New FCC head seeks to quietly gut independent DSL carriers.

July 26, 2005 5:11 PM

New FCC head seeks to quietly gut independent DSL carriers. FCC Chairman Kevin Martin has circulated a proposal that would eliminate the requirement of phone companies to lease their phone lines to competitors, effectively cutting the throat of independent DSL carriers such as Covad, and their customers, such as EarthLink, AT&T, Concentric, AOL, and Sprint. The Telecommunications Act of 1996 gave Baby Bells the right to sell long distance service in exchange for opening up their networks to the public. Now the Bush administration are poised to undo this, killing a multibillion dollar industry, and giving monopoly control back to the Baby Bells, who aren't quite so small anymore, thanks to corporate mergers. If you like having all the broadband choices you currently have, you may want to contact the FCC commissioners, toot sweet.
posted by insomnia_lj (38 comments total)

I'm torn between the desire to save independent ISPs and the desire to see AOL snuffed out, once and for all.
posted by mullingitover at 5:18 PM on July 26, 2005

Prior to 1996, the best broadband you could get in this area was ISDN at about $90 a month for businesses, with three month wait times for installation. The phone companies had DSL technology available, but they chose to sit on it. They only started to treat residential broadband like a real business once companies like Covad and Northpoint started doing it. As a result, service offerings increased and prices went down significantly, both for DSL *AND* for cable broadband access.

I used to go through an independent carrier, but now, surprisingly enough, I go through SBC, who gives me a really good deal on the price. I wouldn't have that deal, however, if it weren't for the independent DSL providers. Get rid of them and you get rid of all incentive for these monopolies not to jack up their rates.
posted by insomnia_lj at 5:31 PM on July 26, 2005

I don't see how this is a Bush issue. Honestly.
posted by mathowie at 5:33 PM on July 26, 2005

I usually use Bush if it's an article about something hte Bush administration does.

If you want to remove that issue, by all means, do so. That said, I wish you could define two word issues...
posted by insomnia_lj at 5:37 PM on July 26, 2005

> toot sweet.

Cute.
posted by NewBornHippy at 5:39 PM on July 26, 2005

True, mathowie. Bush has nothing to do with who the FCC head is.
posted by kenko at 5:50 PM on July 26, 2005

It is a Bush issue as long as it's an Administration of Government issue. However, for the sake of useful tags, this is not directly related to Bush and he has not made telecommunication reform a priority. It is unlikely that someone searching for information on Bush would find that tag useful.
posted by chaz at 5:54 PM on July 26, 2005

The Bush administration has generally been in favor of "telecommunication reform" (a.k.a. restoring phone company monopolies), but it's not something you publically prioritize, as it's kind of like publically prioritizing higher taxes or mandatory anal probing.

In other words, it's something that you slip in when the people aren't looking...
posted by insomnia_lj at 6:00 PM on July 26, 2005

Okay great fantastic super, change the tags already then. Can we talk about the issue now?

Who else should be contacted besides the FCC comissioners?
posted by Optimus Chyme at 6:04 PM on July 26, 2005

"Who else should be contacted besides the FCC comissioners?"

Good question. Just four people make the decision as to whether to kill an entire industry or not. Public attention can have a significant impact on FCC decisions, however, as has been seen in the past. Probably the best people you could contact besides the FCC regarding this issue would be your friends and anyone you might know who could bring greater attention to the issue.

It might interest you to know that in the 2004 election, George W. Bush raised more money from the telephone utilities than any political candidate in U.S. history, recieving a total of $528,280 in donations from them, so I would argue that this is a Bush administration issue.
posted by insomnia_lj at 6:16 PM on July 26, 2005

Oh... you may want to contact your senators or congresscritters too, as they often have pull with the FCC board.
posted by insomnia_lj at 6:17 PM on July 26, 2005

If they redefine DSL providers as an information service instead of a common carrier, goodbye speech. The service providers will be responsible for content.

Can you imagine an FCC regulated internet? Think they'll let joe nobody publish a blog or distribute mp3s of his own music?

Of course this will be great for content providers who can afford the new webcasting licenses.
posted by fleetmouse at 6:18 PM on July 26, 2005

I sincerely doubt that the FCC is going to give a shit about what concerned citizens have to say about this.

There's a two-fold problem:
The general public doesn't care about seemingly arcane bits of legislation that only directly affect tech companies. Especially since it's so easy to make a seemingly reasonable argument for the change.

The administration doesn't care what the public, or smaller businesses think of this anyway. They've done more destructive things more blatantly, and there's yet to be any repurcussions.

The only real question is who has the better lobbyists... If Covad and them get their asses in gear, maybe they can get it forever stalled.
posted by mosch at 6:22 PM on July 26, 2005

Sounds like a shakedown for donations from the ISPs.
posted by Potsy at 6:33 PM on July 26, 2005

Looks like I'll be switching to Comcast cable modem immediately if this goes through, since I'm currently with Covad. I'm leery of switching to SBC... though going to Comcast would be no less ironic!

I'll write some letters anyway, though. Competition is better, judging by past results; AT&T was a pretty benevolent monopoly in many ways, but breaking it up did a lot of good over and above lowering long-distance rates, as it fostered technological innovation, with competing tech companies racing each other to get hot new toys like cell phones to market. Definitely sped up the dissemination of the fruits of Moore's law into the hands of the public.
posted by zoogleplex at 6:37 PM on July 26, 2005

"I sincerely doubt that the FCC is going to give a shit about what concerned citizens have to say about this."

If the last few years are any indication, public sentiment might make a huge difference in the outcome.

One of the reasons it is surmised that Michael Powell left as head of the FCC was that he was increasingly unpopular with the public, who started seriously scrutinizing and submitting public comments on FCC proposals for pretty much the first time ever. This made a big difference when Powell supported policies that would've increases the level of media consolidation in this country. The public won that time, and they can win again.

If the ramifications of this issue become widely known, it will reflect badly on both the FCC and the Bush administration, and could result in the premature death of this latest power grab.
posted by insomnia_lj at 6:39 PM on July 26, 2005

". In a series of rulings over the past few years, the laissez-faire-minded FCC has slashed the CLECs' access to the Bells' huge networks."

What exactly is laissez-faire about closed networks for public utilities?
posted by weston at 6:42 PM on July 26, 2005

"Looks like I'll be switching to Comcast cable modem immediately if this goes through, since I'm currently with Covad."

There's no need to switch immediately, as companies like Covad have existing contracts with the Baby Bells to provide service for N number of years. If the legislation passes and these contracts expire, however, then that may be the appropriate time to switch... though there is some speculation that if that happened, companies like Covad may try to go wireless somehow.

To switch earlier would just be punishing them.
posted by insomnia_lj at 6:46 PM on July 26, 2005

The FCC can pretty much do what it wants, but I believe John McCain has had a lot of issues with how the FCC has dealt with the '96 telecom act. Might drop his office a note.

So much for competition I guess.
posted by webranding at 7:12 PM on July 26, 2005

The FCC chair has applauded the "Brand X" decision, which allow cable providers to block competitive access to their networks. What Chairman Martin is trying to do here is expand that to the telcos.

Even if you support the "Brand X" decision (hint: you don't), this is apples and oranges. The phone network was created with significant amounts of public funds. Remonopolizing the phone network with no public accountability is a sweetheart deal for the telcos.

Mathowie, this very definitely is a Bush issue. Chairman Martin is implementing administration policy. If the President wanted competitive access, we'd have an FCC that pursued that policy.

Want to do something about consolidation in the communications industry? Free Press is soliciting comments to file with the FCC.
posted by chipr at 7:50 PM on July 26, 2005

I wish Powell were still around:

Asked at a conference two weeks ago how he can trust the Baby Bells' promises, Powell responded, "I have one rule: I don't trust any companies." He explained that he was focused on the coming transition to digital broadband networks and on pushing "facilities-based" competition. In other words, Powell hopes competitors will build their own networks or employ new platforms such as wireless, cable, and Internet telephony (used by companies such as Vonage). He wants to allow the market to move toward the technological transformation he foresees. The Bells will benefit in the short run, but to Powell that's incidental.

Of course, the best way to fix telecom policy would be to name Andy Kessler czar:

In this day and age, there shouldn’t even be a “phone” business. Communications is 20 years into a digitalization process, and the Bells don’t like it one bit. Real competition actually works. Judge Greene divided Ma Bell geographically back in 1984, and competitive long-distance rates dropped 95% in 20 years. So why haven’t local rates? ...Congress was duped by Reed Hundt into thinking they were getting real competition. The ’96 Act insisted that regional Bells should share their lines with others, and voila, competition. Not so. Tucked in the legalese were pages of gobbldey-gook on how to set prices to share these copper wires—a formula known as TELRIC, total element long-range incremental cost. Rather then use historic costs that with depreciation would likely be close to zero, TELRIC is a fuzzy future cost. Its pie in the sky—the hypothetical cost of stringing new phone lines today.
posted by Kwantsar at 7:58 PM on July 26, 2005

Nice post, Kwantsar.
posted by Optimus Chyme at 8:38 PM on July 26, 2005

btw, my mention of Bush didn't have anything to do with tags, I meant it in terms of the way the post was phrased. Michael Powell was appointed by Bush and if I remember correctly, he was in favor of breaking up phone and cable monopolies and providing a competitive marketplace. What his successor does isn't necessarily carrying out the Bush policy.
posted by mathowie at 8:50 PM on July 26, 2005

the outcome sounds bad for us internet users, but it certainly seems fair and just. Think about it - you're running the biggest paper in your city and theres a law that you MUST lease your presses to competitors? And no offense, but this all sounds rather selfish. "This will be bad for me! Ownership and ethics be damned!"
posted by Tryptophan-5ht at 8:57 PM on July 26, 2005

Belying His Rhetoric, McCain Worked for Megamerger Sought by Campaign Patron AT&T (old link but i've never heard otherwise)
posted by amberglow at 9:13 PM on July 26, 2005

the outcome sounds bad for us internet users, but it certainly seems fair and just. Think about it - you're running the biggest paper in your city and theres a law that you MUST lease your presses to competitors? And no offense, but this all sounds rather selfish. "This will be bad for me! Ownership and ethics be damned!"

Except the printing press was paid for by government funds and its more like having a printing press in everyone's home.
posted by Talez at 9:37 PM on July 26, 2005

its more like having a printing press in everyone's home.
Are they going to buy me a new printer? I might go along with it then.
posted by Balisong at 9:42 PM on July 26, 2005

"a printing press in everyone's home"
doesn't matter one bit.

"Except the printing press was paid for by government funds"
oooh thats different. If that is indeed the case, then i take back what i said. ...but if that is the case - why aren't the lines gov't owned and leased to the everyone? what a mess.
posted by Tryptophan-5ht at 9:44 PM on July 26, 2005

"Think about it - you're running the biggest paper in your city and theres a law that you MUST lease your presses to competitors?"

It's not a question of having the biggest paper in a given city. It's like the government gave you a monopoly to be the only newspaper allowed for a whole region, with the taxpayers helping to pay for your printing press. You, in turn, overcharge them for an inferior product.

Several years later, you come back to the government you're beholden to, asking if you could print a national paper to compete with other companies outside your region. You're granted that right, so long as you allow your press to be used by smaller independent newspapers that want to publish for a small niche market that you're not even serving...

So you agree to this and create a national paper, but you notice that the new, upstart newspapers are starting to do well, have developed a whole new marketplace that you weren't serving, and threaten to surplant your services with some of your diseffected, overcharged customers.

So, you lobby politicians for "press deregulation" until you finally get the right combination of bought politicians to reestablish your monopoly and take away the marketplace that other companies and their stockholders spent billions to develop.

That's what it's like.
posted by insomnia_lj at 12:41 AM on July 27, 2005

Well, that's just peachy. I was one of the first five DSL deployments in my town, using my prior dial-up ISP (who kindly called me and offered me the opportunity to be a paying beta tester) who was reselling SBC service literally years before SBC had there own offering. Not cheap, but very laissez faire. Not only do I get better speed than I pay for, but they told me in no uncertain terms they don't care what I do with my connection, even to the point of explicitly authorizing resale (when I lived in my apartment building). Mind you, I still can't get them to delegate reverse DNS to my static IP, but...

Well, now, yet again this administration and it's appointees have shown that they are happily snuggled away in the pockets of big businesses once again and damned be the consequences of their obsequious toadying. (Not normally a Bush basher on the Blue, but...)
posted by Samizdata at 1:55 AM on July 27, 2005

This is ludicrous. Fuck the government and fuck the FCC.
posted by kjh at 3:48 AM on July 27, 2005

you may want to contact the FCC commissioners

Oh yes, that will be productive. About as productive as printing your comment to the FCC and flushing it down the toilet.

They also note that the FCC received more than 750,000 "comments" on the proposed rule changes, more than 99 percent of which opposed further media consolidation.

The FCC cares fuck all what you, or anyone else in this country thinks. That is, unless you own a large media conglomerate.
posted by shawnj at 5:44 AM on July 27, 2005

It amuses me to no end that the telcos and cable providers, and the left, are taking any of this seriously. 10 years ago broadband was all but unheard of and something like 2 percent of the US had dial-up net access; now broadband is ubiquitous. Does anyone really think that running signals over copper wire is going to be anything but an antiquated parlor trick in another 10 years? These days you can get a cellular net connection with near-cable speeds for around $100/month; that price will drop, WiMax will make things even cheaper, etc. These are the senile last mutterings of a dying industry, folks, don't waste your time fighting it.
posted by IshmaelGraves at 6:01 AM on July 27, 2005

"Oh yes, that will be productive. About as productive as printing your comment to the FCC and flushing it down the toilet."

Actually, all those comments got the FCC to reverse their position regarding radio ownership laws, which weren't changed.
posted by insomnia_lj at 10:19 AM on July 27, 2005

"There's no need to switch immediately, as companies like Covad have existing contracts with the Baby Bells to provide service for N number of years."

Ah, thanks insomniac_lj. That's good to know.

However, I've been considering switching lately anyway, as cable modem would be a bit cheaper... actually SBC DSL would be half the price, roughly, but I'm not sold on the reliability factor; my Covad DSL is thru a dedicated phone line, whereas to switch to SBC would require me to put the DSL on my voice landline. Then again, I'm uncomfortable with giving Comcast too much of my business, considering how they've raised my cable rate pretty much mercilessly and at will...

*grumble grumble*
posted by zoogleplex at 10:37 AM on July 27, 2005

I would like to gut Kevin Martin...

When the fuck are we gonna say "enough is enough" with the ass raping these people have been giving us?
posted by Dreamghost at 11:16 AM on July 27, 2005

It really pisses me off that conservatives are all about free market and stuff but then bend over to allow monopolies to exist and thrive.

Once again I'm convinced that Capitalism is an inherently self corrupting mechanism (i.e. a cancer) that can only consume itself at the expense of long term viability.

Would it be too much to ask that since the Cable and Telco companies have exclusive use of their often municipally funded lines that the government setup their own government run ISPs via the power lines?
posted by aaronscool at 12:20 PM on July 27, 2005

Well, looks like it's gonna a cingular EVDO and a Junxion Box for me. Screw this whole wired thing.
posted by Freen at 1:44 PM on July 27, 2005