Bellsouth raises its rates.
May 4, 2001 12:32 PM   Subscribe

Bellsouth raises its rates. Here's another link to the same basic information. To summarize: "Now that we've used our monopoly ownership of the telephone lines to blow out all the small-fry DSL competitors, we're going to reap the benefits by further screwing our choiceless consumers."
posted by goto11 (22 comments total)
I just signed up with Bellsouth last month.
Hopefuly competitors such as Earthlink and AT&T Broadband (cable) will use the rate hike as an excuse to grab some market share.
posted by darren at 1:01 PM on May 4, 2001

AT&T is raising rates by $5 as well.
posted by @homer at 1:09 PM on May 4, 2001

If there was ever an indication that Americans are docile sheep being herded around by whoreporations, the deregulation of the telecommunications and cable industries is proof. Why am I paying almost $50 per month for local telephone service? Why does basic cable here in new york cost $30/month and up? Why is most dialup ISP service another $20/month?
posted by ParisParamus at 1:10 PM on May 4, 2001

How much do you think you ought to be paying for those services, Paris? Most dialup ISPs are in pretty dire financial shape these days, and there's certainly no lack of competition in that sector. And even DSL is not exactly a cash cow for most (this week's Industry Standard refers to the DSL market as suffering from "dangerously thin profit margins"), though I admit Bell South itself appears to be in a somewhat more comfortable position than most.

More directly, do you think any of these services would be widely available at all if they were all run by the government? Do you not recall how much it cost to have local service and make long-distance calls back when the government made sure AT&T owned the entire system right down to the actual phones in your house?

There's an argument to be made for government oversight, but the tossing around of phrases like "docile sheep being herded around by whoreporations" is just silly.
posted by aaron at 1:38 PM on May 4, 2001

The incessant whining of those continually screwed over by providers of DSL is but static to me as I write the check for another 6 months T1 service. . .
posted by Dreama at 1:46 PM on May 4, 2001

I don't understand why someone isn't offering dialup ISP for something less than, approximately, AOL's $21.95, soon to be $25.95. The reason I feel confident in my unhappiness is that deregulation, for example, of the cable industry, was supposed to lower prices. Yet it has not. Prices have gone up. Actually, I don't have cable, but mom complains...
posted by ParisParamus at 1:59 PM on May 4, 2001

More directly, do you think any of these services would be widely available at all if they were all run by the government? Do you not recall how much it cost to have local service and make long-distance calls back when the government made sure AT&T owned the entire system right down to the actual phones in your house?

Aaron, do you think that the Telecomunications Act of 1996 has resulted in what the FCC states as its goal: "to let anyone enter any communications business -- to let any communications business compete in any market against any other"? The local phone companies, by virtue of having a probably impossible-to-replicate conduit into every home in America (one which was financed by the regulated monopoly status of AT&T) basically have no competitors until the cable companies get it together. I'm not sure that there's a cure worse than the disease here -- and I have to acknowledge that as a shareholder in Verizon dating back to when it was GTE, I personally stand to profit from this -- but do you see this as a problem at all? I'm not trying to pick a fight. "No" seems like a perfectly defensible answer, if one I disagree with. I just want to see if we're playing on the same field.
posted by snarkout at 4:05 PM on May 4, 2001

"whoreporations" is just silly?

I think it's very accurate. Moreover, I am very proud to have coined this term (I think)!
posted by ParisParamus at 4:37 PM on May 4, 2001

How much? I think the most suspicious of the three--cable, telephone, ISPs--is cable. The price of cable service should not have nearly doubled in the last decade (rough figures). If AOL, with all their useless frills is charging $21.95, some sizable player should be able to provide basic dialup for about half that. As for the phone thing, I'm not sure of the answer since local telephone service seems to be a natural monopoly (not sure it can ever be competitive...).
posted by ParisParamus at 4:48 PM on May 4, 2001

The page I linked to above isn't really meaningful, as the FCC didn't write the Telecommunications Act of 1996; here's a lengthy report on the Act. My take is that, for a variety of reasons, long-distance companies never made a move into local markets, and CLECs -- the XOs and McLeods of the world -- were hamstrung by their reliance on RBOC lines and, in most cases, an inability to develop a business model that didn't involve them going out of business once bubble money went away.

Meanwhile, the RBOCs could move into the long-distance business without any actual competition, which was criticized at the time of the Act; in some cases, as few as a dozen customers signing up with competitors will pass muster to get the market designated as "open for competition." The RBOCs like BellSouth, SBC, and Verizon can therefore go after the low-hanging fruit in the long-distance business without actually opening up their core business to meaningful competition.

The transition from regulated monopoly to unregulated (or less-regulated) business with competition seems to be a tricky one for legislators to handle; see the California power debacle for another example.
posted by snarkout at 5:07 PM on May 4, 2001


Consumers have the best choice of all: turn it off.

Wake up, kids. DSL is a luxury. Luxuries cost money. If you can't afford a hundred-dollar-a-month high-speed connection, you probably don't need one. Nobody is forcing you to suck down warez at high speeds. Your life isn't on the line because you can't get faster-than-modem connectivity.

Do without. Go outside, look at trees, revel at the bit-depth of grass, and wonder how the programmers got such vibrant textures mipmapped onto the walls of all the pretty buildings.
posted by Unxmaal at 5:34 PM on May 4, 2001

Unxmaal: that's an awfully lame economic argument.
posted by ParisParamus at 5:57 PM on May 4, 2001

These services are expensive because it's expensive to run them. Yes, the DSL business model was a faulty one, but it doesn't change the fact that these companies had to build out to brand and gain market share. Unfortunately, when the financing ran out, they were left holding network buildout costs.

It's not like Verizon, SBC or BellSouth had to do much to put their "competition" out of business. In most cases, the CLECs did it themselves. The opening investment was simply too much to make back in a business where competition is so tight.
posted by dogmatic at 6:34 PM on May 4, 2001

And the reason that the RBOCs are in the catbird seat is that they own assets built by AT&T when it was a regulated monopoly. Barring that status, I'm not sure companies can afford last-mile buildout; I'm not sure cable companies could do it either.

But yeah, I'm don't think that more than one or two of the CLECs were capable of making it as going concerns even if the RBOCs had been the sweetest, friendliest competitors on earth.
posted by snarkout at 6:53 PM on May 4, 2001

Like with cable, there's not much competition. If the markets were truly opened up (and not consolidated) the prices would go down and the corps would make moolah (see long distance phone service)
posted by owillis at 7:30 PM on May 4, 2001

Yes it is a luxury. No arguing with that. Not happy about the price hike from AT&T Broadband. Thinking of canceling the TV part of it, but then they hit you with an increase of $10 as well as the $5 hike in rates. I wish there was an option to them, but they are they only game in town where I live in Mass. So I pay, and pay, and pay.
posted by a3matrix at 5:58 AM on May 5, 2001

Wake up, kids. DSL is a luxury. Luxuries cost money.

DSL isn't a luxury to me -- working in a home office at 28.8 when DSL wasn't available cost me a lot of money in lost time (certainly more than $45/month, BellSouth's new rate).

Dreama: How much are you paying for T1 service, and is it coming into an office or a house?
posted by rcade at 6:27 AM on May 5, 2001

Sure, we'd all like things cheaper. But in relative terms, I feel I'm getting a bargain. In late 1996, I was paying a combined total of $76.95 per month to have 33.6 dialup access, and a hosted domain with 20 MB of web space. Today I pay $79.95 per month for access 25 times as fast, and a hosted domain with 15 times as much web space.

Not bad for three bucks more per month.
posted by PhotoDude at 10:40 PM on May 5, 2001

Yeah, five years ago the company I worked for was paying two grand a month for a fractional T1. I have more bandwidth than that to my house for $40 a month. For $200 a month I could have the DSL equivalent of a full T1. (Okay, okay, outbound would be half T1 speed. But still.) My first personal account was a 14.4 shell account at $30 a month. Geez, I couldn't even get the Web on that! Well, not in any form I'd want it, anyway.

The overall cost trend continues to be downward. You can't judge the cost of Internet service by what AOL or any other big national ISP charges; their customer acquisition and support costs are enormous. There are still plenty of small dialup providers around. My mom pays $15 a month for Internet access in BFE, Ohio. Probably run by a guy who just wants a T1 to his house and sells just enough accounts to people in the nearby hills to pay for it.
posted by kindall at 12:21 AM on May 6, 2001

Like with cable, there's not much competition.

Cable is facing pretty stiff competition from satellite TV services, actually, and none of the major cable providers own a piece of that business. An FCC ruling a couple of years ago allowed even people in multi-family dwellings to have DBS dishes; I have a DirecTV dish at my apartment. Only a cable operators offer digital cable TV (mostly the same ones that have cable Internet), which is what's truly needed to compete with the satellite providers.
posted by kindall at 12:31 AM on May 6, 2001

Only a cable operators

Only a few cable operators. Kindall, you moron.
posted by kindall at 12:33 AM on May 6, 2001

Kindall, it's not applicable to the discussion of the situation in the U.S., but Shaw Communications, one of Canada's two largest cable companise, owns Canadian Satellite Communications. When the News Corp. buys Hughes Electronics from GM, they may well attempt to inflict a hurting on the cable companies by starting a price war, which is all for the good for consumers, but I'm doubtful about how much long-term effect this will have.
posted by snarkout at 11:50 AM on May 6, 2001

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