TELECOM Digest OnLine - Sorted: Is the DSL Meltdown Starting?

Is the DSL Meltdown Starting?
25 Jul 2006 17:09:14 GMT

About a year ago the FCC ruled that the phone company's DSL circuits
were not techincally part of the telecommunications network and not
subject to the same regulations. The net result was that DSL was no
longer tariffed and that, like the cable TV companies, they were under
no obligation to provide access to 3rd-party providers.

At the time many of us were predicting that the phone company would
take advantage of this ruling to gain complete control over all
Internet traffic flowing over phone company circuits and kill off the
3rd party independent ISPs. The FCC asked for a one-year waiting
period before the phone company took any action. That year is now
almost up.

Yesterday I received my copy of a notice that Verizon Data has been
sending to all of their DSL customers:

Dear Valued Customer,

On September 23, 2005, the FCC released an order in which it concluded
that Verizon was no longer required to offer DSL services under tariff.
In place of a tariff, the FCC order allows Verizon to offer DSL services
under commercial contract.

This letter is to advise you that effective August 14, 2006, Verizon
will begin offering Verizon Infospeed DSL Solutions on a month-to-month
or annual plan basis and Verizon Inforspeed Premium DSL Solutions on an
annual plan basis (Verizon DSL Service) under contract pursuant to
terms that will be posted on Verizon's website at the following URL:

Please note that your continued use of Verizon DSL Service after
August 13, 2006 will constitute your consent to these terms under your
current plan. The terms are substantially similar to those under the
existing FCC tariffs, including price and other material terms, and these
terms will apply to your purchase of Verizon DSL Service until at least
November 15, 2006.

After August 13, 2006, Verizon DSL Service will no longer be available
for purchase from Verizon's FCC tariffs. This change affects Verizon DSL
Service in all geographic locations in which Verizon makes the service
available. Should you wish to negotiate other terms for the purchase of
Verizon DSL Service, or if you have any questions about this change,
please contact Verizon at 1-877-483-3651.


Peter Castleton
Director, Product Management/Product Development
Verizon Broadband Solutions

The statement I found most interesting was "until at least November
15, 2006." To me that says they're planning additional changes in
another three months. Neither my ISP nor myself have been able to get
Verizon to tell us what they're planning. According to my ISP, in a
correspondence just a couple of days ago,

The removal of the FCC tariff regulations for DSL providers has been
rather nerve wracking for independent ISP's over the last year.
Verizon in particular has been extremely vague regarding its intentions
once the regulations completely end in August. They have not as yet
provided us with any detailed information as to what changes will
occur for our customers, nor to our relationship with Verizon in
general, other than that changes will occur.
I simply cannot guarantee beyond doubt that we will be able to operate
as a Verizon host ISP after November. The communications from Verizon
state that we will be in operation through them between August and
November, but we have not established any information beyond then.

I cannot imagine that Verizon and the other phone companies will leave
such easy money laying on the table just to maintain the status
quo. The FCC has made it possible for them to forcibly absorb all of
the DSL customers of all independent ISPs. And because there will be
no choice for DSL subscribers they can do it without having to worry
about such trivial things as service options or quality of service.

In one fell swoop they'd go from competing with hundreds of ISPs, who
differentiate themselves primarily on the basis of quality and
customer service, to only competing with the cable companies. And
that's not much competition since the basic package from Comcast is
now almost $60/mo, and there's generally only one cable provider in
any given service area.

Perhaps the most disturbing aspect of this is what will happen once
the phone companies have complete control over what flows through
their wires. "Net Neutrality" is a phrase that's generated a lot of
angst lately. Some, mostly industry representatives, claim it's
unfounded. A recent article on Newsforge has made an interesting
comparison with the current cellular phone network to demonstrate what
can happen in the closed network environment that the phone companies
are trying to create.

What will happen to the voice competition from all of the VOIP
providers such as Vonage and Packet8 when neither Comcast nor Verizon
will route their traffic? Note the author tagline at the end of the
Newsforge article:

He is writing the article pseudonymously because the cell phone
companies have the power and freedom to crush his company by blocking it
from their networks.

The evolving oligarchy is going to have the power to control the who,
what, where, when, why and how of your Internet usage. There are some
very smart people who can creatively manipulate that into profit. I
wish someone would tell my why they won't.

Be afraid. Be very afraid.

John Meissen

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