8330 with a typical overcommit) The payback would be under a year (allowing for the additional cost of neighborhood switches). Add into that that Bell could get the fiber much cheaper than retail. Finally, add in that many customers (especially the early adopters) would be willing to pay an installation fee up front, and there is no cost excuse to not provide fast access.
The real reason has to be that they are still too busy selling over priced T1 and ISDN services.
MediaOne, seeing that they have no worries from Bell, are in no big hurry to establish broadband in this area (though they are making more visable progress than Bell even though they have to run all new cables while bell can re-use what they have).
As far as open access goes, They are inflating the cost figures as an excuse to get customer lock-in. I don't buy the argument that third party ISPs would confuse things, about half the ISPs out there lease their dial-up banks, bandwidth, and rack space from other providers anyway (all they actually own is a couple of servers co located elsewhere). All of that is available NOW for $1790/month with a 1 year contract. Somehow, the colo providers manage not to be confused, and manage to make a profit without lock-in.
Re: equal access terms (Score:3)
My car is paid for, but I'm not obligated to car-pool, rent it out, time-share it, or even let a friend ride in it.
You were never given an exclusive right to buy a car in your area. You also were never given the right to park on a strip of your neighbor's yard (whether your neighbor liked it or not). The cable companies ALL were given a very valueable exclusive right to provide cable in their area. And the right to dig up anyone's front yard without notice or consent. That considerably reduced their risk (as a captive audience always does).
If you doubt the value of those grants, consider how expensive (and difficult) it would be for you to purchase the right to dig up your neighbor's front yard at any time you needed to and multiply by ONE MILLION.
Being required to lease their cables to others is NOT a very high price to pay for all of that.
Regulation isn't the solution. (Score:3)
The government does not need to take a stance on the Internet business, any more than it needed to take a stance on the radio business. If it does so, it will only proceed to violate people's rights the way it has in radio -- restricting speech, limiting control to those who are rich enough to pay for a license. (Should you have to be licensed to run an ISP? To operate a Web site? How much will that license cost you? What restrictions will come with it? Ham radio operators aren't even allowed to say "shit", or to discuss politics, on the air...)
The government does not need to create competition; it needs to stop endowing monopolies like the monopolies so many cable companies have. (Many people seem to think that government is opposed to monopolies, because of antitrust laws. As it happens, antitrust is the exception; almost always, where there is a monopoly, it was created by the government. Just consider NSI...)
Now wait one second here.. (Score:1)
Companies like Media One spent a good deal of money bring broadband to the house, and now everyone and their mother wants access to those lines.. Well..
TOUGH LUCK.. If AOL wants access to the livingrooms, they should have to deal with the company that took the risk, and actually stuck their neck out to do it, and pay them hansomely for it..
Re:If there's no monopoly, there's no case (Score:1)
Re:Regulation isn't the solution. (Score:1)
It's a sticky situation..
Re:If there's no monopoly, there's no case (Score:1)
Re:If there's no monopoly, there's no case (Score:1)
My problem is that there are several ways that companies COULD access broadband, but they seem to be targetting the Cable companies, simply becouse they managed to do it first.. AOL could contract for full ADSL dialin for all customers, and cover 98% of the population of the US.. But that'd require an investment on their part, hence, 'Open the Lines, oh, and cheap, please..'..
Re:Now wait one second here.. (Score:1)
Re:Now wait one second here.. (Score:1)
And people use AOL for content, and they choose to have it presented to them in a certain way.. That's their choice.. AOL does a good job at what it does.. Providing a service for the masses..
Re:Now wait one second here.. (Score:1)
A) They simply sit back and rake in the fees for providing that access, and do quite simply nothing to move forward.. They have incentive to keep things in the dark ages, becouse by spending little, they can rake in lots..
B) They DID lay down the capital, and they should be allowed to keep it, but others can simply walk in and take what they ignore.. Cable companies are now doing this by offering phone service on the same line..
Re:If there's no monopoly, there's no case (Score:1)
Re:Regulation isn't the solution. (Score:1)
Re:Only one cable company (Score:1)
Hell, why don't we mandate that it all be taken over my the public works department, just like roads.. That's what the basis of 'opening up' is..
Oh wait, their service sucks, now doesn't it? Hrm, perhaps if they had insentive to actually make money.. Oh wait, this is bad, I remember now..
Re:The point he was making... (Score:1)
Re:ISPs are an anachronism (Score:1)
ISP's provide a network that has a connection to other networks, which, as a whole make 'the internet'. ISP's connect to ISP's, and they MAKE the internet what it is..
The internet isn't this network provided by NSI, you know.. It's a whole lot more then that..
Re:If there's a monopoly, there's a case (Score:1)
Re:the last mile (Score:1)
They already DO have access to these customers.. It's called IP..
Re:Arguments and possible solution... (Score:1)
Re:98% ? (Score:1)
Re:The point he was making... (Score:1)
Anyway, I'm NOT saying that everyone should 100% have to lay their own lines, but at the same time, the government should NOT FORCE companies to literally give away access to something that they spent the money to lay originally..
Re:Only one cable company (Score:1)
I truely wish I could think of another way, but in a capatalist society, I can't think of any.. Can you?
Re:Only one cable company (Score:1)
Re:Now wait one second here.. (you are wrong) (Score:1)
Re:Regulation isn't the solution. (Score:1)
Re:Regulation isn't the solution. (Score:1)
Re:FYI (Score:1)
Re:Only one cable company (Score:1)
Re:Only one cable company (Score:1)
Re:If there's no monopoly, there's no case (Score:1)
Re:Only one cable company (Score:1)
But the service already sucks! So all we've got is a choice between public works which suck due to lack of motivation from competition, or pseudo-monopolies that suck due to lack of motivation from competition, or twelve power lines, 8 cable lines, and 3 water lines coming into my house out of which I use one of each?!?!
There's gotta be a better way!
--
TransAct project - fibre to the curb (Score:1)
The trial (of approximately 200 homes in one suburb of Canberra) is due to finish on the 31st of July, with a decision made about whether to roll out the network to the rest of Canberra to be made hopefully by the end of August.
It's interesting as Canberra was bypassed by the two major telephone companies laying cable (Telstra and Optus) - most of Australia's major cities have two identical, side by side cable networks which are heavily criticised as unecessary and expensive duplication of services. Canberra has a relatively small popluation of approx. 350,000 but has a higher rate of computer ownership and internet access than the rest of Australia. I can't wait for the whole network to be rolled out! Video on demand, satellite TV feed, internet access, quake, quake and more quake! (-:
Check it out at: http://www.transact.actew.com.au/ [actew.com.au]
Arguments and possible solution... (Score:1)
1. Cable and telcos have a government given permission to lay cabling on YOUR property.
2. Cable and telco companies are using these government given rights to deploy high-speed/broadband services to their customers.
3. AOL is complaining because they can not get their hands onto that wiring owned by telcos and cable companies.
4. AOL also can't get rights to deploy their OWN wiring to these customers. (Cable/telcos have a monopoly here)
5. AT&T says shutup AOL you should have bought a cable provider.
Here's the problem:
1. If AOL buys a cable provider then they will have a monopoly on service in the cable company's service area. (AT&T will have monopoly in their service area.. etc etc). This is bad for the consumer.
Solutions?:
1. Allow AOL or any other ISP to have land rights to lay their own high-speed infrastructure in your back yard. (I don't think that will go over well with most homeowners)
2. Ignore it. Stick it to AOL and assume that the telco companies (xDSL) and Cable companies with overlapping service areas will compete.
3. Regulate. Have the cable/telco only provide a basic IP service (for a fee) and then allow AOL or another ISP to handle the e-mail, news, etc services. (Also allow the telco/cable co to provide these services)
What's the best / fairest solution in reality?
IMHO #3 would be the best for the consumer, but only if the regulation was done well enough and for a very tiny cost to both the consumer and the service and cable provider. The fact is that #3 is what modem users are doing right now and it works quite well.. so why change it? You pay for the phone line and for the ISP seperately. Many telco's have their own ISP service (USWest), but allow you to choose any you want. But that's just my opinion.
Ex-Nt-User
Re:Regulation isn't the solution. (Score:1)
A minor correction about ham radio operators:
We may not be able to say "shit" on the air, but we can certianly discuss politics. In recent years, the regulations regarding "taboo" on-air subjects (business discussions, etc.) have been relaxed. Of course, there are many lids on the air who ignore regulations and plain old common courtesy altogether, anyway...
Chuck Milam
KF9FR
your own good (Score:1)
or the other (cable co, or ISP). Many have
pointed out that expensive infrastructure has
been laid out by the cable co's. Tough.
What I am concerned about is my best interest -
not the companies.I personally think that today,
cable lines are better suited to delivering
content than the traditioanl copper technology
(DSL or not). So I want to use those lines to
gain access to the outside. Would I like to have
my cable company as the sole high bandwidth
provider, or would I like to have a choice?
I would rather that multiple high bandwidth
access providers fight for my $'s to deliver
content to my home over cable line; the cable
companies may not like this - but i am not
here to fill their wallets (heck they already
take my money with their exagerrated cable bills).
I have no sympathy for either side of this
argument. I want whats best for me regardless of
who gets screwed (as long as its not me - but the
odds are against it - i dont have the $'s to sway
congress).
Re:your own good (Score:1)
behave in such a manner. However time after time,
you will notice companies will extract every
dollar out of you that they can. Banks and
their ridiculous fees come to mind. They are out
to run a bussiness, and please the shareholder.
Thats their business mantra; fine. Gouge a few
customers along the way - that seems acceptable
too these days.
When the companies make a turn around and behave
in an enlightened manner, I shall revert to
behaving in an "enlightened" manner as well.
Respect consumers rights and intelligence, and
they may return the favor. Its a two way street.
Re:Self serving rhetoric (Score:2)
In the last six months here, and the last year or two nationwide, some companies have choosen to bypass the telco and purchase alarm circuits between their facility and their clients, and provide DSL that way. Some times it works, sometimes it doesn't.
Kind of silly that joe-blow ISP can get DSL working and a telco monopoly can't.
Re: equal access terms (Score:1)
On top of this, the cable company is paying the government taxes (not the other way around) on its take.
I'm not a fan of cable companies... they price gouge, offer lousy service and support, usually, and are a general pain in the ass to deal with. However, its their cable. The fact that its paid for already doesn't mean a thing. My car is paid for, but I'm not obligated to car-pool, rent it out, time-share it, or even let a friend ride in it.
If people were required to share their major purchases and acquisitions when someone else needed access to them, what would be the incentive to actually buy or build anything? Why should I buy a car? I can just use yours. Why should I put a driveway in at my house... my neighbor's is next to my door anyway, I'll use his. Why should I even buy a house... etc.
Requiring community access in this fashion is a huge leap towards communism. We all saw how well that worked.
The cableco's took the risk of spending on laying the cable, they own it and can do with it as they please. period.
What planet are you on? (Score:1)
Re:Regulation isn't the solution. (Score:2)
Re:ISPs are an anachronism (Score:2)
What did my ISP charge me? Nothing. It was all in the monthly service and they enjoyed the challenge. BellSouth did not charge me as the problem was on their end, but I ended up with $110 on air time for their insisting it was my problem on my end. An ISP put a stop to that nonsense.
ISPs are an anachronism (Score:4)
Fast forward a few years.... Modems get faster, and people start using them to make IP connections across phone lines. Still not incredibly fast, but still somewhat convenient. At this point, most IP addresses were still assigned to specific machines.
With invention of the World Wide Web, interest in the internet started to grow, and a cottage industry erupted around being able to provide IP access to people at home. About the same time, protocols became established to provide temporary IP addresses to a dialed-in machine. Voila! The ISP was born. And, as ISPs grew, they began to offer more services to their customers: e-mail, usenet news, web server space, and so on.
So, ISPs began as a solution to a problem: Nobody had the money for a direct internet connection to their home, but a lot of people wanted internet access. As a result, the primary purpose of an ISP is to provide a place where people can dial their modems and connect to the internet. The other big thing that ISPs do is provide a method for client machines to obtain IP addresses. All the other services ISPs provide: Mail server, news server, web space and so on are not intrinsic to the ISP itself -- it's perfectly possible and reasonable for a person to use one company to dial into the 'net, another company as their mail server, and a third company as a usenet server.
So, let's suppose for a second that it was possible and economically feasible for a person to have a "direct connection" to the internet from their home -- what does the ISP provide?? The only thing that I see that they still do is hand out IP addresses. And, for a short time, that would be useful. But, in the next few years, IPv6 is expected to take off, providing enough IP addresses for every man, woman and child to have several dozen. (I'm not sure of the exact ratio, but it's big.) In that case, there's no reason to borrow IP addresses at all, and the only remaining reason for ISPs to exist goes away.
I would argue that 'always on' internet access, via cable modem and DSL is, in fact, a direct connection to the internet. And, with that, nobody needs an "Internet Service Provider," because they already have internet service.
My opinions. Not my employer's.
Essential Facility (Score:3)
(1) Price: Laying any sort of network is incredibly expensive. Weather it's gas pipes, electrical cables, or phone/data wiring, it's expensive to access rural areas, and complicated and disruptive in urban areas. This was, of course, the initial logic in giving regulated monopolies in the gas, electrial and telephone markets. The only way to insure that this expensive infrastructure was installed was to make it profitable, and the only way to do that was to give a monopoly to the company that did the installation. Of course, with deregulation, the same barriers remain to people who want to build new networks (without the same degree of rewards), and the already entrentched companies are free to use their (de facto) monopoly base to encroach into other businesses (like ISP's).
(2) Legality: There's a concept called essential facility. Back in the late 1800's, there was one railroad bridge across the Missisipi near St. Louis, and was the only practical river crossing for that region. The company which owned the bridge, a rail company, would allow access (for a fee) to other railroad companies. However, there came a point where the company owning the bridge began preventing some of their competitors from using the bridge. In an antitrust case, it was decided that the bridge was an "essential facility", and as such, had to be made available, at a reasonable fee, to all comers. We've seen the same sort of thing in the telephone industry, where your local phone company MUST give you the long distance service you desire.
The bundling of ISP services with bandwidth services, is totally counter to everything we've seen so far. Bell Atlantic will provide me with an ISDN line, but can't require me to use their ISP. (that would be tying, exactly what Microsoft is accused of doing, might I add). As long as service and bandwidth are connected, we won't be able to turn bandwidth into a commodity, just like rice or paper.
[Note: I am not a lawyer. I learned about essential facility from a variety of sources, and I believe I've gotten the core of essential facility correct.]
---------
Re:If there's no monopoly, there's no case (Score:2)
At least here where I live...the cableco (Intermedia in my case) *is* definitely monopolistic...they are the only cableco available to get service from where I live. While the franchise is not an exclusive franchise...meaning that other cableco's could come in and compete...that certainly hasn't happened and general consensus is that it won't happen...
So...cableco's in most places (I think most have similar franchise agreements) are monopolistic.
Further...I find most of the cableco arguments (AT&T and the like) to be flakey at best...perhaps I'll expound on my thoughts in a later post...don't have time at the moment.
Jeff
Re:ISPs are an anachronism (Score:2)
I would argue that 'always on' internet access, via cable modem and DSL is, in fact, a direct connection to the internet. And, with that, nobody needs an "Internet Service Provider," because they already have internet service.
I can think of a lot of things that an ISP provides. One example: e-mail. Suppose I have an always-on connection to the Internet. I have two choices: set up my own mail server with all the headaches that entails, or have my ISP provide me an e-mail address and run the mail server for me and everyone else they serve. Now, I'm technically capable of running my own mail server, but most Internet users aren't.
Now, my ISP provides Unix services, so I get nice things like procmail on the mail server. I depend on this. TCI, for example, doesn't provide that sort of mail service. If I have to use TCI as an ISP because I'm using their cable modem service, I can't choose to use procmail because it's not offered. Moreover, TCI won't set up DNS for me to allow me to run my own mail server, so I can't even kludge around the problem that way.
The same thing applies to DNS, FTP, HTTP. In all cases, if they decide to do something to "improve performance" like force the service through their proxies, and I have problems with their proxies or just don't want them seeing every single thing I do, I have no way of opting out of that other than selecting another ISP and if they're the only ISP on their cable that means giving up broadband access.
Cable, monopoly, risk, and physical plant (Score:2)
An excellent and informative essay.
There are a few points that I hope slashdot posters will keep in mind (as I see that the cable company apologists are already out in force):
While today there is beginning to be some miniscule amount of competition between cable providers, the overwhelming majority of cable has been installed and run as a de jure monopoly (just as the telephony and electrical infrastructure was built).
The classic architecture for a cable system (coax-based) is lousy for providing IP services. Basically, it's non-trivial to take something that was built for 100% push, all users getting the same content, and change that to a system that gives good upstream bandwitdth. Cable companies with older cable plants are basically screwed, and will need to spend $$$ to be able to offer broadband internet that scales beyond the first few early adopters. Companies that deploy their plant now have a huge advantage, because they can make their initial investment in hybrid fiber-coax (HFC), which does work better to provide both classic CATV and broadband internet.
AFAIK, there are no serious plans by anybody to set up competing cables to the curb. Those lucky companies that are building cable plant with new HFC are those that are wiring up areas that are newly built or just never had a cable rollout yet.
In the two other major monopolies (telephony and electrical power) that have been opened to competition, there is no rollout of new distribution infrastructure. In the telco case, access at the central office has been mandated (leaving a single physical plant for the last mile). Also, the power companies are not planning on building competing grids, but will compete on delivering power over the existing grid. So, for telephony, the ILECs (Incumbent Local Exchange Carriers) have to open up physical space and wiring in the CO, plus have interoperability for the number databases, and the incumbent power companies will need to figure out how to do something similar with shipping power around the grid.
As you can probably guess, my sympathy is not exactly with the cable companies. I have yet to see a good argument why they ought to get to keep a service monopoly on their plant while folks like the RBOCs (Regional Bell Operating Companies) and electric utilities don't. Just like Ma Bell and the public utilities, they managed to grow huge as a legally protected monopoly. Now, that "competition will make it all better!" has become the new fad, they would like to protect their little fiefdom. Of course they would.
"Big Business and State Socialism are very much alike, especially Big Business." -- G. K. Chesterton
If there's no monopoly, there's no case (Score:2)
As long as a cableco isn't acting as a monopoly, there should be no requirement on them to lease lines to anyone that would horn in on their action. I'd be pissed off if I, acting as a legitimate business guy running a computer consultancy in competition with other consultants, was required to teach other people how to give technical support. It's a tenuous analogy to be sure, but a valid one (I thinK).
All this, of course, is dependent on my understanding of US cable companies. If I'm wrong, I'll understand if I'm moderated to oblivion. In fact, I'll be delighted if it means fewer people seeing me acting the gobshite.
Re: equal access terms (Score:2)
Re:A Ridiculous Post (Score:3)
That disclaimer is pure shit.
So, you know for a fact that Mr. Weightman doesn't personally believe what he's saying in this essay, and is really just acting as a mouthpiece for his clients? Is there some rule that says lawyers aren't supposed to take cases in which they agree with their clients? Is it somehow intellectually dishonest?
Many other posters have raised some serious points against mandated open access to the "last mile". We wouldn't be reading these responses and engaging in this discussion right now if Mr. Weightman hadn't been given access to this forum to clearly state his side of the issue.
"Open Access" already getting positioned in DSL (Score:3)
END USER -----DSL-->TELCO-->AC------> ISP1 -----> RADIUS
(connect this to the AC... ./ doesn't allow for tags) -----> ISP2
(imagine more connections to the AC...)
So the X is the end user. He/She connects to the telco using the DSL line. The DSL connects (some details have been left off) to the Telco (i.e. Ameritech where I'm at). The Telco has something called an AC. The AC is the Access Concentrator. Think of it like a router. Then connected to the AC are a bunch of big ISP's that have provisioned lines, Value added features, etc.
So, how does PPPOE work? You run a PPPOE client on your machine. And lets say for this example that you have selected ISP1 as your ISP. When you login (using name and password), a PPPOE packet is sent down the DSL. The Telco routes the PPPOE packet based upon the ISP you select. The PPPOE packet eventually makes its way to a PPPOE server (not shown) and that server authenticates you through RADIOUS (which all the ISP's have been already using and know how to bill from, etc.)
So, once you are authenticated, you get an IP address from the ISP! Any traffic to that address goes through the PPPOE server, down the DSL line encapsulated within PPPOE packets and eventually your machine. The advantages to this system are that:
- The Telco doesn't have to do any real work. They just wait for the ISP's to provision lines, and then the ISP's pay them to have access to the AC. The end user ends up shelling out money for the DSL line.
- The ISP's know Raidus really well. They have been using it for years and do all of their accounting/billing from it.
- Unfortunately, this also means that they will be able to charge for a "network login", i.e. for each machine you have. Granted you could (and probably will) run a Linux machine and NAT all the rest of your machines.
- Right now DHCP has a drawback that there isn't a really good way to authenticate someone before handing them an IP (without making everyone register their MAC addresses...what a pain.)
-Jeff Ballard (jballard@nwc.com.nospam)Re: equal access terms (Score:2)
You cannot get dial-tone service from a long distance company to bypass your local phone service provider. Your local provider has to allow you equal access to the LD provider of your choice.
There really isn't a parallel here, that I see. The added value of AOL in its proprietary content is not similar in any way I can think of to long distance service.
What I gather the central issue here is that when you get broadband service from a cable company, the $40 you pay each month is supposed to be for access and content. AOL wants to be able to sell its content to you and wants your cable ISP to reduce your monthly access by some amount if you don't use their content?
Maybe I'm just confused here. I'm paying $40 a month to MediaOne for an 'always on' high-speed connection. If they have content, I don't use it. If they started restricting the services available to me because they are providing a monopoly service and I have no option to go elsewhere, that is one thing. If I'm locked into something besides my connection at $40 a month, I don't really care so much.
Re:Why is the last mile the hardest mile? (Score:2)
No, but consider this: access/server providers, though having little incentive to disrupt current net standards, have very high incentive to create exclusive content and services only availabe on their own networks. And they have incentive to curtail or at least manipulate the formation of new standards. The browser wars have already demonstrated this behavior.
So, in effect, there may be a time when you must use a certain ISP to receive certain types of messages from some people.
Competition *should* keep this sort of thing to a minimum, but there are many places with only one option available for high speed access. And even where there are a handful of competing services available, there is still no guarantee that they won't collude to keep a strong grip on the options available, like say, not allowing servers even when bandwith is plentiful. They all have a shared interest in keeping people away from things that aren't "industry sanctioned" content, because they make more money from that than they do from customers who want to run servers.
Not that I think the old style regulation is a good idea, but the "you lay the wire, you control the access" approach could prove equally disasterous.
And you forgot the economic reason for state-sanctioned monopolies: the cost of building infrastructure is so high that a regulated monopoly is more efficient than competition. I don't remember all the details why, but I imagine that competition in the utilities market creates a lot of redundancy and reduces economies of scale.
*sigh* (Score:3)
FCC != Justice Dept. != Congress != local government
I hate to burst your bubble, but the government is not one grand conspiracy. It is composed of many parts with competing agendas, both within and between those parts, and in most cases those agendas are set by people not employed by the government.
And the government is multi-tiered. The local government that grants one cable company a local monopoly is not the same as the one that forces another to open it's lines to ISPs.
The whole point of this article was to show that there is a battle going on by very powerful billion dollar industries, and government policy is as much their battleground as the market. There are no clear good guys, there are no clear bad guys, there are simply competing interests, and those interests may or may not jive with the interests of us, the consumers.
(And really, how effective do you think radio would be if people could broadcast on the same frequencies? Who wins in that situation, the independant station or the wealthy congolmerate?)
This Problem is More Complex Than It Looks (Score:3)
The fundamental problem here is similar to that of utilities like water, telephone and electricity: every home must be connected, and it costs a fairly large amount of money to connect. The problem is that a) no-one would ever spend the money to connect a consumer who will jump ship next week and b) no consumer will pay the money to be connected. $10/ft. (or whatever the going rate is) is a lot when you're 2 miles from the nearest station. But once you're connected your neighbor can connect from you, which is maybe 10 yards.
The approach taken with the roads often fails to work, as anyone who lives here in Colo. knows. If cable access were gov't owned we'd still be using ducks to send IP packets. Government programs have their own perverse incentives which mess things up.
The approach taken with utilities often fails as well. Monopolies have little incentive, esp. with a product which is needed (like water) or perceived as needed (such as electricity or net access). The monopolist, no matter how pure his heart may be, will find himself shafting the consumer due to the perverse incentives of his situation.
The free market approach is v. difficult. How do companies compete over a common territory for which they share responsibility? How can they differentiate from the competition? What incentives do they have to upgrade their lines (note how low-quality telephone lines still are; there's no incentive to change them)? The solution is non-obvious.
I am reminded though, of the way roads (a network is more like a road than a water line; it carries traffic from one point to another, not a product from source to recipients) were handled in the middle ages: each parish was responsible for maintaining its own roads, with the sovereign's roads in between cities. Perhaps such a solution would work with networks. Each area of a city would be responsible for funding and maintaining its own network. The area networks of a city would connect together, and the state governments would maintain the intercity lines. States would handle connexions to neighboring states. The terms would change for other countries (e.g. province instead of state), but the process would remain the same.
Such a system would need to be independent of the government, because then it would become one more pawn, like schools and roads are today (Know why we have a drinking age of 21? Because of the national highways), as well as becoming prone to the negative effects of a beauracracy. Of course, it prob. still wouldn't work, but at least it'd have a chance. Nothing involving corporations would benefit everyone. Nothing involving government would benefit everyone. Maybe something involving everyone would benefit most everyone.
Re:If there's no monopoly, there's no case (Score:2)
Say five cable companies want to compete. Now imagine they ALL lay cable to the curb. First off, can you imagine the logistics of that? We're already running out of room on our telephone poles where I live, and they just recently put everything under ground, which cost a fortune, and was reflected in our bills.
Secondly, what a phenominal waste of money. Five pipes layed right to your front door, and you only use one of them! It's especially wastefull when you realize that ALL FIVE companies can fit all their combined content in just ONE PIPE (like they do now).
I know it seems harsh to force a company to allow others to lease their hardware, but it's not like they're being forced to give it away for free. They are charging hefty lease rates.
Ideally, I think the cabling should all be done by a seperate (government regulated) company, which cable and phone companies can rent from. Of course that never works because govt's can never afford to keep technology current.
Aw fuck it, the gov't should just jack us all up with a BIG FAT FIBER and end this crap. Fiber optics for all!
Re:Open Access is for winers (Score:2)
AT&T basically just wants to maintain complete control. No wonder they have the Death Star for their logo...