August 5, 2005 12:54 PM PDT

FCC changes DSL classification

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was necessary as a result of Brand X, but that he'd personally watch to make sure that the consequences of this new policy match the intended results.

"I hope next year the commission will put its money where its mouth is to see if the assumptions yield the results," he said. "And if it doesn't, I hope it will admit that and take appropriate action. I'll be keeping tabs."

One thing is certain: The new rules will have the greatest impact on ISPs, such as EarthLink, which rely on other companies' infrastructures to provide Internet services to customers.

Independent ISPs have been struggling for a while and today represent less than 10 percent of all DSL lines in the U.S., according to Dave Burstein, the author of DSL Prime Newsletter. Part of the problem is that it is difficult for independent service providers to compete on pricing.

For example, EarthLink, the largest of the independent ISPs charges $39.95 for its 1.5mbps download/384kbps upload service over Verizon's infrastructure. Verizon Communications offers the same service for $29.99 with a one-year contract. And some customers who live within a certain distance of Verizon's central office can get download speeds of 3.0mbps and upload speeds of 1.5mbps for the same price from the Bell.

"Wholesale pricing leaves so little margin even AOL couldn't survive, and MSN gave up on broadband as well," Burstein said in an e-mail. "The ones that remain can't beat Bell prices, and have so little added value they haven't attracted enough customers to have an impact."

The fate of the independent ISP is still unknown, but companies such as EarthLink say there is still room in the market for them. Despite the fact that their services are often more expensive than services from the Bells and cable companies, some 1.5 million DSL and 500,000 cable customers are still choosing EarthLink as their Internet service provider. In fact, customers ranked EarthLink No. 1 in a September 2004 customer-satisfaction survey of broadband users conducted by J.D. Power and Associates.

"The FCC has preserved DSL access for the next year," said Dave Baker, vice president of law and public policy for EarthLink. "And beyond that we are confident we will extend existing commercial relationships with the Bells to offer our service. We already have commercial arrangements with all of them and some of the cable companies."

EarthLink is also exploring alternative broadband transmission technologies too. It has already been involved in several trials using electrical power lines to deliver broadband service. Wireless technologies such as Wi-Fi and WiMax may also provide the necessary connectivity for ISP customers.

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This is Insane
DSL is already cheaper than cable in most markets. In my area it's $15 versus $70 for cable. The RBOCs don't seem to be having much trouble being price competative. All this does is further entrench the existing duopoly.
Posted by (2 comments )
Reply Link Flag
But...
Cable Internet also tends to be faster :)
Posted by 201293546946733175101343322673 (722 comments )
Link Flag
Less Competition Is A Bad Thing!
One of the reasons DSL is cheaper than Cable Internet access is the competition found in the DSL marketplace. Cable competes against no one else in the cable marketplace for Internet access. DSL has competition, giving the customer the benefit.

I dont buy for a second that this will allow for better technological advancement, as the SBC official stated in the story. The competition in DSL sure hasnt stopped Verizon from laying down FTTH.

It would not surprise me at all to see the price of DSL go up when the transition period is over. Thanks FCC!
Posted by cliffsk (1 comment )
Reply Link Flag
If Verizon is laying FTTH.
... and I can get it, why would I care what happens to DSL?????
Posted by Earl Benser (4310 comments )
Link Flag
So long, Earthlink...
... and Covad and all the others that offered some price competition. The logic of this decision escapes me. The RBOCs are still benefiting from the remains of the AT&T monopoly that built out their networks. Why not hold them to fair-access rules on the copper line network?
Posted by Betty Roper (121 comments )
Reply Link Flag
Earthlink won't go away...
Earthlink has contracts for big blocks of DSL service from the
telcos. Those contracts will remain in effect. But the peanut gallery
ISp's won't get the discounted price any more - they don't provide
enough traffic.
Posted by Earl Benser (4310 comments )
Link Flag
HAhahahahhahhhaaaahh HH Aa
<p>
<font color="#FF0000">The result, they say, will be lower prices
and more choice for consumers as well as higher penetration rates
of DSL into communities
</font><font color="#000000"><p>
Do they <b>REALLY </b>think is will be the case ? Who are they
<b>KIDDING ? ?</b></font>
Posted by jltnol (85 comments )
Reply Link Flag
HAhahahahhahhhaaaahh HH Aa
The result, they say, will be lower prices and more choice for
consumers as well as higher penetration rates of DSL into
communities
<p>
Do they REALLY think is will be the case ? Who are they KIDDING ? ?
Posted by jltnol (85 comments )
Reply Link Flag
LESS and MORE...
So, playing WORD-GAMES, and refusing to admit that the INTERNET is a communications-medium (EXCEPT when the government wants to tap your PRIVATE communications, or the government wants to USE the "internet" as an EXCUSE to CENSOR TV by stating that citizens can always "...turn to the Internet") is going to help American-consumers..?

And, somehow, this will CREATE competition, ...by CRIPPLING small-businesses ability to COMPETE-EFFECTIVELY..?

BULLSH*T...

I AM SO SICK OF THIS BLATANTLY-OBVIOUS GOVERNMENT-CORRUPTION.

Sorry, I just had to vent my absolute exasperation.
Posted by Had_to_be_said (384 comments )
Reply Link Flag
You're all missing the point...this is the right thing to do
Look, the bell companies have been unfairly forced to share their broadband networks with greedy ISPs. Cable doesn't have to do this, so why should DSL providers? The bell companies, like the cable companies, shelled out the billions of dollars to build these broadband networks, why shouldn't they be allowed to keep them private? Would you like it if you spent thousands on building your dream hot rod and the police came in and said that you had to let me drive it? You would tell me to build my own hot rod. Well, thats exactly what the ISPs should do. Don't have the resources? Guess they are out of luck. Its time for the independant ISP to die anyway. Leave it to the pros who engineered the Internet in the first place. DARPA may have invented the Internet, but it was the bell companies that developed the nationwide infrastructure to make it work.

Not to mention, the independant ISPs in most cases are a poor choice for service anyway. The increased cost provides for ABSOLUTELY NO VALUE. The Northern California city in which I live has several small ISPs that offer DSL, but are absolute idiots. They charge much more for NOTHING other than going through their inferior service and upstream bandwidth. Go direct with SBC and you have not only great service, but their direct link to several NAPs and MAEs. To say nothing of the incompetance of the local ISPs when it comes to network engineering and tech support being offered by high school graduates that are doing nothing more than turning flip cards or searching online knowledge bases applying "fixes" with absolutely no skills to back up their work.

The bottom line is that the bells shelled out the money to build these networks. They shouldn't be required to share them with anyone. At least, until they make their money back on their investment. Until now, the bells had no incentive to deploy DSL in large quantities because they were just going to lose money on them when the other ISPs started reselling the network. Now, DSL will finally be pushed to the forefront and the coming inprovements in copper and fiber will push DSL speeds into the 10-20Mbps range. Cable will too, but DSL will be first. Its already here. You just haven't seen it because the bells haven't turned it up yet. Just wait...
Posted by thenet411 (415 comments )
Reply Link Flag
Agreed...
I have to agree with you. The telco's have been forced to subsidize their competitors at below cost prices, and not in just DSL but wireline voice as well. As for tech support, SBC's Teir 1 support is in India, and they use flip cards too. Once you get to Teir 2 support, then you have a real tech to answer questions.
Posted by Maelstorm (130 comments )
Link Flag
DO NOT FORGET A VERY BASIC FACT...
"Telephone companies" operate under FCC control for a very specific reason. The telephone-infrastructure is a "public-concern". It is NOT entirely private as some keep alluding to.

The fact is that "telephone companies" use Public-property, using Public-easements under Public-authority, and often, one way or another, receive Public-funding.

In short, for simplicity, they function as a "privatized public-utility", ...not merely a "private-enterprise". This "Private-company" myth, which is being fostered here, is intentionally being misused to allow exactly this kind of FRAUD, and MANIPULATION to be committed against genuine Public-interests.

As a, governmentally created monopoly, they [phone companies] have certain obligations to "Public-interests", such as allowing the possibility of COMPETITION.

And, also DO NOT FORGET, that the current "FCC", first, had to jump through legalistic, and semantic, HOOPS to claim that established "Cable companies" did not have to share reasonable-access to such "public-resources", in order to be allowed to maintain their respective business-monopolies.
Posted by Had_to_be_said (384 comments )
Link Flag
consumers paid for the lines
the bells did not pay to build the lines. the u.s. government gave att a monopoly on building out the network and gave them price protection by which it allowed them to charge enough to cover their expenses PLUS a guaranteed profit and protection from competition. this means that the building of the network was built with subsidies by the taxpayers. att made billions of dollars of money during its decades of protected existence.

this argument against regulation is self-refuting because the bells are protected from competition by government REGULATION! only they can build copper lines to people's home, REGULATIONS prohibit others from doing so. so stop with this orwellian double-speak already...
Posted by (4 comments )
Link Flag
Wow, completely wrong conclusion by FCC.
Quote: "The Universal Service Fund is one of the pillars of the Telecom Act," said FCC Commissioner Michael J. Copps. "And I wouldn't be party to an agency that would abandon it."

Ah, it's all about preserving an illegal tax on the American consumers. I dunno about you, but when the FCC mismanages the USF so badly that they lose billions of dollars in the mild attempt to broaden Internet access to rural poor, it demonstrates a decidedly unqualified ability to get more money to 'lose'.

And by lose, I mean 'give to their friends'.

The real victory would have been to force cable operators to share their lines. This ridiculous parallel build-out of copper to homes is becoming retarded. How many of these lines does the FCC really think I can handle coming into the house? Are they really trying to promote competition, or grab nice landing spots after an FCC career with some of these corporate parasites?

The FCC is dropping the ball, badly. I want one line into my house. Period. And I should be able to choose *any combination* of cable, telephone, video, ISP access over that one wire. It's really not that difficult, except for the unnecessary legislation encumbering a logical progression of tech.

Well, make sure six year-olds can't hear dirty words at 11pm on cable. That, the FCC can handle. Chimpanzees.

-R
Posted by Remo_Williams (488 comments )
Reply Link Flag
Hey, good idea!
I can see it now - real comepetition in phone and cable! Since SBC won't allow others to use their poles, and we'll finally have real competition, they MUST be figuring on giving us at least five or ten new sets of TELEPHONE POLES! What a great idea, each one carrying copper or fiber to a customer along the road.

Or for underground lines (sorry, I'm rural and we have poles) we can have five or ten easements! Think of all the newly-employed BACKHOE OPERATORS! And "Oops, I cut their lines" would happen all the time!
Posted by (58 comments )
Link Flag
I can understand their point
The phone companies spend alot to maintain those phone lines, why should they have to share them if cable doesn't? They figure that if they have to share everything thing with their competition, why bother to upgrade. My cable drop has been replaced several times in the last 10 years, my phone line was here when I moved in 17 years ago. The phone companies are not going to spend the money as long as their forced to share. Can you imagine if McDonalds was forced to sell Burger King?

<a class="jive-link-external" href="http://jmaximus.blogspot.com" target="_newWindow">http://jmaximus.blogspot.com</a>
Posted by jmaximus9 (86 comments )
Reply Link Flag
Specious Argument About Innovation
The argument about innovation being held back because the Bells had to share their lines is just bunk. The fact that independent ISPs like Earthlink only have 10% of the market indicates this was not a level playing field anyway. And were the Bells so blinded by this fear that they just ignored the cable industry as a competitor? No. What really lit a fire under them is the unrelenting loss of subscriber lines to alternatives like cellular and cable.

I think the real problem today stems from the way that phone deregulation was implemented. In hindsight, it would have been better to break up Bell between the physical lines the the service provided over the lines. The line from your house back to the central office should have been regulated. Everthing else should have been deregulated. The split between local phone service (regulated) and long distance (deregulated), caused the mess that we have today. If just the lines had been regulated and everything else made a free-for-all then we would have had a lot of new players and real competition. Instead, we just have this duopoly between cable and local exchange carriers. Two sets of poles. Two sets of wires.
Posted by Stating (869 comments )
Reply Link Flag
Not what I wanted to hear
Before I moved I had DSL with a third party provider and loved it! Qwest would not allow me to run a home server and wouldn't give me any fixed IP's. The ISP I used allowed servers hosted DNS for me and gave me * static IP's. When I moved I had to go to cable and now I can no longer run a home server and have no fixed IPs. Sure I have faster downloads but so what I don't steal movies and music so what do I care if I have 1.5Mb down or 4Mb down. With this ruling even DSL won't be able to provide this option because only private ISP's were doing it before. This is going to mean the death of a lot of small ISP's and really give the consumer no choice about where he gets his broadband. Personally I think at least some of the motivation for this was to make it easier for the government to access service prover records. Now they wont have to deal with a whole buch of small ISP, just one big megacorp.

Oh well, I am glad I no longer work for an ISP.
Posted by (1 comment )
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