FCC scraps DSL line sharing

14 Comments

No surprise here, but FCC finally made the move to put independent DSL providers off life support. Bloomberg has more.

14 Comments

Thomas Hirsch

NB — The FCC ruling on sharing DSL only goes into effect a year from now. Who knows what the broadband world will look like then. The RBOCs might be very happy to sell wholesale access to their lines….

T. Parssinen

Reading all the comments thus far, in response to Charlie Sierra, lets hope that the rules indeed
say only UNE-P is gone. That is and has been at best a break even for ISP’s anyway. An ISP cannot make any money when the margin is 10%
on the product (compared to the LEC’s selling price), and the ISP must provide CPE and pay for any repair costs that the LEC sees as ‘no trouble found’ (and they usually do find this).

Then to Thomas Hirsch…

You entirely miss the point of ‘better access’. Sure, either the cable or LEC’s high speed offering is better than dialup. However, there is a whole lot
more that can be offered than just faster access. Ask your local LEC or Cable Co for a private WAN mixing DSL and T-1 via MPLS.

ISP’s are offering such services now, which completely bypass the traditional VPN setups common a couple years ago to make cheap, wide area networks.

In summary, if the FCC is indeed trying to encourage CLEC’s to install and provision DSL services on their own equipement via UNE-L, that is consistent with the sunset on UNE-P voice switching, and is likely a good thing. I note that the FCC left it up to the LEC to decide
if they would sell access to the DSL equipment. If the UNE-L remains availible, and the ILEC will not sell DSL access, the CLEC with DSL deployed in a CO certainly will, and this will encourage the CLEC to deploy DSL in more CO’s.

Should UNE-L go away, be afraid, very very afraid.

Om Malik

charlie,

my thoughts on this are coming. i have been remiss because life has come in the way, and well finishing up two very tough stories for the magazine. but by end of the weekend it should be all set – thanks for the reminder

Thomas Hirsch

Mindless ranting about the FCC and “Washington” makes no sense.

1. I think we will all agree that access to the Internet has improved tremendously in the last few years. For instance, my Cox connection has gone from 1 to 5 download speed, with no increase in price. Upload speed has doubled.

2. Access to the Internet will improve tremendously in the next few years.

3. Who needs Earthlink, which only exists because it doesn’t have significant infrastructure costs (it lets the RBOCs pay for infrastructure)? Frankly, ISPs add just about zero value beyond connecting us to the Internet — and some add tons of pop-ups and other dreck.

4. It is very obvious that RBOCs and cable companies are headed to a very bloody battle royal –as they increasingly offer the same proucts. It would not surprise me if a cable company bought BellSouth or QWest — or even VZ or SBC. Similarly, it would not surprise me if an RBOC bought a cable company. In fact, one of the RBOCs’ biggest mistakes recently was their failure to bid for Adelphi properties, letting Comcast and TWX each take about half. A huge, huge mistake by VZ and SBC for sure.

Charlie Sierra

Look the ruling is typical tortured washington thinking, which is a long way of saying, bullshit.

But allow me a couple of points:
1) This ruling only affects UNE-P reseller type CLECs, not the UNE-L types. When the FCC puts the UNE-L guys out of business, then all hell should break out.

2) Its been abundantly clear, and not just in the communications industry, that regulatory bureacrates are not the least bit interested in their mandate of being the public’s agent. Stewardship? Screw that man.

Their regulatory tenure is basically an audition for a much more lucrative industry post, which you can’t get if you call an industry on the carpet for its bullshit.

3) Communications is still massively overcapitalized, and the only way to escape the normal corrective action for gross overcapitalization (ie. massive write downs via BK), is to rig the market, ie. own the regulators. With extra special care taken to block any new entrants.

Om, you should be writing an article on this. It underlines near every battle front the RBOCs are engaged in.

One area thats getting lots of attention is the muncipal ISP market. The RBOCs lose the economics debate hands down, but they’re mostly winning the rhetoric debate.

The issue really boils down to not who owns network, its whether consumers are getting the best possible deal. (ie. the benefits of moore’s law in terms of capacity, capability and pricing, which the market can’t enjoy if the RBOC’s number one goal is to preserve their now economically obsolete networks. ie. sunk costs) Thus new entrants are strictly verbotten!!!

The bizarre thing about telecom is that the “so-called” businesses (because they’re really much more like Fannie Mae, than true independent businesses), is that the current arrangement is actually worse than what a government monopoly could produce.

Perhaps the most jarring example of an industry fooling the dumbass regulators is the California energy market debacle. Well the on-going systemic telecom ripoff is actually much larger and affects alot more people.

Yeah, its that bad. Just think about it.

PS. Om, you wrote a book on crimes of commission, I’ve been dropping you hints for a long time that perhaps a book on the pernicious affects of “crimes of ommission” is in order. Somebody is bound to do it.

PPS. Perhaps an article on delta between mercantilism and capitalism is also on order, because it perfectly clear nobody in washington knows one from the other.

daryls

I don’t think Thomas is too far off on Wi-Max. I do think in a few years it will be a viable, although niche, broadband alternative.

Wi-Max providers however need to make sure they can bundle other services with their Internet access to truely compete.

With video time-shifting and improvements in compression, I don’t think that is to far off. Plus I do believe traditional video TV service will be under the same technology attack as traditional voice service is today.

LG

The FCC’s tortured argument ran along these amazingly nonsensical lines: We don’t allow fair and competitive access to HFC Cable networks, but we *do* allow fair and competitive access to Copper networks. So, in the interests of enhancing fairness and competition, let’s ban competitive access to Copper.

What the?

Frank Muto

WiMax & BPL providing competiton? You must be on the same drugs the FCC is on.

Yeah, perhaps one day in the future, but for now the FCC has sold out the American public to the BOCs all for the payback of politcal contributions for GWs campaign.

Is it me, or has the whole telecom industry since 2000 been upside down in getting the BOCs back into control?

Thomas Hirsch

Don’t forget that broadband wireless connection to the Internet (WiMAX) is coming soon, as is BPL (broadband via powerline). Cable and DSL guys will have plenty of competition. Plus, they will be competing with each other, especially as DSL guys will be offering TV over IP and cable guys will be offering VoIP. One day satellite guys will have technology to offer broadband Internet access at a reasonable price.

Jesse Kopelman

Brian, I wish more people had asked that very same question.

Brian Hoyt

The FCC says they want to level the playing field. Why not go the other way and force the cable guys to share just as they did the RBOC. I am not one for regulation but this ruling makes it seem like I will soon have two choices. Either I buy DSL or FIOS from Verizon or I buy a cable modem product from Comcast. I don’t like those choices.

Chris

I think you meant gauranteed to put independent DSL providers ON life support. FCC board members must be getting a kickback… b/c nobody can truly believe this makes the broadband market more competitive… Now due to this law consumers are stuck paying whatever outrageuous fee their local cable or telco set for access… and without external competition, this will be a huge loss for us consumers.

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