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Summary:

FCC Chairman Kevin Martin did not waste time and showed that he is watching out for the interests of phone companies. “We’ll need to move quickly to establish regulatory parity between telephone companies and cable companies that are providing a broadband service,” he told the Wall […]

FCC Chairman Kevin Martin did not waste time and showed that he is watching out for the interests of phone companies.

“We’ll need to move quickly to establish regulatory parity between telephone companies and cable companies that are providing a broadband service,” he told the Wall Street Journal.

If he gets his way, he would have effectively put the final nail in the coffin of the Telecom Act of 1996 that lead to a speculative bubble like never before.

“I think that it is important that consumers have access to all different kinds of information that’s available on the Internet, but I think that companies that are investing in providing high-speed lines to consumers want to make sure they can provide those services…and forcing them to sell those lines at a discount would discourage them from investing in the upgrades necessary to provide those services,” Mr. Martin said.

This would be really bad news for folks who are getting their lines from Bell companies. (Never mind, Bells have future proofed themselves by promises from US government that they won’t have to share their fiber networks!)

I just have to point this out that once again the Baby Bells have won. They played the telepoker right, got access to long distance markets, then slowly got rid of local competition and now are back to being what they really are – phone companies. As I have always said, never bet against the Baby Bells.

Elsewhere in the Journal, there is a story about the price war between the Bells and the Cable companies, which talks about special offers and other marketing tactics being undertaken by both camps to lure customers. (Consumers go forth and lower your broadband bills … its a good time to do so!) Is it me or does everyone else it as perception manipulation right on the heels of Brand-X decision – by incumbents? Oh maybe its just me looking for shapes in shadows.

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  1. “This would be really bad news for folks who are getting their lines from Bell companies. (Never mind, Bells have future proofed themselves by promises from US government that they won’t have to share their fiber networks!) ”

    Cable is not required to wholesale lines at fixed rates, wireless is not required to wholesale lines at fixed rate – only the phone company is. Seems like a logical decision to me. Now, if we want to force wholesaling, then the FCC should mandate it across the board – fiber, coax and wireless. That is the only way that a forced sharing can work competitively – if all infrastructure players have the same deal.

  2. Om, the flaw that the FCC made was giving sunset in accessing the networks. There should have been an on going requirement in providing for competition. So, with the “so called” competiton rule met, the telco’s were given sunset on how long they had to do so.

    I believe that the sunset rule should be eliminated and that the telco’s continue open access for competitive providers.

    Your accessment is justified in that we are “back in time”, pre-AT&T divesture.

  3. Charlie Sierra Wednesday, June 29, 2005

    Well this settles it once and for all, Kevin Martin is a RBOC stooge. No ifs, ands, or buts about it.

    Damian, Damian, Damian, why have you wondered from bounds of logic and good reason?

    There is a very distinct difference between the RBOC’s legacy network and those from MSO’s and wireless. The RBOC’s P&E are the (illegitimate?) lovechild of a public monopoly. That public monopoly connotes a defacto obligation/social contract with the public that supercedes the normal business investment scenarios.

    As such, the RBOC’s have benefited greatly from this deal, and shafted the public. (I know, big surprise)

  4. Charlie – because I enjoy your company and the only way to get you to write is to write something I know you’ll hate! ;)

    Seriously – you’ve been in the telco business a long time – and I totally respect your point of view. I just don’t think it now represents where we’re going in the future. In other words, there is always an argument to be made on the basis of the prior telco monopoly and the rights granted under that monopoly.

    But I’m looking at it from an operational point of view – why does it make sense to allow cable companies to act as phone companies (as they are all doing now) and yet not force them to share their lines? How does that make any sense given where we are going – where infrastructure is all IP-based?

    Have the RBOC benefited from this deal? Yes!
    Have they used and abused the general consumer? Yes!
    Am I comfortable siding with them on any issue? No!

    Back to you Charlie…./d/

  5. Hi –

    New here, not sure the rules of posting!

    It is going to be interesting to see how the rules are laid. I can see the intent of the FCC if they are allowing the ILEC to choose weather to allow competing ISP’s to share their DSLAM platform. This would follow the sunset of UNE-P, and be consistent. However, I would find rules that disallow line share in it’s entirety to be in conflict with the FCC intent to promote competition.

    For CLEC’s to provide their own equipment and network services via the high freq UNE is good. There is far more to providing broadband than just a cheap, fast connection. Having access to the platform can be used for providing mixed connection MPLS networks as one for instance, something that is not possible with current cable and ILEC DSL offerings.

    Where I believe the FCC may have missed the boat is in the ability of the incumbents to foster more than simple broadband access. The ILEC’s missed the boat 10 years ago when the Internet exploded around them, and I believe they are building a network designed for the Internet as we knew it 5 years ago. CLEC’s/ISP’s have the ability to provide services that would not occur to the ILEC.

    In another vein, with the wholesale cost of renting DSL ports from an ILEC, it is not profitable to base a business model on rented DSL. So if the FCC is encouraging the CLEC’s to colo and build more competing hardware platforms, then this ruling may be a blessing in disguise.

    But, if the idea is to keep the CLEC off the wire, then this is bad, very very bad. That would be like building an interstate system for Fords, and a seperate one for Chevy’s. Sooner or later, one will run out of real estate.

  6. NextGenCommunications Blog » Blog Archive » BrandX – The decision is clear and the direction we are headed is now cast. Friday, April 25, 2008

    [...] Om Malik has another excellent blog entry that discusses where Chairman Martin’s vision is taking us. [...]

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