TELECOM Digest OnLine - Sorted: Re: Broadband Competition Must Surely be Working

Re: Broadband Competition Must Surely be Working

Robert Bonomi (
Wed, 24 Aug 2005 14:53:36 -0000

In article <>,
<> wrote:

> wrote:

>> That is a Straw Man argument. The phone company DSL revenue was/is
>> generated from existing infrastructure that was developed with the
>> benefit of government sponsored monopolies and subsidies. They have an
>> existing revenue and equipment base to support the expansion to
>> fiber. Also, the cable companies that you reference were deploying in
>> a new non-telecom market, also with monopoly protection. It wasn't
>> until recently that they offered Internet or telecom services (I know
>> when they did it, I had one of the first cable Internet connections in
>> the area).

> I don't agree. The "existing infrastructure" you speak of consisted
> of obsolete technology in both switching and the local loops. It
> worked fine for POTS and low speed dialup but it was no good for
> higher speed work.

"Bullsh*t" applies.

DSL was expressly designed to work on pre-existing physical-plant
wiring. *NO* wholesale replacement of physical plant was needed.

My DSL circuit is carried on a wire-pair that is nearly 50 years old,
with the possible exception of the _first_ 130 ft out from the
C.O. switch. There is one, and only one, 'patch point' on the circuit,
and it appears to be within the C.O., itself. Aside from that, it is
a dedicated point-to-point cable from the C.O. to the building I'm in.
'direct-burial", not in a utility tunnel, or anything like that.

> The phone company had to invest in new facilities
> to support broadband. This investment was done in a competitive
> marketplace.

"head-end" DLSAMS, and splitters, yes. "Distribution" facilities,
*NO*. And, at least locally, the ILEC was very-much a 'trailing edge'
participant in the DSL market. It was very late in the growth cycle
before they climbed on the bandwagon, and their offering was 'not
competitive' (either on price or performance) with what the other
players were offering. They eventually killed that offering
completely, and replaced it with a more 'conventional' offering, which
then sold well.

> The cable companies had to compete against plain old rabitt ears, high
> gain rooftop antennas, and satellite TV.

> Obviously rollouts in different areas occured at different times. But
> generally consumer broadband service was offered on cable and phoneco
> at roughly the same time.


In the Chicago area, DSL availability pre-dated cable-Internet by
around 10 years. It was also available from a CLEC at least
*five*years* before the ILEC offered DSL.

>> I suspect the ROW is grandfathered onto existing ROW agreements used
>> with the existing phone service. They are only deploying into areas
>> that they already serve.

> No, it is not. FIOS is treated differently. It is more difficult for
> the phone company, but I suspect they chose this path to avoid
> regulations.

> I still maintain that the capital cost to lay fibre optic, esp when it
> can be done selectively to areas with the best customers, is not
> unsurmountable.

"That depends". <grin>

ROW access _is_ a problem in many locales. Generally, erecting your
own poles is _not_ an option, so (if you're going 'overhead') you have
to rent space on the existing poles. *IF* there is space available on
the poles to rent.

Going 'underground' has its own set of problems, involving avoiding
'collisions' with pre-existing buried cables, gas/water/sewage piping,
etc. Try to figure out how you lay two cables down the block, with
taps going out to each house, *without* the two systems crossing over
each other (making maintenance of the lower' system "difficult).

> The cellphone world was supposed to be two companies,

Correction: two in any _specific_ locale. *NO* assurance that either
of the companies serving your town would also be providing services in
the next town/county/state away, in any direction. with one of the
two licenses going to the 'wire-line' provider in the area, you had
some hope of 'equivalent' coverage to local land-line patterns.

> but quite a few have built networks, and quite a few more sublet
> services from those networks.

>> You're missing the point. I currently have phone company DSL, and I'm
>> quite happy with it. But I =DON'T= use the phone company ISP. Because
>> the phone company is an infrastructure provider I can choose a
>> different ISP, allowing me to tailor the services to my needs. I even
>> pay a premium for that. What Verizon is doing is eliminating that
>> option, forcing everyone into the FIOS equivilant of Verizon
>> Online/MSN DSL but charging them 30% more for the priviledge. ...

>> Because of the way the service is classified they are also free to
>> control what traffic flows on their network. They can block Vonage
>> just as easily as any other service; they can block traffic to
>> "objectionable" web sites. This is not moving in a good direction at
>> all.

> I understand what you're saying -- since Verizon FIOS is deregulated,
> they can do as they please, just as any other business may require
> exclusive packages with their customers. (I don't think a nice fancy
> restaurant would appreciate it if I came in, ordered only a cup of
> coffee, and then ate a pizza I brought in with me.)

In fact, there are FEDERAL regulations that prohibit that. :)

Bringing your own _food_ into a place where food is served is a no-no.
(there are some special cases -- like 'sealed' beverage containers --
that are _legally_ allowed; although the establishment may have it's
own prohibitions.)

> There is nothing stopping the cable company or a new business from
> laying their own fibre or whatever network and offering their own
> service, undercutting Verizon's FIOS prices. If Verizon FIOS is
> priced so unfairly high, someone else should be able to undercut them
> (presuming there is a demand by customers to use their own ISP.)

> The other alternative is to go back to regulation and control the
> prices. Then we're back to the old Bell System.

There *IS* a third alternative. Separate the 'content' from the
'delivery infrastructure'.

Have one regulated-utility operation that *only* operates the local
'physical plant' and distribution facilities. Access to which is made
available to 'all comers' (content providers) at the _same_ rates for
the same level of access.

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