Re: What do we mean when we say "competition?"

[Henry Yen]

On Sat, Nov 26, 2005 at 07:53:32AM -0500, Robert E.Seastrom wrote:
> Henry Yen <[EMAIL PROTECTED]> writes:
> > In (at least) the Long Island, NY market, Verizon FTTH/FIOS installers
> > physically cut and decommission the copper upon fiber install.
> > Bye-bye DSL competition.  Since they won't bring back the copper
> > even you don't like the FIOS service, it's permanent.  ISTR that
> > the fiber doesn't carry the same restrictions on Verizon as copper
> > did, which is a big incentive (for them) to roll out FIOS that way.
> 
> My understanding is that there is a fairly small number of pots
> circuits (2?) that they can bring in over the B-PON, and that moreover
> ISDN BRI and hicap (eg. repeatered or HDSL DS1 service) are entirely
> incompatible.

In this market, it's four.

> In Virginia, there's anecdotal evidence that suggests that they'll
> leave the copper upon request, and won't even try to remove it if you
> still need it for service.
> 
> Guess you know what to do.  :)

Complain louder?   I have more than four POTS lines, and Verizon's
response was "then you can't have FIOS" (even after offering them to
pay for an additional phone line on top of the FIOS service).
There's anecdotal evidence in this market that they will absolutely
refuse to do FIOS unless the existing copper is cut (in my case, since
they can't do that, they simply refuse to allow FIOS).  Ironic, as the
FIOS OC-12 runs through my backyard, about 45 feet from the house...

--
Henry Yen   Aegis Information Systems, Inc.
Senior Systems Programmer   Hicksville, New York

Re: What do we mean when we say "competition?"

[Sean Donelan]

On Sat, 26 Nov 2005, Robert E.Seastrom wrote:
> My understanding is that there is a fairly small number of pots
> circuits (2?) that they can bring in over the B-PON, and that moreover
> ISDN BRI and hicap (eg. repeatered or HDSL DS1 service) are entirely
> incompatible.

Circuit Emulation Services (CES) have been offered by both cable and
telephone companies for serveral years.  Some cable companies use
CES to provision ISDN, T1, T3, etc circuits over their coaxial plant.
Cable companies may be doing this only for their "high-value" customers.

Telephone companies can use similar CES technology to provision circuits
over FTTx or other local loop facilities.  Some carriers have completely
converged core networks now, so your circuit services may already be
using CES.  Carriers (or their vendors) think operating a converged
network will be less expensive, and are trying to push the convergence
closer to the customer edge.

Have you noticed Comcast and other cable companies are increasing their
video rates by up to 7% starting January 1, but not the price of voice or
data services, even though they use the same coaxial cable for all three
services?

Re: What do we mean when we say "competition?"

[Steve Sobol]

Owen DeLong wrote:
VZ certainly shouldn't remove any copper that doesn't belong to VZ.  So, 
unless they are the ILEC in Apple Valley


They are the ILEC in Apple Valley.

--
Steve Sobol, Professional Geek   888-480-4638   PGP: 0xE3AE35ED
Company website: http://JustThe.net/
Personal blog, resume, portfolio: http://SteveSobol.com/
E: [EMAIL PROTECTED] Snail: 22674 Motnocab Road, Apple Valley, CA 92307

Re: What do we mean when we say 'competition?'

[Frank Coluccio]

In some areas VZ will leave the copper in place if you simply ask, and in some
places you must forcefully "insist." 

I'm aware of a case in the Tampa area where a subscriber had to "insist." While
he did wind up keeping his POTS lines intact, while adding a second feed in the
way of fiber for Internet access (and video, if it ever gets/got there?), alone,
he advised me that this involves maintaining two accounts with Verizon. And
naturally, this means two monthly bills, as well. One bill will be for the FiOS
service(s), which is(are) the Internet and TV service being offered by
Verizon.net, and the other account (the subscriber's original account) for 
POTS. 

If you suspect that the telco in doing this is merely trying to keep its 
business
functions separated along the lines of switched circuit vs. IP, and for all of
the regulatory reasons having to do with positioning that that implies, then
you'd be 100% correct.

Frank A. Coluccio
DTI Consulting Inc.
212-587-8150 Office
347-526-6788 Mobile
---

> In (at least) the Long Island, NY market, Verizon FTTH/FIOS installers
> physically cut and decommission the copper upon fiber install.
> Bye-bye DSL competition. Since they won't bring back the copper
> even you don't like the FIOS service, it's permanent. ISTR that
> the fiber doesn't carry the same restrictions on Verizon as copper
> did, which is a big incentive (for them) to roll out FIOS that way.

My understanding is that there is a fairly small number of pots
circuits (2?) that they can bring in over the B-PON, and that moreover
ISDN BRI and hicap (eg. repeatered or HDSL DS1 service) are entirely
incompatible.

In Virginia, there's anecdotal evidence that suggests that they'll
leave the copper upon request, and won't even try to remove it if you
still need it for service.

Guess you know what to do. :)

---rob

Re: What do we mean when we say "competition?"

[Owen DeLong]

VZ certainly shouldn't remove any copper that doesn't belong to VZ.  So, 
unless

they are the ILEC in Apple Valley, that may or may not be an issue.

Owen


pgpYRQjKGEHor.pgp
Description: PGP signature

Re: What do we mean when we say "competition?"

[Deepak Jain]

Robert E.Seastrom wrote:

My understanding is that there is a fairly small number of pots
circuits (2?) that they can bring in over the B-PON, and that moreover
ISDN BRI and hicap (eg. repeatered or HDSL DS1 service) are entirely
incompatible.

In Virginia, there's anecdotal evidence that suggests that they'll
leave the copper upon request, and won't even try to remove it if you
still need it for service.



I can verify that they will leave it if you ask them to. At least in 
Maryland. Though I told them to remove it.


If I want copper service again, I can just order some services that they 
can't deliver over FIOS yet and solve the problem that way. It might be 
more fun to do that... come to think of it.


What is REALLY interesting is that they will suggest to Cable folks (who 
only use the internet service) that they can get Comcast to remove any 
aerials they have if they are done with Comcast service. You can imagine 
the negative revenue created by that kind of activity.


Deepak Jain
AiNET

Re: What do we mean when we say "competition?"

[Robert E . Seastrom]

Henry Yen <[EMAIL PROTECTED]> writes:

> In (at least) the Long Island, NY market, Verizon FTTH/FIOS installers
> physically cut and decommission the copper upon fiber install.
> Bye-bye DSL competition.  Since they won't bring back the copper
> even you don't like the FIOS service, it's permanent.  ISTR that
> the fiber doesn't carry the same restrictions on Verizon as copper
> did, which is a big incentive (for them) to roll out FIOS that way.

My understanding is that there is a fairly small number of pots
circuits (2?) that they can bring in over the B-PON, and that moreover
ISDN BRI and hicap (eg. repeatered or HDSL DS1 service) are entirely
incompatible.

In Virginia, there's anecdotal evidence that suggests that they'll
leave the copper upon request, and won't even try to remove it if you
still need it for service.

Guess you know what to do.  :)

---rob

Re: What do we mean when we say "competition?"

[Henry Yen]

On Wed, Nov 16, 2005 at 08:58:45AM -0800, David Barak wrote:

[ snip ]

> Anecdote: A co-worker is getting Verizon FTTH, and
> they have to dig about a 3/4 mile trench to his house
> (he's rural).  He's not being charged for the
> installation, even though it'll be several years
> before it pays for itself.  It's hard to see that as
> an example of a {big | evil} monopoly which is hurting
> consumers.

In (at least) the Long Island, NY market, Verizon FTTH/FIOS installers
physically cut and decommission the copper upon fiber install.
Bye-bye DSL competition.  Since they won't bring back the copper
even you don't like the FIOS service, it's permanent.  ISTR that
the fiber doesn't carry the same restrictions on Verizon as copper
did, which is a big incentive (for them) to roll out FIOS that way.

-- 
Henry Yen   Aegis Information Systems, Inc.
<[EMAIL PROTECTED]>Hicksville, New York

RE: What do we mean when we say "competition?"

[David Schwartz]

> So... Microsoft has a monopoly on Windows and the basic OS costs
> you $299 with virtually no server capabilities.
>
> In the POSIX-style OS world, where you have multiple competitors,
> prices range from $0 to $179.

Either these products are comparable or they are not. If they are
comparable, then Microsoft has no monopoly and the prices are low, as low as
$0. If they are not comparable, then the fact that one is cheaper says
nothing.

> True, but, this one does.  There are multiple ways to skin a cat,
> and, multiple versions of Windows pricing.  Any way you slice it,
> MicroSoft remains the most expensive OS in the market.
> Everyone elses OS prices have come down since the days of Win 3.1,
> Microsoft's have gone up (about 600% -- $49 to $299).

Which proves that Microsoft has been *unable* to keep prices high. OS
prices have fallen despit Microsoft's effort to keep prices high.

> > Microsoft hardly has a monopoly on servers.  If their
> > prices are too high, use something else.

> Microsoft has a monopoly on Active Directory servers.
> Microsoft has a monopoly on Exchange servers.
>
> If you are unfortunate enough to need either of these things
> (I thank my lucky stars every day that I am not), you have to
> buy them from Micr0$0ft.

Every company has a monopoly on its proprietary technologies. If you 
need
either of them, thank your lucky stars Microsoft makes them available to
you.

> Agreed.  Instead of granting further monopoly positions and first-arrival
> advantages and again allowing the first provider into the market to
> prevent all future comers, let's avoid the fight and separate the
> LMI from the overlying service.

Except it may be that the right and best business model is combined LMI 
and
overlying service. It may be that some infrastructure is too expensive to
provide without the added revenue from an overlying service monopoly.

What is your solution to that problem? Subsidy? Or live without?

> If you limit it to the scope I speak of, you are limited to an area where
> very little innovation has occurred in the last 50 years, or, is likely to
> occur in the next 50.  Category 3 UTP hasn't changed in more than
> 50 years.
> Fiberoptics date back to the 1840s with singlemode being
> introduced in 1961
> and adapted for telecommunications in 1966 and it's current form being
> perfected around 1970.  75 ohm TV Co-Ax has also been pretty standard
> for a very long time (RG58 is, I believe, the most common)

I think this is a deceptive argument. There has been lots of innovation 
in
last miles. Fiber to the home, IP over powerline, wireless, over cable, via
satellite, and so on. A subsidized way of doing the last mile could damage
this innovation. And I don't think you can regulate without subsidizing.
(See my other posts for the arguments why regulation will compel either
subsidy or shortage.)

> Given universal household access to singlemode, UTP3, and RG58, I don't
> believe
> there is a single terrestrial facilities based communications service
> available
> today that would be impossible (obviously, the current cost of
> DWDM hardware
> and supporting backbone equipment makes OC-192 to the home impractical
> today,
> but, not impossible given the facilities above).

And if you decide that what we have today is good enough and compel or
subsidize it, then there will be no reason to develop newer technologies.
This is looking at where we are and ignoring how we got here.

> I cannot deny that there is a possibility someone will come up with some
> super-innovative media for terrestrial facilities-based transmission, but,
> I can say that there is very little effort being put into such research
> at this time because single-mode fiber is so economical at this point that
> nobody really feels there is a need for or significant benefit to such
> an improvement.  Were a compelling new media to come along, I'm sure that
> someone would deploy it.

If it's so economical, why can't five companies bring it to my house? 
How
can you argue it's super-economical and a natural monopoly because of
expense at the same time? How do you know that the alleged natural monoply
isn't a technical problem with a solution around the corner?

> Bottom line, we have achieved market competition and fair access to all
> other portions of the network.  LMI at layer 1 has proven to be the sticky
> wicket that remains a natural monopoly no matter how hard we try to change
> that.  As such, I think it is time to accept the fact and deal with it
> accordingly, instead of continuing to allow it to preserve destructive
> monopolies in other areas.

In other words, single-mode fiber to the home is *NOT* so economical.

It is funny how the advocates of regulation always have to argue both 
sides
of every issue to try to find some traction. "Monopoly means higher prices."
But the prices are lower. "Well then, monopoly means lower price

Re: What do we mean when we say "competition?"

[Matthew Crocker]

Windows 98 price (in 1997) -> $209
Office 97 Standard (in 1997) -> $689
Windows XP price (now) -> $199.
Office 2003 (now) -> $399.



Verizon Retail 768k DSL,  $14.95/month (includes everything)
Verizon Wholesale 768k DSL, $13.95/month + DS3 ATM + IP + support + e- 
mail
Verizon CLEC 2W DSL Conditioned loop,   $15-18/month + COLO + DSLAM +  
Backhaul + IP + Support + e-mail


You can't say that Verizon isn't selling DSL below their cost and  
using monopoly POTS revenue to subsidize the extermination of  
competition in the DSL market.


Now, granted the CLEC can use the 2W DSL conditioned loop to run ADSL2 
+ and POTS and sell for more  $$.  Unfortunately in todays era of  
Wal*mart shoppers people buy on price alone.



The problems most people have with microsoft's
monopoly status have nothing whatsoever to do with the
price of the software which forms the basis of their
monopoly (windows + office), but rather their
willingness to use the profits from them to subsidize
other losing ventures to drive out other competitors.


Exactly,

Verizon is using the profits from the monopoly to subsidize losing  
ventures


-Matt

--
Matthew S. Crocker
Vice President
Crocker Communications, Inc.
Internet Division
PO BOX 710
Greenfield, MA 01302-0710
http://www.crocker.com

Re: What do we mean when we say "competition?"

[Owen DeLong]

--On November 16, 2005 9:25:29 PM -0800 David Barak <[EMAIL PROTECTED]> 
wrote:






--- Owen DeLong <[EMAIL PROTECTED]> wrote:



> Windows 98 price (in 1997) -> $209
> Office 97 Standard (in 1997) -> $689
> Windows XP price (now) -> $199.
> Office 2003 (now) -> $399.
>
> Want to try that again?
>
Yes... Here's some more accurate data:

Windows 3.1 price $49
Windows 3.1.1 price $99
Windows 95 (Personal) price $59
Windows 98 (Personal) price $99
Windows ME (Home) price $99
Windows NT WS price $99
Windows 2000 Pro price $299
Windows XP Pro Price $299


Just because I didn't quote the emails from my history, does
not mean these are not accurate.  These are
the list prices quoted by vendors of M$ products over the years
in my mail history file.  It's not an assertion, it's actual data.
True, they are not the "street" or "discounted" prices, but,
they are the MSRP.


So it goes from 209 to either 199 or 299 depending on
whether you want "home" or "pro."  That's hardly an
egregious markup for a better OS, several years later.


Without getting into the argument about which version of
Windows is or is not an improvement, it's certainly the
most expensive OS in the market today:

MacOS X: $99 (List) -- Includes HTTP, DNS, DHCP servers and
other basic essentials like SMTP and LDAP servers, etc.
http://www.apple.com

Windows XP Pro $299 (List) -- Includes HTTP (sort of), but,
no ability to be DNS, DHCP, SMTP, or, LDAP server without
additional software.
http://www.microsoft.com (pricing link)

Solaris x86 $49.95 (CD) -- $9.95 DVD, $0 download
http://www.sun.com (downloads->get solaris 10) Full Server
or desktop Version

Red Hat Enterprise Linux Basic $179 -- Includes all Server
software, but, missing some GUIs for managing, limited support.
http://www.redhat.com/en_us/USA/rhel/compare/client

Fedora Core $0 -- Full server/desktop version
http://fedora.redhat.com

FreeBSD $0 -- Full server/desktop version
http://www.freebsd.org

So... Microsoft has a monopoly on Windows and the basic OS costs
you $299 with virtually no server capabilities.

In the POSIX-style OS world, where you have multiple competitors,
prices range from $0 to $179.

Next?


I was doing a similar apples-to-apples comparison.
Look, just accept that not all data points will line
up with your assertions - find some others instead.
If there are so many, then there have to be better
examples than these.


True, but, this one does.  There are multiple ways to skin a cat,
and, multiple versions of Windows pricing.  Any way you slice it,
MicroSoft remains the most expensive OS in the market.
Everyone elses OS prices have come down since the days of Win 3.1,
Microsoft's have gone up (about 600% -- $49 to $299).




Finally, the price of the client software is
actually not the primary
problem with M$ monopolistic pricing.  It is the
back-end software
where they really are raising the prices.  Compare
NT Server to
2K or XP Server or Advanced Server.  XP AS is nearly
double 2000 AS
last time I looked.


Microsoft hardly has a monopoly on servers.  If their
prices are too high, use something else.


Microsoft has a monopoly on Active Directory servers.
Microsoft has a monopoly on Exchange servers.

If you are unfortunate enough to need either of these things
(I thank my lucky stars every day that I am not), you have to
buy them from Micr0$0ft.




> The argument regarding ILECs is reversed.  I
> appreciate the citation of Standard Oil, but it is
a
> fallacy to think that there is a one-to-one
mapping
> between SO and any/all of the ILECs.
>
True.  What is the point?


Standard Oil is a strawman argument.  The ILECs are
dissimilar in nature and behavior from Standard Oil.
An assertion otherwise requires evidence.


I think that the anti-competitive behavior of SBC and that
of SOCA are, indeed, very similar.  If you prefer a more
similar example, we can compare Comcast and SBC, or, perhaps
you would prefer to compare Pacific Bell and US West (prior
to them all becoming part of SBC).

Pick your poison, there's certainly a record of anti-competitive
practices available.


"History doesn't repeat itself.  Historians do."
-unknown (to me at least)


Unknown and untrue... History is replete with examples of history
repeating itself.  In many ways, WWI and WWII are examples of history
repeating itself.  Korea, Viet Nam, Iraq are examples.  Sure, slightly
different results, but, if you roll dice more than a couple of times,
you usually get different numbers, too.  Many Many Many similarities
in costs, casualties, efficacy, etc.

If you want closer examples:  US Involvement in Viet Nam vs. Soviet
involvement in Afghanistan.  VERY similar results all the way around.


Don't fight the last war, and especially don't fight
it in a way which will impede future innovation.


Agreed.  Instead of granting further monopoly positions and first-arrival
advantages and again allowing the first provider into the market to
prevent all future comers, let's avoid the fight and separ

Re: What do we mean when we say "competition?"

[David Barak]

--- Owen DeLong <[EMAIL PROTECTED]> wrote:

> 
> > Windows 98 price (in 1997) -> $209
> > Office 97 Standard (in 1997) -> $689 
> > Windows XP price (now) -> $199.
> > Office 2003 (now) -> $399.
> > 
> > Want to try that again?
> > 
> Yes... Here's some more accurate data:
> 
> Windows 3.1 price $49
> Windows 3.1.1 price $99
> Windows 95 (Personal) price $59
> Windows 98 (Personal) price $99
> Windows ME (Home) price $99
> Windows NT WS price $99
> Windows 2000 Pro price $299
> Windows XP Pro Price $399
> 
> If you're going to use list prices, use list prices
> all the way through.
> The above represent, to the best of my knowledge, M$
> retail pricing for
> the lowest level of their "client" version of their
> OS available at
> the time.

You're mistaken.
http://www.theosfiles.com/os_windows/ospg_w98.htm
http://www.microsoft.com/products/info/product.aspx?view=22&pcid=a9d2c448-eb05-4a2b-a062-9c711c533e0c&type=ovr
http://www.theosfiles.com/os_windows/ospg_wxp_pro.htm

So it goes from 209 to either 199 or 299 depending on
whether you want "home" or "pro."  That's hardly an
egregious markup for a better OS, several years later.


> 
> I confess I haven't followed pricing on M$ Office,
> but, I'm willing to
> bet that an apples-to-apples comparison would reveal
> similar results.

http://www.computerwriter.com/archives/1997/cw230197.htm#prices
http://www.microsoft.com/office/editions/howtobuy/compare.mspx

I was doing a similar apples-to-apples comparison. 
Look, just accept that not all data points will line
up with your assertions - find some others instead. 
If there are so many, then there have to be better
examples than these.


> Finally, the price of the client software is
> actually not the primary
> problem with M$ monopolistic pricing.  It is the
> back-end software
> where they really are raising the prices.  Compare
> NT Server to
> 2K or XP Server or Advanced Server.  XP AS is nearly
> double 2000 AS
> last time I looked.

Microsoft hardly has a monopoly on servers.  If their
prices are too high, use something else.


> > The argument regarding ILECs is reversed.  I
> > appreciate the citation of Standard Oil, but it is
> a
> > fallacy to think that there is a one-to-one
> mapping
> > between SO and any/all of the ILECs.  
> > 
> True.  What is the point?

Standard Oil is a strawman argument.  The ILECs are
dissimilar in nature and behavior from Standard Oil. 
An assertion otherwise requires evidence.

> 
> > Assertions that "monopolies do X and they're bad,
> and
> > we know that Y will eventually do bad because
> they're
> > a monopoly" are circular.
> > 
> Statements like "In the past, monopolies have done
> X, and, the
> results of X are bad.  Since Y is a monopoly, we can
> expect them to do
> X as well, with similar negative results." are not
> circular.  They
> are attempting to learn from history rather than
> repeat it.

"History doesn't repeat itself.  Historians do."
-unknown (to me at least)

Don't fight the last war, and especially don't fight
it in a way which will impede future innovation.


> Since the market is risky to deploy LMI once, you
> will have a hard
> time that the market exists to pay for multiple
> copies of a given
> LMI in order to support competition.

If there's money in it, then someone will fill the
need.  

I still haven't seen the justification for treating
layer-1 last mile differently from layer-2 last-mile,
or for that matter layer-3 last mile.  Why shouldn't
the city just say "everyone hop on our citywide IP
network, and then everyone can compete at higher
layers of the stack?"



David Barak
Need Geek Rock?  Try The Franchise: 
http://www.listentothefranchise.com




__ 
Yahoo! Mail - PC Magazine Editors' Choice 2005 
http://mail.yahoo.com

Re: What do we mean when we say "competition?"

[J. Oquendo]

To  : David Barak <[EMAIL PROTECTED]>
Cc  : nanog@merit.edu
Attchmnt:
Subject : Re: What do we mean when we say "competition?"
- Message Text -

On Wed, 16 Nov 2005, David Barak wrote:

> Windows * prices -> $???

Slackware in 98 -> A few hours downloading.

> The problems most people have with microsoft's
> monopoly status have nothing whatsoever to do with the
> price of the software which forms the basis of their
> monopoly (windows + office), but rather their
> willingness to use the profits from them to subsidize
> other losing ventures to drive out other competitors.

My qualm with Microsoft's software scheme is just that the pricing
breakdown on a business level coupled with the fact that I still can't get
over an MS salesgoon telling me that if I purchased exchange I would have
to purchase "additional space to use it". Additional space? "But I have a
1/2 tb array?"... "Well" (said the salesgoon) "Doesn't matter how big your
drive is you're only allocated X amount of space..."

Thankfully I was able to use great stuff like Dot Project and a slew of
other OpenSource products to get things running without having to sell my
soul for broken windows.

> Assertions that "monopolies do X and they're bad, and
> we know that Y will eventually do bad because they're
> a monopoly" are circular.

Studies have already shown the evil that m(en)onopolies do:

// QUOTED FROM A SAVED ARTICLE I READ
The standard economic case against monopoly is that, with the same cost
structure, a monopoly supplier will produce at a lower output and charge a
higher price than a competitive industry. This leads to a net loss of
economic welfare and efficiency because price is driven above marginal
cost - leading to allocative inefficiency.
//

Outside of that, most people as history has also show have the tendency to
only stay kicked for so long before something kicks them out of their rut
leading into some form of "revolt" (for lack of a better word on 3 hours
sleep). I'm more concerned with Oligopolies creeping up slowly than I am
with MS nowadays (Yahoo+eBay+Google+INSERT_BANK_HERE). Oligopolies go
unnoticed for quite a while until damage is far more heavier than anything
I can envision MS doing.

Level3 + Cogento + Focal + TimeWarner + Cox = Nightmare

That would be a A bigger nightmare than anything MS would be able to spit
out of their Redmond stable. What ILEC's and CLEC's have to offer cannot
be replaced by screaming geeks hooked on too many Starbuck's Grande Black
Eyes, writing code for free under INSERT_YOUR_LICENSE_HERE.

=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+
J. Oquendo
GPG Key ID 0x97B43D89
http://mo.fscker.com :: Obscurity through Insecurity

"I know what I have given you. I do not know what
you have received" -- Antonio Porchia

Re: What do we mean when we say "competition?"

[Owen DeLong]

> Windows 98 price (in 1997) -> $209
> Office 97 Standard (in 1997) -> $689 
> Windows XP price (now) -> $199.
> Office 2003 (now) -> $399.
> 
> Want to try that again?
> 
Yes... Here's some more accurate data:

Windows 3.1 price $49
Windows 3.1.1 price $99
Windows 95 (Personal) price $59
Windows 98 (Personal) price $99
Windows ME (Home) price $99
Windows NT WS price $99
Windows 2000 Pro price $299
Windows XP Pro Price $399

If you're going to use list prices, use list prices all the way through.
The above represent, to the best of my knowledge, M$ retail pricing for
the lowest level of their "client" version of their OS available at
the time.

I confess I haven't followed pricing on M$ Office, but, I'm willing to
bet that an apples-to-apples comparison would reveal similar results.

Finally, the price of the client software is actually not the primary
problem with M$ monopolistic pricing.  It is the back-end software
where they really are raising the prices.  Compare NT Server to
2K or XP Server or Advanced Server.  XP AS is nearly double 2000 AS
last time I looked.


> The problems most people have with microsoft's
> monopoly status have nothing whatsoever to do with the
> price of the software which forms the basis of their
> monopoly (windows + office), but rather their
> willingness to use the profits from them to subsidize
> other losing ventures to drive out other competitors.
> 
Actually, it's both.

> The argument regarding ILECs is reversed.  I
> appreciate the citation of Standard Oil, but it is a
> fallacy to think that there is a one-to-one mapping
> between SO and any/all of the ILECs.  
> 
True.  What is the point?

> Assertions that "monopolies do X and they're bad, and
> we know that Y will eventually do bad because they're
> a monopoly" are circular.
> 
Statements like "In the past, monopolies have done X, and, the
results of X are bad.  Since Y is a monopoly, we can expect them to do
X as well, with similar negative results." are not circular.  They
are attempting to learn from history rather than repeat it.

There are a number of monopoly ILECs in the US which engage regularly
in anticompetitive practices and use their ownership of the LMI to
reduce competition, delay innovation, and, provide less than
acceptable service to their subscribers.  If you don't believe this,
please look through the records of almost any PUC in the country.

Since that is the case, I cannot believe that preserving such
a monopoly on LMI is a good thing.

Since the market is risky to deploy LMI once, you will have a hard
time that the market exists to pay for multiple copies of a given
LMI in order to support competition.

Owen

-- 
If it wasn't crypto-signed, it probably didn't come from me.


pgpIxcungL4MH.pgp
Description: PGP signature

Re: What do we mean when we say "competition?"

[David Barak]

--- JC Dill <[EMAIL PROTECTED]> wrote:

> 
> David Barak wrote:
> > 
> > --- Owen DeLong <[EMAIL PROTECTED]> wrote:
> > 
> >> Is that still true if the "adequate" service is
> >> being provided at a price which is two to three
> >> times what it should be costing and the provider
> is
> >> enjoying the ability to do this because nobody  
> >> else is in the market space?
> > 
> > I'm confused.  Earlier in this thread you were
> arguing
> > that the current providers were keeping priced
> > artificially LOW.
> 
> They are keeping prices artificially low now, to
> drive out the 
> competition.  They will raise prices once they have
> no competition, as 
> monopoly companies always have done in the past.
> 
> Standard free market behavior is for a large company
> to cut prices (when 
> they can, when they have income from some other
> source to afford this 
> tactic) to drive the competition out of business. 
> Then once they have a 
> monopoly to raise prices (and thus profits).  Check
> out the price for 
> Microsoft software over the years.  As their
> products each became a de 
> facto monopoly in their market the prices went WAY
> up.  

Windows 98 price (in 1997) -> $209
Office 97 Standard (in 1997) -> $689 
Windows XP price (now) -> $199.
Office 2003 (now) -> $399.

Want to try that again?

The problems most people have with microsoft's
monopoly status have nothing whatsoever to do with the
price of the software which forms the basis of their
monopoly (windows + office), but rather their
willingness to use the profits from them to subsidize
other losing ventures to drive out other competitors.

The argument regarding ILECs is reversed.  I
appreciate the citation of Standard Oil, but it is a
fallacy to think that there is a one-to-one mapping
between SO and any/all of the ILECs.  

Assertions that "monopolies do X and they're bad, and
we know that Y will eventually do bad because they're
a monopoly" are circular.


David Barak
Need Geek Rock?  Try The Franchise: 
http://www.listentothefranchise.com




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Re: What do we mean when we say "competition?"

[JC Dill]

David Barak wrote:


--- Owen DeLong <[EMAIL PROTECTED]> wrote:


Is that still true if the "adequate" service is
being provided at a price which is two to three
times what it should be costing and the provider is
enjoying the ability to do this because nobody  
else is in the market space?


I'm confused.  Earlier in this thread you were arguing
that the current providers were keeping priced
artificially LOW.


They are keeping prices artificially low now, to drive out the 
competition.  They will raise prices once they have no competition, as 
monopoly companies always have done in the past.


Standard free market behavior is for a large company to cut prices (when 
they can, when they have income from some other source to afford this 
tactic) to drive the competition out of business.  Then once they have a 
monopoly to raise prices (and thus profits).  Check out the price for 
Microsoft software over the years.  As their products each became a de 
facto monopoly in their market the prices went WAY up.  When the product 
has competition they lower the price (or give the software away "free" - 
bundled with their monopoly OS) until they drive the competition out of 
business (IE versus Navigator).  The history of Standard Oil Company is 
the reason we have anti-trust laws today to try to prevent monopoly 
businesses from anti-competitive behavior.  Standard Oil would lower oil 
prices in a new market until they drove out the competition, and then 
raise oil prices once they had a monopoly and use the profits from those 
raised prices in that market to subsidize the lower price in another 
market where they were busy driving out the competition.  Does this 
sound familiar?


Ida Tarbell's book _The History of the Standard Oil Company_ is a great 
place to learn about this in depth.  It has been edited into a "briefer 
version" (256 pages in paperback versus over 800 in the original 2-part 
hardbound editions) for today's busy readers:




jc

RE: What do we mean when we say "competition?" (was: Re: [Latest draft of Internet regulation bill])

[Owen DeLong]

--On November 16, 2005 4:23:20 AM -0800 David Schwartz
<[EMAIL PROTECTED]> wrote:

> 
> 
>> In any case, the bottom line is that whether through subsidy, "deal",
>> or other mechanism, the "last-mile" infrastructure tends to end up being
>> a monopoly or duopoly for most terrestrial forms of infrastructure.
>> As such, I think we should accept that monopoly and limit the monopoly
>> zone to that area (MPOE<->B-Box or MPEO<->MDF) and prevent an unfair
>> advantage by separating the management of that section of infrastructure
>> from the service providers offering services which use said
>> infrastructure.
> 
>   This is the same "create a free market through extensive regulation" 
> that
> has created the disaster we have now. Any last mile technology whose cost
> of deployment can only be justified by the value of a monopoly on its
> deployment just won't be deployed in this model. That's not a free market.
> 
>   This separation model may turn out to be a very good one or a very bad
> one. But if we choose it and stick with it, what will happen in 50 or 100
> years when it's either broken or irrelevent? Remember, we got to where we
> are now by choosing models that made sense in the voice telco time and
> make no sense at all now.
> 
The model we have now is a certain amount of facilities from a given center
to each residential unit within that centers "serving area".  For any form
of terrestrial facilities, I don't see many alternatives to that model.  I
don't see how you plan to change that model.  Please explain to me what the
alternative model for deploying last-mile terrestrial facilities is.

As long as we are stuck with that model, I don't see how you will ever get
to a point where parallel facilities are cost effective to deploy, and, I
don't think that's necessary to get them deployed.  The reality is that
a "monopoly on the facilities" isn't required to make them cost effective
to deploy, but, it is unlikely to ever be cost effective to deploy parallel
facilities to create competition.  This is the "natural monopoly" scenario
of which I speak.

If such facilities would never be deployed under said model, then, why do
we have:

The golden gate bridge
The bay bridge
The Carquinez straits bridge
The new Carquinez straits bridge

The Interstate Highway system

Residential Telephone service without party lines

CATV

Realistically, for last-mile base infrastructure, there are really only a
few options today.  Co-ax, UTP, and Fiber.  A carrier neutral monopoly
provider of these base facilities in a given serving area (and nothing
says the same monopoly has to run all three) could serve multiple providers
of just about any possible service.

If we come up with a new terrestrial delivery method which has sufficient
promise, I'm betting it won't be that hard to get it deployed.  Fiber,
however, scales pretty far.  A single DWDM pair to the home really is
a pretty large amount of bandwidth.  We'll have many years of warning on
superior technology as it will have to be well and truly deployed in
the backbone prior to any need for it at the edge.

>   Had we done this twenty years ago, the last mile would be dialup and
> billions of public dollars would have been spent to create and maintain an
> irrelevent technology. Meanwhile, the newer technologies wouldn't be
> deployed.
> 
Nope... That shows me how much you truly don't understand how little I'm
talking about monopolizing.  The UTP between the MPOE and the MDF can be
used to serve POTS, ISDN, DSL, DS0, T1, and other services.  Since any
service provider could put any equipment they wanted at the ends of any
of those wire pairs, paying the monopoly maintainer only for the lease of
the dry copper pair, we would have seen a much more rapid deployment of
ISDN and DSL because the RBOCs would not have had any power to delay it.
We would have seen multiple providers competing for PSTN service on an
equal footing.  We might have seen providers offering true T1 services
at residential pricing.

>> This, at least on a theoretical level creates a carrier-neutral
>> party managing the monopoly portion while maximizing and levelling
>> the playing field in all other areas.
> 
>   A carrier-netural party may not be technology neutral, business model
> neutral, or neutral in many ways that may turn out to be important. As I
> see it, you give up on everything that's important from the very first
> step. What if a non-carrier neutral last mile turns out to be the scheme
> most people really want when it's offered to them?
> 
What technology... This is literally just the dumbest layer 1 part of the
network.  It's Wire or Fiber.  There aren't really any other options.  I
don't care if we create a monopoly for each of these technologies.  Since
all they can do is lease an unlit/unpowered piece of wire or fiber from
a serving center to a building MPOE, and, nothing else, and they are not
allowed to

Re: What do we mean when we say "competition?" (was: Re: [Latest draft of Internet regulation bill])

[Marshall Eubanks]

Hello;

On Nov 16, 2005, at 1:16 AM, Owen DeLong wrote:




--On November 15, 2005 8:14:38 PM -0800 David Schwartz  
<[EMAIL PROTECTED]> wrote:






--On November 15, 2005 6:28:21 AM -0800 David Barak
<[EMAIL PROTECTED]> wrote:



OK... Let me try this again... True competition requires
that it be PRACTICAL for multiple providers to enter the
market, including the creation of new providers to seize
opportunities being ignored by the existing ones.


The worse the existing provider it is, the more practical it is to
compete with them. If they are providing what people want at a  
reasonable

price, there is no need for competition. If they are not, then the it
becomes practical for multiple providers to enter the market. If you
assume that the cost to develop existing infrastructure is not  
insanely

less than the cost to develop new infrastructure, the isolation from
competition comes directly from the investment.


1.  The existing infrastructure is usually all that is needed for
many of the services in question.  Laying parallel copper
as a CLEC is not only prohibitively expensive, in most
areas, it's actually illegal.  Usually, municipalities
have granted franchise rights of access to right of
way to particular companies on an exclusive basis.  That
makes it pretty hard for a competitor to enter the market
if they can't get wholesale access to the existing copper.

2.  The existing copper was actually deployed (at least in most
of the united States) using public subsidies.  The taxpayers
actually paid for the network.  The physical infrastructure
should be the property of the people.  The ownership claim
of the telephone companies is almost as baseless as the
Verisign clame that they own the data in whois.

	For example, if Bill Gates took a few billion dollars out of his  
pocket
and launched 80 satellites to provide wireless Internet access, it  
would
be damn hard to compete with him if he wasn't trying to recover  
those few
billion dollars. But if you spend a few billion, you get a few  
billion
worth. Anyone else can spend the same amount and get the same  
advantage.



3.  Except when you consider that there are only so many orbital
slots that can be maintained.  (see 1 above as well).  If Bill
manages to launch N satellites and N leaves N/2 orbital slots
available for other uses, then, it's pretty hard to launch
another N satellites at any cost.



I do not think that the ITU  allocates  orbital slots except for  
geostationary satellites (not even
24 hour inclined orbits, such as are so useful for satellite   
transmissions  to cars). So, if you
want  to launch a Teledesic or Iridium  clone, you can, assuming your  
credit cards are good for a few billion $.


Frequency assignment is, of course, another matter.


If he already has the satellites and is providing the service other
people want at a low price, then other competitors will lose. But  
so what?
Consumers win. And competition doesn't exist to benefit the  
competitors.







Owen



Marshall


--
If this message was not signed with gpg key 0FE2AA3D, it's probably
a forgery.

RE: What do we mean when we say "competition?"

[David Barak]

--- Owen DeLong <[EMAIL PROTECTED]> wrote:
> Is that still true if the "adequate" service is
being provided at > a price which is two to three
times what it should be costing and > the provider is
enjoying the ability to do this because nobody 
> else is in the market space?

I'm confused.  Earlier in this thread you were arguing
that the current providers were keeping priced
artificially LOW.



> After 25 years, we're finally starting to see the 
> beginnings of recognition of that in American
telecommunications 
> services.  Generally speaking, I don't think the
market is well 
> served by having to wait that long.

Are you saying that US market is 25 years behind other
countries in anything?  There is greater hi-speed
penetration in some non-US markets with dramatically
different demographics (mostly much higher density),
and few businesses here have seen a compelling reason
to move to IPv6, but what exactly is so lacking?



> So, do you really think that if SBC had the same
terms for 
> access to the MDF<->MPOE leg that any competitor had
this would 
> not actually change or would get worse?  I don't.  

The example the above quote referred to was about SBC
not meeting the services of some individuals in CA,
but who don't have access to a CLEC.  It's fairly
disingenuous to say that the MDF <-> MPOE leg is the
problem there, because that is actually the regulated
portion of SBC (in-region ILEC activities are heavily
regulated, and a great deal of emphasis at SBC is
placed on compliance with regulations): if no CLECs
have stepped up to provide service to those customers,
that's probably because they don't think it's
profitable to do so.

> OTOH, if the shared LMI was operated by a neutral
third party
> and leased to SBC and any other competitor at the
same price for
> the same component, that would resolve most of what
is
> bothering me about the current system.  It would
allow me
> to buy phone service without giving money to SBC. 
Today,
> I can't do that unless I go to VOIP over WISP which
has its
> own set of tradeoffs.

Depends on the town, doesn't it?  In DC, there are
three phone providers who run their own last-mile to
(some) homes.  Nobody other than Verizon will come to
my house, but Cavalier and RCN both go to condo
buildings nearby.  In addition, lots of people here
have VoIP over cableco (mostly Comcast), and even more
have no land line at all.  

Anecdote: A co-worker is getting Verizon FTTH, and
they have to dig about a 3/4 mile trench to his house
(he's rural).  He's not being charged for the
installation, even though it'll be several years
before it pays for itself.  It's hard to see that as
an example of a {big | evil} monopoly which is hurting
consumers.

Regarding your proposal, are there other utilities
which are subject to the same rule (that the
infrastructure can be repurchased by the city at the
city's convenience)?

Another thing to consider is the definition of "LMI" -
specifically, what do you mean by "last mile?"  Do you
mean from the house to the street (think sewer), or
from the house to a junction box on the corner (think
power), or from the house to a central office
somewhere, or some other distance?  

Also, what about provisions for point-to-point layer-1
service?  Under your proposal, cities may become
responsible for providing this themselves - is that
what you intend?  





David Barak
Need Geek Rock?  Try The Franchise: 
http://www.listentothefranchise.com




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RE: What do we mean when we say "competition?" (was: Re: [Latest draft of Internet regulation bill])

[Michael . Dillon]

>This separation model may turn out to be a very good one or a very 
bad one.
> But if we choose it and stick with it, what will happen in 50 or 100 
years
> when it's either broken or irrelevent? Remember, we got to where we are 
now
> by choosing models that made sense in the voice telco time and make no 
sense
> at all now.

This separation model has been proven in the UK with
electrical utilities, gas utilities and railroads.
Some serious mistakes were made in the railroad model
but they are being remedied over time and the model is
being adjusted.

In the UK, you can buy your electricity from your
gas company or your telephone company. Or you can get 
your home phone from your gas company. There is a regulated
utility that builds, repairs and operates the infrastructure
and last mile but they do not sell to consumers and business
users.

Go to the website http://www.uswitch.com and have a look
at the "suppliers" under the various categories. The separation
exists in its purest form with gas and electric suppliers but
you will notice that there is a "broadband" category because
from the consumer viewpoint, DSL internet access appears to
be structured in the same way.

I think that the UK model is the model of the future and I
suspect that the BT Openreach separation is an attempt by regulators
to move telecom into the same type of structure. You may find
the background documents at this site to be of interest
http://www.reform.co.uk/website/transport/thefutureofrail.aspx
because they show how the complexities of the rail industry are
adapted to this model. I can't imagine telecom to be any more
complex than rail.

--Michael Dillon

P.S. I have no personal knowledge of BT Openreach other than
what I can find via google.

RE: What do we mean when we say "competition?" (was: Re: [Latest draft of Internet regulation bill])

[David Schwartz]

> > Right, and this is appropriate. Large investments in infrastructure
> > should *not* be made if there's already adequate service. Better to
> > invest in places where there isn't.

> Is that still true if the "adequate" service is being provided at a price
> which is two to three times what it should be costing and the provider
> is enjoying the ability to do this because nobody else is in the market
> space?

It depends how much they invested. In some areas that are very 
expensive to
serve, that may be precisely what happens. In areas that are easy to serve
and customer dense, you won't get away with this for very long.

You need prices to be high where it really is expensive to provide 
access
because that's what provides the incentive to develop cheaper ways to
provide access. Perhaps we don't all fly personal planes today because the
government chose to build roads.

> > The government can't do a good job of picking winners and
> > losers, so stop
> > letting it.

> Agreed.  So, let the government do what it does well... Manage the things
> that tend to be natural monopolies and keep it out of everything else
> as much as possible.  Are you arguing that there should be competition
> for the provision of highways, for example?

Yes.

> How would you see that
> working?  Do we stack six copies of I-80 on top of each other, or, do
> we allocate multiple semi-parallel routes for freeways and let different
> companies build different routes and charge what they want for each of
> them?  How do you see that working on a neighborhood level?  Even
> if you think it works at the highway level, we're really talking about
> the neighborhood streets here.

Now you are asking me to pick the winners and losers and claiming that 
if
I'm not smart enough to pick the winners and losers, a free market won't
work. I am the one saying nobody is smart enough to figure out how to do it.
You are the one saying governments will be smart enough to build the right
infrastructure and now slow innovation. (As they always have in the past
despite every effort to provide 'equal access'.)

> The last-mile infrastructure for terrestrial services looks a lot more
> like a local roadways inside a neighborhood than any other analogy
> I can think of.  I have yet to see any environment where this has
> been accomplished on anything other than a monopoly basis.

The monopoly is not the problem. The lack of competition is the problem.
Perhaps you don't see the difference. If a monopoly is the most efficient
result, then competition will lead to an efficient monopoly. It's when you
choose a monopoly and shut out other efficient results that you have a
problem. That's the situation we have now and that's the situation you
propose to maintain.

If it's expensive or impractical to run eight company's fiber in a city,
then make the companies pay that expense to run fiber or don't let them.
That way, we'll have eight fibers if that really is the right solution and
we won't if it isn't. If someone wants to run carrier-neutral fiber, they
can do so. But if that's not the best model or best solution, don't shut out
the others.

> >> The list goes on, but, believe me when I tell you that there are
> >> plenty of consumers in California that do not feel that SBC
> >> is meeting their needs, but, they don't have access to a real
> >> CLEC.
> >
> > Oh, I know that story, believe me.

> So, do you really think that if SBC had the same terms for access to
> the MDF<->MPOE leg that any competitor had this would not actually
> change or would get worse?  I don't.  I think it would actually
> solve many of the current problems and encourage many of the CLECs
> to re-enter the market.

I think if SBC had to open their circuits, they wouldn't build as many 
of
them unless they were forced to. Living in an area with no local high-speed
access options, I want them to have every incentive to build new
infrastructure. If you force them to build new infrastructure, or subsidize
it publically, then you are again picking winners and losers. The big losers
will be the new technologies, because they'll never have a chance

If a free market naturally creates a problem, then it creates an 
incentive
for a clever solution. No person or group could engineer a solution as
clever as the one the market will evolve. But your proposal requires such a
group. It essentially extends exactly what we have now.

> > And what about a carrier that needs different
> > infrastructure to provide
> > the type of service it wants to provide?

> They can build it, and, if they get a competitor that wants equal access
> to it, they get reimbursed for the build.

You realize that that is absolutely crazy. That's like saying "you can 
buy
a lottery ticket, and if you win, give me the ticket and I'll reimburse you
its cost.

> > And repeating the same problem 50 years from now when
> > innovative serv

RE: What do we mean when we say "competition?" (was: Re: [Latest draft of Internet regulation bill])

[David Schwartz]

> In any case, the bottom line is that whether through subsidy, "deal",
> or other mechanism, the "last-mile" infrastructure tends to end up being
> a monopoly or duopoly for most terrestrial forms of infrastructure.
> As such, I think we should accept that monopoly and limit the monopoly
> zone to that area (MPOE<->B-Box or MPEO<->MDF) and prevent an unfair
> advantage by separating the management of that section of infrastructure
> from the service providers offering services which use said
> infrastructure.

This is the same "create a free market through extensive regulation" 
that
has created the disaster we have now. Any last mile technology whose cost of
deployment can only be justified by the value of a monopoly on its
deployment just won't be deployed in this model. That's not a free market.

This separation model may turn out to be a very good one or a very bad 
one.
But if we choose it and stick with it, what will happen in 50 or 100 years
when it's either broken or irrelevent? Remember, we got to where we are now
by choosing models that made sense in the voice telco time and make no sense
at all now.

Had we done this twenty years ago, the last mile would be dialup and
billions of public dollars would have been spent to create and maintain an
irrelevent technology. Meanwhile, the newer technologies wouldn't be
deployed.

> This, at least on a theoretical level creates a carrier-neutral
> party managing the monopoly portion while maximizing and levelling
> the playing field in all other areas.

A carrier-netural party may not be technology neutral, business model
neutral, or neutral in many ways that may turn out to be important. As I see
it, you give up on everything that's important from the very first step.
What if a non-carrier neutral last mile turns out to be the scheme most
people really want when it's offered to them?

Competition in last mile technologies, deployment strategies, contract
terms, and the like are not just important, they're absolutely vital.

If you try to pick the winners and losers, or worse let local 
governments
do so, you'll just get another generation of publically financed mediocre
solutions while the truly innovative technologies get shut out by the
monopoly arrangements.

DS

RE: What do we mean when we say "competition?" (was: Re: [Latest draft of Internet regulation bill])

[Owen DeLong]

--On November 15, 2005 11:02:18 PM -0800 David Schwartz 
<[EMAIL PROTECTED]> wrote:






--On November 15, 2005 8:14:38 PM -0800 David Schwartz
<[EMAIL PROTECTED]> wrote:



>> --On November 15, 2005 6:28:21 AM -0800 David Barak
>> <[EMAIL PROTECTED]> wrote:



>> OK... Let me try this again... True competition requires
>> that it be PRACTICAL for multiple providers to enter the
>> market, including the creation of new providers to seize
>> opportunities being ignored by the existing ones.



>The worse the existing provider it is, the more practical it is to
> compete with them. If they are providing what people want at a
> reasonable
> price, there is no need for competition. If they are not, then the it
> becomes practical for multiple providers to enter the market. If you
> assume that the cost to develop existing infrastructure is not insanely
> less than the cost to develop new infrastructure, the isolation from
> competition comes directly from the investment.



1.  The existing infrastructure is usually all that is needed for
many of the services in question.  Laying parallel copper
as a CLEC is not only prohibitively expensive, in most
areas, it's actually illegal.  Usually, municipalities
have granted franchise rights of access to right of
way to particular companies on an exclusive basis.  That
makes it pretty hard for a competitor to enter the market
if they can't get wholesale access to the existing copper.


For now this may be true. But you'll set up another generation of the
same problem if you continue to advocate subsidized infrastructure. At
some point that infrastructure will be inadequate, and you will have done
nothing to make it easier to build competitive new infrastructure. If
munipalities granting monopolies is a problem, then stop such monopolies
-- don't advocate them!


The problem is that because of cost and other factors of last-mile
deployment of terrestrial infrastructure, these are natural monopolies
whether you like it or not.  For example, how many streets from how
many different providers pass in front of your house?  How many different
telcos have copper to the junction box that could be used to provide
service to your home?  How many cable companies have fiber or co-ax
in your street?  For the vast majority of the united States, it is
very hard to answer anything other than 0 or 1 to any of these
questions.

The primary problem as I see it is not the monopoly of the infrastructure,
but, the inherent connection between the management of that monopoly
infrastructure and one of the competitors for the provision of services
over that infrastructure.


2.  The existing copper was actually deployed (at least in most
of the united States) using public subsidies.  The taxpayers
actually paid for the network.  The physical infrastructure
should be the property of the people.  The ownership claim
of the telephone companies is almost as baseless as the
Verisign clame that they own the data in whois.


It doesn't much matter and it can't be fixed. The static value of the
infrastructure is basically depreciated to zero by now. The profits have
been reaped. Don't justify future bad decisions on past inquities that
can't be fixed anyway. Just start right from now on.


If I thought what I was suggesting was a bad decision, I wouldn't be
suggesting it.  However, I think there is much more justification for
this decision than past inequities.  As long as you have an area
that tends to create a natural monopoly and allow one competitor that
uses that infrastructure to also own said infrastructure, it creates
an unfair environment for other competitors.

Are you really advocating that the market is best served by multiple
providers laying last-mile fiber?  Doubling the cost of FTTH to
create just two FTTH providers in an area seems pretty stupid to
me.  OTOH, a 10% increase (probably much less) in the cost of FTTH
to facilitate a virtually unlimited number of service providers
being able to access said fiber on a consumer-choice basis
doesn't seem so stupid to me.


>For example, if Bill Gates took a few billion dollars out
> of his pocket
> and launched 80 satellites to provide wireless Internet access, it
> would be damn hard to compete with him if he wasn't trying to recover
> those few
> billion dollars. But if you spend a few billion, you get a few billion
> worth. Anyone else can spend the same amount and get the same
> advantage.



3.  Except when you consider that there are only so many orbital
slots that can be maintained.  (see 1 above as well).  If Bill
manages to launch N satellites and N leaves N/2 orbital slots
available for other uses, then, it's pretty hard to launch
another N satellites at any cost.


The present infrastructure in no way impedes the construction of future
infrastructure. If it d

RE: What do we mean when we say "competition?" (was: Re: [Latest draft of Internet regulation bill])

[Owen DeLong]

--On November 16, 2005 1:48:39 AM -0500 Sean Donelan <[EMAIL PROTECTED]> 
wrote:



On Tue, 15 Nov 2005, Owen DeLong wrote:

areas, it's actually illegal.  Usually, municipalities
have granted franchise rights of access to right of
way to particular companies on an exclusive basis.  That
makes it pretty hard for a competitor to enter the market
if they can't get wholesale access to the existing copper.


Where do you think this happens?  Federal law and FCC regulations don't
permit exclusive franchises, and require cities to allow non-discrimintory
access to right of ways.


Try to be a competing cable company in San Jose.

The city seems to have interpreted that to mean backbone rights of ways
and not last-mile rights of ways in neighborhoods.




2.  The existing copper was actually deployed (at least in most
of the united States) using public subsidies.  The taxpayers
actually paid for the network.  The physical infrastructure
should be the property of the people.  The ownership claim
of the telephone companies is almost as baseless as the
Verisign clame that they own the data in whois.


Again, where are these public subsidies?  In rural (i.e. non-RBOC) areas
with USDA borrowing authority which I think is actually a revolving
borrowing authority, i.e. rural utilities have to pay the money back?  I
don't think the RBOCs ever qualified for USDA borrowering.

I think you are confusing taxpayers with shareholders and ratepayers. In
same places governments provide companies incentitives to attract
investment in their areas, such as building new factories, etc; but
normally people don't think that gives the government a lien on
the factory.


While this is true, you will find that it is my considered opinion
that if HP wants to call it the HP arena, they should have reimbursed
me my 5% utility tax that I have been paying for years and continue
to pay towards the cost of building it.

I am actually opposed to government doing this in any form other than
a loan which is expected to be paid back.  Especially when it comes
to such things as ballparks, arenas, etc.




Semi-regulated monopolies that think they own an infrastructure
built with taxpayer money. (see also 2 above)


Again, I think you are confusing taxpayers with shareholders and
ratepayers.



Huh?  How does this favor one set of business models?  What it does is
take the portion of the infrastructure that was built with taxpayer
money and put it back in the hands of the taxpayer so that whatever
carrier the tax payer wants to buy service from has equal access to the
infrastructure.


What taxpayer money, other than the government paying its telephone
bills, do you think was used to build the RBOC or MSO infrastructure?



My understanding, as I stated, was that in the pre-Greene days, cities
actually paid AT&T a "fee" to get neighborhoods wired either retroactively,
or, as they were built.


Today, nobody can put CATV infrastructure anywhere in San Jose
if their name isn't Comcast.  Period.  The city sold us out to
an exclusive franchise deal.  The current bill proposed eliminates
that.  That's a good thing.


Exclusive cable franchises were eliminated in by federal law in 1992.

Comcast has a non-exclusive franchise in San Jose.  Of course, I live
across the railroad tracks in Sunnyvale, another non-exclusive franchise
territory dominated by Comcast.  Comcast chosen not to deploy advanced
cable services on my side of the railroad tracks.  The original cable
franchises were often divided up into multiple areas in a city, e.g.
Philidelphia has four different franchise areas, City of Los Angeles has
14 different franchise areas.  Cable companies had a phased roll out of
services in different areas over many years.  Even today, cable companies
don't have DVR, HDTV, Voice or Video on Demand rolled out to 100% of their
service areas.


So... Who besides Comcast is operating in San Jose?  Nobody.  Why?  Because
whether you consider their deal an exclusive franchise or not, for
all practical purposes, it is.  Comcast got very favorable rates from
the city on a number of things in exchange for promising to build out
a certain level of infrastructure.  As I see it unless the city is
obliged to provide the same deal to any other company, that's effectively
a subsidy supporting a Comcast monopoly.


Currently cable companies do not need to obtain a state license to offer
voice or telecommunication services over its facilities.  Telephone
companies, and other cable competitors, still need to negotiated
individual municiple franchises in order to offer video services of
its facilities.



In any case, the bottom line is that whether through subsidy, "deal",
or other mechanism, the "last-mile" infrastructure tends to end up being
a monopoly or duopoly for most terrestrial forms of infrastructure.
As such, I think we should accept that monopoly and limit the mon

Re: What do we mean when we say "competition?"

[Sean Donelan]

On Tue, 15 Nov 2005, Owen DeLong wrote:
> Most places have no fiber "last-mile".  Some do.  Of those
> that do, I know that many were installed by cable companies
> and that there are in many of those places utility taxes
> that are being collected and passed along to at least
> partially fund said buildout.  I know that Comcast
> signed a huge sweet-heart deal with the city of San Jose,
> for example before they started tearing up my neighborhood.
> They seem to have laid interduct to the curb and co-ax
> to the home.  I haven't seen them bring any fiber anywhere
> yet, but, I presume that's what the interduct is for at
> some point.

So I'm confused.  San Jose is doing exactly what you are advocating.  San
Jose has decided to use taxpayer funds to build a city-owned fiber optic
conduit system it will own and lease to telecommunication companies and
other users.  Palo Alto also spent a lot of its taxpayers funds to build
a city-owned fiber optic system.

http://www.sanjoseca.gov/budget/
http://www.sanjoseca.gov/budget/FY0506/proposedCapital/10.pdf
See Fiber Optics Development Fund

But what does that have to do with funding ILEC facilities?

As I recall, despite spending a lot of taxpayer money, the cities couldn't
convince the ILEC to use the city-owned fiber optic facilities.  The ILECs
built and use its own facilities, without taxpayer funds.  Heck, until
1982, they wouldn't even sell you a phone.  The phones were stamped
property of the Bell System, not for sale.

I'm not sure if there is really a natural monopoly.  There are multiple
wires to most houses and through most public rights of way.  The fact that
there a damage between different provider facilities when they dig in
a right of way is evidence that right of ways contain multiple providers.

Re: What do we mean when we say "competition?" (was: Re: [Latest draft of Internet regulation bill])

[Mikael Abrahamsson]

On Tue, 15 Nov 2005 [EMAIL PROTECTED] wrote:


This is more or less what BT has done in the UK by splitting
off all the field engineering into a separate company called
Openreach.


Telia in Sweden did that (Skanova), now that they're privatised (partly) 
they're merging that unit back again, and it never was a really separate 
unit.


Having a separate cable company with airtight divide to the service 
company is a must. Economy of scale says only one cable is needed to the 
consumer, but from there it seems there is enough different ways of doing 
things that it warrants a plenthora of companies to supply service, I 
would say at least three.


Price of bw in Sweden which generally has at least 3 different ISPs 
colocating with telia in the larger phone stations, is at $25 per month 
plus tax for ADSL 8/1, personally I think that if we had a separate cable 
company this would actually be slightly lower, if not, we would at least 
have equal access to the premesis (currently something like 30% of the 
phonestations are claimed to be "out of space" by Telia, but they can 
still build-out new services themselves as they prioritize their own 
equipment).


--
Mikael Abrahamssonemail: [EMAIL PROTECTED]

Re: What do we mean when we say "competition?"

[Sean Donelan]

On Tue, 15 Nov 2005, Owen DeLong wrote:
> contractor and their rock-wheels).  As I understand it, up until
> the divestiture, AT&T received a certain amount of tax funding for
> each neighborhood they laid copper into.

Your information is incorrect.


> Finally, claiming that USF is just an explicit transfer is a fallacy.
> Look on your phone bill.  Have you ever seen anyone who receives
> a credit on the USF or HCR lines on their bill?  Everyone I've ever
> seen is a charge.  So, either the phone companies are pocketing
> that money, or, there's some group of citizens somewhere who
> are receiving what my friends and I are putting into that pot.

The people who receive a "credit" care called schools, libraries and rural
hospitals as part of E-Rate.  I have seen many people who receive credit
for E-Rate services.  I've helped schools and libraries to apply for
E-Rate services.

But most of the USF money goes to the so-called High Cost Funds, whose
basic principle is to try to provide phone service throughout the entire
United States even though it costs more money to provide phone service in
rural areas than urban areas.  That way people in rural areas don't pay
hundreds of dollars for a phone line.  You can see how the money is
distributed through the Universal Service Administrative Company.  This
is a post-AT&T divestiture activity, to try to formalize the pre-divisture
intra-company settlement process AT&T used to equalize prices across
the entire country.


http://www.universalservice.org/

Although the FCC now overseas the Universal Service Fund,the FCC doesn't
like to call it a "tax."  The USF is nominally paid for by ratepayers and
shareholders (depending on your point of view), not taxpayers.


> > So what is it exactly you think taxpayer funds paid for and should now
> > own?
>
> 1.Most of the existing pre-1996 copper "last-mile" infrastructure

False, taxpayer funds didn't pay for most (i.e. more than 50%) of the
existing pre-1996 copper (or coaxial) last mile infrastructure in the USA.

There are some government owned/funded facilities in some municipalities,
but I think in most (i.e. more than 50%) cases MSOs and RBOCs paid to
install their own facilities or purchased them from a previous owner
(e.g. Western Union, RCA, etc).  AT&T has a long, not invented here
syndrome, and prefered to own its facilities.


> 2.The right-of-way

Government owned right-of-way are non-exclusive.  Competitive carriers can
obtain access to public right of way from the local government. For
example,  Mountain View is negotiating with Google for non-exclusive
access to city-owned light poles.  Earthlink is negotiating with the
City of Philidelphia for access to public right of ways and public
buildings.

Easments on private property are a more interesting issue, but generally
the FCC tends to rule in favor of competitive access, e.g. multi-dwelling
units and multi-tenent office buildings, but doesn't completely overrule
private property rights.

> 3.Most of the B-Boxes

Not paid for by taxpayers.

> 4.At least an easment for access to the MDFs if not the MDFs themselves.

Not paid for by taxpayers.

> 5.The ridiculous amount of money granted to Pacific Bell as a result
>   of A-95-12-03 where they actually convinced the PUC that converting
>   from D4/AMI to B8ZS-ESF required them to completely replace their
>   inter-co infrastructure and that they only had to do this to accomodate
>   ISDN.  (At the time most of the D4/AMI infrastructure was deployed,
>   the need for and superiority of B8ZS/ESF was well known and this
>   was really just another example of Pacific Bell's passive aggressive
>   attitude towards ISDN).

Not paid for by taxpayers.

> I'm sure if I reviewed the last 10 years of rulings I could find other
> examples of Pacific Bell/Pacific Telesis/SBC receiving sbusidies disguised as
> rate-hikes from the California PUC.

Again I think you are confusing taxpayers with ratepayers and
shareholders.  Just because the government controlled the rates
charged by a company, does not make them taxes.

RE: What do we mean when we say "competition?" (was: Re: [Latest draft of Internet regulation bill])

[David Schwartz]

> --On November 15, 2005 8:14:38 PM -0800 David Schwartz
> <[EMAIL PROTECTED]> wrote:

> >> --On November 15, 2005 6:28:21 AM -0800 David Barak
> >> <[EMAIL PROTECTED]> wrote:

> >> OK... Let me try this again... True competition requires
> >> that it be PRACTICAL for multiple providers to enter the
> >> market, including the creation of new providers to seize
> >> opportunities being ignored by the existing ones.

> > The worse the existing provider it is, the more practical it is to
> > compete with them. If they are providing what people want at a
> > reasonable
> > price, there is no need for competition. If they are not, then the it
> > becomes practical for multiple providers to enter the market. If you
> > assume that the cost to develop existing infrastructure is not insanely
> > less than the cost to develop new infrastructure, the isolation from
> > competition comes directly from the investment.

> 1.The existing infrastructure is usually all that is needed for
>   many of the services in question.  Laying parallel copper
>   as a CLEC is not only prohibitively expensive, in most
>   areas, it's actually illegal.  Usually, municipalities
>   have granted franchise rights of access to right of
>   way to particular companies on an exclusive basis.  That
>   makes it pretty hard for a competitor to enter the market
>   if they can't get wholesale access to the existing copper.

For now this may be true. But you'll set up another generation of the 
same
problem if you continue to advocate subsidized infrastructure. At some point
that infrastructure will be inadequate, and you will have done nothing to
make it easier to build competitive new infrastructure. If munipalities
granting monopolies is a problem, then stop such monopolies -- don't
advocate them!

> 2.The existing copper was actually deployed (at least in most
>   of the united States) using public subsidies.  The taxpayers
>   actually paid for the network.  The physical infrastructure
>   should be the property of the people.  The ownership claim
>   of the telephone companies is almost as baseless as the
>   Verisign clame that they own the data in whois.

It doesn't much matter and it can't be fixed. The static value of the
infrastructure is basically depreciated to zero by now. The profits have
been reaped. Don't justify future bad decisions on past inquities that can't
be fixed anyway. Just start right from now on.

> > For example, if Bill Gates took a few billion dollars out
> > of his pocket
> > and launched 80 satellites to provide wireless Internet access, it would
> > be damn hard to compete with him if he wasn't trying to recover
> > those few
> > billion dollars. But if you spend a few billion, you get a few billion
> > worth. Anyone else can spend the same amount and get the same advantage.

> 3.Except when you consider that there are only so many orbital
>   slots that can be maintained.  (see 1 above as well).  If Bill
>   manages to launch N satellites and N leaves N/2 orbital slots
>   available for other uses, then, it's pretty hard to launch
>   another N satellites at any cost.

The present infrastructure in no way impedes the construction of future
infrastructure. If it did, this would be a valid point. At best this just
shows that the my analogy is not so good.

> > If he already has the satellites and is providing the service other
> > people want at a low price, then other competitors will lose.
> > But so what?
> > Consumers win. And competition doesn't exist to benefit the competitors.

> 4.But, what tends to happen instead is that Bill charges whatever
>   he can get to recoup his billions until someone else launches
>   their satellites (has expended the capital).  Then, when they
>   start to go after revenue, Bill drops his prices to something
>   they can't sustain because they don't have his bankroll and
>   have to recoup their costs.  They go out of business and Bill
>   either buys their satellites, or, they become space-junk.
>   Bill brings his prices back up to previous levels, and,
>   consumers lose and the competition loses too.

This doesn't work in practice. It only does in theory. There are many, 
many
reasons why. One is that service is often contracted for on a long term.
Another is that spot competitors can compete in small areas when prices drop
and you can't locally vary your prices forever because it's hard
logistically.

As soon as the prices go back up, the competitors come back. And the
screwed customers don't.

>   Even if Bill doesn't actually do this, the knowledge that he could
>   causes investors to view the new satellite company as a bad risk,
>   so, Bill's monopoly position prevents investment into competitive
>   entry into the market.

Right, and this is appropriate. Large investments in i

Re: What do we mean when we say "competition?"

[Owen DeLong]

I think what is really represented there is that
because
they own an existing network that was built with
public
subsidy and future entrants have no such access to
public
subsidy to build their own network, ...


Sean's post correctly identified the problem with this
assertion, so I won't


And I provided a response to Sean's email, so, I won't
repeat it here.


The government should recognize that the existing
build
has actually been paid for mostly by public subsidy
anyway
and as such, should require the ILECs to split into
two
separate divisions.


You mean the existing FIBER build was mostly paid by
public subsidy?  Do you have a reference for that?


No... I'm talking about "last-mile" ifrastructure, not
backbone.  I'm much less concerned about the cost of
new backbone _IF_ providers can get fair and equal
access to public right-of-way.

Most places have no fiber "last-mile".  Some do.  Of those
that do, I know that many were installed by cable companies
and that there are in many of those places utility taxes
that are being collected and passed along to at least
partially fund said buildout.  I know that Comcast
signed a huge sweet-heart deal with the city of San Jose,
for example before they started tearing up my neighborhood.
They seem to have laid interduct to the curb and co-ax
to the home.  I haven't seen them bring any fiber anywhere
yet, but, I presume that's what the interduct is for at
some point.

Mostly all they've delivered so far is damage.  4 sepearte
loss-of-phone service incidents (they cut F1 (twice), F2
(once) and the cable in my street (once)).  I'm not a Comcast
subscriber and probably never will be, but, that doesn't
prevent the city from taxing me to support this buildout.


One division would be a
wholesale
only infrastructure delivery company that would
maintain
the physical infrastructure.  As part of this,
ownership
of the physical infrastructure in place would be
transferred to an appropriate local civil body
(city,
county, district, etc.) and said body should have an
initial 5 year contract with the infrastructure
portion
of the ILEC to provide existing services on a
provider-
neutral basis (same price to all ILECs, Clecs,
etc.).

At the end of that 5 year contract, the maintenance
of
the infrastructure should be up for bid, and, if the
existing ILEC infrastructure portion can't win the
bid,
they are out of luck.


I don't know how familiar you are with what the
government contracting process is like, but the word
"unpleasant" comes to mind: it's long, hard, and
cumbersome.  Your model would substantially increase
the amount of government contracting required, so you
would need to be able to show a benefit to society of
corresponding magnitude.


Huh?  I'm talking about doing this once every 5 years
so that the infrastructure management company has to
face some potential recourse if they do a lousy job.
I'm not talking about switching contractors on a monthly
basis or anything like that.  Actually, I think a once
every 5 year contract would be a lot less cumbersome
than the number of PUC applications processed today.
How familiar are you with THAT process?


Right, but, faced with potential competition, they
are
notorious for temporarily lowering prices well below
sustainable levels in order to eliminate said
competition.


Are you alleging that the ILECs/RBOCs are providing
services below cost?  If so, call a regulator.  If
not, while the profits may be lower than desired by
the ILEC/RBOC, it's certainlly "sustainable"


I'm alleging that the ILECs/RBOCs have lower costs than
their competitors because they own an infrastructure
that was paid for, at least in large part, by others.
Further, they have an incentive to provide better service
to themselves than to their competitors and do so.


The '96 telecom act did nothing to take the
last
mile infrastructure out of the hands of the existing
ILEC.


You are correct.  However, the '96 telecom act did
give lots of other companies the OPPORTUNITY to build
their own last mile access.  Your proposal actually
drives toward a more monopolistic, regulated
environment.


Not really.  First, the '96 telecom act did nothing to
remove Cities' ability to enter into exclusive franchise
agreements for public right-of-way.  Second, my proposal
includes the idea of OPEN ACCESS to public right of
way for anyone who wants to build infrastructure and
the elimination of such franchise deals.

So, my intent, at least, is to give equal access to the
existing infrastructure for all comers while simultaneously
making putting new infrastructure in public right-of-way
more accessible to more providers.

That having been said, the reality is that there is no
rational cost-model where it makes sense to put parallel
separate fiber/copper/whatever into every home/business/etc.

The last mile is notoriously the highest cost with the
lowest return.  As such, it lends itself to natural
monopoly regardless of other factors.  Recognizing
this fact and limiti

RE: What do we mean when we say "competition?" (was: Re: [Latest draft of Internet regulation bill])

[Sean Donelan]

On Tue, 15 Nov 2005, Owen DeLong wrote:
>   areas, it's actually illegal.  Usually, municipalities
>   have granted franchise rights of access to right of
>   way to particular companies on an exclusive basis.  That
>   makes it pretty hard for a competitor to enter the market
>   if they can't get wholesale access to the existing copper.

Where do you think this happens?  Federal law and FCC regulations don't
permit exclusive franchises, and require cities to allow non-discrimintory
access to right of ways.


> 2.The existing copper was actually deployed (at least in most
>   of the united States) using public subsidies.  The taxpayers
>   actually paid for the network.  The physical infrastructure
>   should be the property of the people.  The ownership claim
>   of the telephone companies is almost as baseless as the
>   Verisign clame that they own the data in whois.

Again, where are these public subsidies?  In rural (i.e. non-RBOC) areas
with USDA borrowing authority which I think is actually a revolving
borrowing authority, i.e. rural utilities have to pay the money back?  I
don't think the RBOCs ever qualified for USDA borrowering.

I think you are confusing taxpayers with shareholders and ratepayers. In
same places governments provide companies incentitives to attract
investment in their areas, such as building new factories, etc; but
normally people don't think that gives the government a lien on
the factory.


>   Semi-regulated monopolies that think they own an infrastructure
>   built with taxpayer money. (see also 2 above)

Again, I think you are confusing taxpayers with shareholders and
ratepayers.


> Huh?  How does this favor one set of business models?  What it does is take
> the portion of the infrastructure that was built with taxpayer money and
> put it back in the hands of the taxpayer so that whatever carrier the
> tax payer wants to buy service from has equal access to the infrastructure.

What taxpayer money, other than the government paying its telephone
bills, do you think was used to build the RBOC or MSO infrastructure?


> Today, nobody can put CATV infrastructure anywhere in San Jose
> if their name isn't Comcast.  Period.  The city sold us out to
> an exclusive franchise deal.  The current bill proposed eliminates
> that.  That's a good thing.

Exclusive cable franchises were eliminated in by federal law in 1992.

Comcast has a non-exclusive franchise in San Jose.  Of course, I live
across the railroad tracks in Sunnyvale, another non-exclusive franchise
territory dominated by Comcast.  Comcast chosen not to deploy advanced
cable services on my side of the railroad tracks.  The original cable
franchises were often divided up into multiple areas in a city, e.g.
Philidelphia has four different franchise areas, City of Los Angeles has
14 different franchise areas.  Cable companies had a phased roll out of
services in different areas over many years.  Even today, cable companies
don't have DVR, HDTV, Voice or Video on Demand rolled out to 100% of their
service areas.

Currently cable companies do not need to obtain a state license to offer
voice or telecommunication services over its facilities.  Telephone
companies, and other cable competitors, still need to negotiated
individual municiple franchises in order to offer video services of
its facilities.

Re: What do we mean when we say "competition?"

[Owen DeLong]

--On November 15, 2005 11:23:50 PM -0500 Sean Donelan <[EMAIL PROTECTED]> 
wrote:



On Tue, 15 Nov 2005, Owen DeLong wrote:

I think what is really represented there is that because
they own an existing network that was built with public
subsidy and future entrants have no such access to public
subsidy to build their own network,


Some people may think "public subsidy" implies using taxpayer funds such
as giving incentivies to companies to build factories, job training
programs, re-locate corporate headquarters or even build sports
stadiums.

Are you refering to the exclusive franchises granted to various cable and
telephone companies in parts of the country as the "subsidy?"  Or are you
referring the the High Cost Support funds which used to be implicit
internal transfers in the old Bell System (not taxpayer funds), or now
explicit transfers through the Universial Service Fund? Or are you
referring to the US Department of Agriculture Rural Utilities Service
financing which assists non-RBOC rural telephone and utility companies?


A combination of the franchises (which at least in San Jose, hardly
what I would call rural) and the pre-1996 copper plant.  Certainly,
I can guarantee you that the copper in many neighborhoods in San Jose
dates back to the 1970s.  My neighborhood is one such area.  According
to my local Cable Maintenance guys, the icky-pick cable that passes
for an F1 from my CO was laid in the 1960s and hasn't been replaced
(except a few feet here and there thanks to the Comcast inept
contractor and their rock-wheels).  As I understand it, up until
the divestiture, AT&T received a certain amount of tax funding for
each neighborhood they laid copper into.

There is no indication in most of San Jose that the pre-1996 copper
is going away any time soon.

Finally, claiming that USF is just an explicit transfer is a fallacy.
Look on your phone bill.  Have you ever seen anyone who receives
a credit on the USF or HCR lines on their bill?  Everyone I've ever
seen is a charge.  So, either the phone companies are pocketing
that money, or, there's some group of citizens somewhere who
are receiving what my friends and I are putting into that pot.


Competitors have been given access to the legacy telephone copper plant
(but generally not the cable coaxial plant) in most of the country. The
legacy copper outside plant is quickly being replaced by post-1996 outside
plant.  Soon there may be little or no pre-1996 outside copper plant
left.  Ownership of inside wiring was transfered to the property owner
a couple of decades ago.


Yes, but, the FCC is now reducing that access.  Also, the fact that
the current ILEC acts as gatekeeper for said access results in various
anti-competitive practices being used by the ILEC to reduce service
quality to competitive carriers.  OTOH, if the ILEC was in a position
of either operating the infrastructure, OR, competing with other
providers, not doing both at the same time, I believe the behavior
would be substantially different.  As it stands today, the ILEC
has a substantial incentive to provide better infrastructure response
to it's in-house service provider than to competing service
providers that don't own their own infrastructure.


Several municipalities in the US have spent taxpayer funds, or taxpayer
backed, to build a municiple outside plants.


True.


What's interesting is there is relatively little competitive activity or
demand for access in locations (i.e. rural) with the largest government
incentives,  while there is a lot of demand in areas (i.e. urban) which
had minimimal or no government incentives and were funded by shareholders
and other investors.  The RBOCs and MSOs have been selling off their rural
assets to other companies for any years.


Also true, but, in part, that is why those incentives are there.


So what is it exactly you think taxpayer funds paid for and should now
own?


1.  Most of the existing pre-1996 copper "last-mile" infrastructure
2.  The right-of-way
3.  Most of the B-Boxes
4.  At least an easment for access to the MDFs if not the MDFs themselves.
5.  The ridiculous amount of money granted to Pacific Bell as a result
of A-95-12-03 where they actually convinced the PUC that converting
from D4/AMI to B8ZS-ESF required them to completely replace their
inter-co infrastructure and that they only had to do this to accomodate
ISDN.  (At the time most of the D4/AMI infrastructure was deployed,
the need for and superiority of B8ZS/ESF was well known and this
was really just another example of Pacific Bell's passive aggressive
attitude towards ISDN).

I'm sure if I reviewed the last 10 years of rulings I could find other 
examples
of Pacific Bell/Pacific Telesis/SBC receiving sbusidies disguised as 
rate-hikes

from the California PUC.

Owen



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RE: What do we mean when we say "competition?" (was: Re: [Latest draft of Internet regulation bill])

[Owen DeLong]

--On November 15, 2005 8:14:38 PM -0800 David Schwartz 
<[EMAIL PROTECTED]> wrote:






--On November 15, 2005 6:28:21 AM -0800 David Barak
<[EMAIL PROTECTED]> wrote:



OK... Let me try this again... True competition requires
that it be PRACTICAL for multiple providers to enter the
market, including the creation of new providers to seize
opportunities being ignored by the existing ones.


The worse the existing provider it is, the more practical it is to
compete with them. If they are providing what people want at a reasonable
price, there is no need for competition. If they are not, then the it
becomes practical for multiple providers to enter the market. If you
assume that the cost to develop existing infrastructure is not insanely
less than the cost to develop new infrastructure, the isolation from
competition comes directly from the investment.


1.  The existing infrastructure is usually all that is needed for
many of the services in question.  Laying parallel copper
as a CLEC is not only prohibitively expensive, in most
areas, it's actually illegal.  Usually, municipalities
have granted franchise rights of access to right of
way to particular companies on an exclusive basis.  That
makes it pretty hard for a competitor to enter the market
if they can't get wholesale access to the existing copper.

2.  The existing copper was actually deployed (at least in most
of the united States) using public subsidies.  The taxpayers
actually paid for the network.  The physical infrastructure
should be the property of the people.  The ownership claim
of the telephone companies is almost as baseless as the
Verisign clame that they own the data in whois.


For example, if Bill Gates took a few billion dollars out of his pocket
and launched 80 satellites to provide wireless Internet access, it would
be damn hard to compete with him if he wasn't trying to recover those few
billion dollars. But if you spend a few billion, you get a few billion
worth. Anyone else can spend the same amount and get the same advantage.


3.  Except when you consider that there are only so many orbital
slots that can be maintained.  (see 1 above as well).  If Bill
manages to launch N satellites and N leaves N/2 orbital slots
available for other uses, then, it's pretty hard to launch
another N satellites at any cost.


If he already has the satellites and is providing the service other
people want at a low price, then other competitors will lose. But so what?
Consumers win. And competition doesn't exist to benefit the competitors.


4.  But, what tends to happen instead is that Bill charges whatever
he can get to recoup his billions until someone else launches
their satellites (has expended the capital).  Then, when they
start to go after revenue, Bill drops his prices to something
they can't sustain because they don't have his bankroll and
have to recoup their costs.  They go out of business and Bill
either buys their satellites, or, they become space-junk.
Bill brings his prices back up to previous levels, and,
consumers lose and the competition loses too.

Even if Bill doesn't actually do this, the knowledge that he could
causes investors to view the new satellite company as a bad risk,
so, Bill's monopoly position prevents investment into competitive
entry into the market.

Finally, since Bill doesn't have to worry about anyone else being
actually able to launch competing satellites, Bill has no reason
to innovate unless Bill can see a much higher profit margin
at the end of said innovation. (look at today's Telco as a prime
example of this form of complacency.  Actually, telco's are
very innovative, but, they focus on regulatory innovation instead
of technical innovation).


If he already has the satellites but is not providing the service other
people want or isn't charging a reasonable price, or both, then anyone
else can make the same infrastructure investment for a comparable cost.
If he's not satisfying demand, the demand is still there, and he's just
losing some of the benefits his infrastructure could be giving him.


5.  But, if you want this analogy to match the current copper plant
in the ground in most of the US, then, you have to also account
for the fact that Bill received 30-45 of his 60 billion in
investment in the form of public subsidies.  Are you going to
give all comers the same public subsidy (blank check)?  Instead,
you end up with exactly what we have today in the telcos.
Semi-regulated monopolies that think they own an infrastructure
built with taxpayer money. (see also 2 above)


No... Actually, the lack of market forces in the 

Re: What do we mean when we say "competition?"

[David Barak]

>--- Owen DeLong <[EMAIL PROTECTED]> wrote:
>> --On November 15, 2005 7:25:54 AM -0800 David Barak
>> <[EMAIL PROTECTED]> 
>> wrote:
>>> --- Matthew Crocker <[EMAIL PROTECTED]> wrote:

> I think what is really represented there is that
> because
> they own an existing network that was built with
> public
> subsidy and future entrants have no such access to
> public
> subsidy to build their own network, ...

Sean's post correctly identified the problem with this
assertion, so I won't 

> The government should recognize that the existing
> build
> has actually been paid for mostly by public subsidy
> anyway
> and as such, should require the ILECs to split into
> two
> separate divisions.  

You mean the existing FIBER build was mostly paid by
public subsidy?  Do you have a reference for that?

> One division would be a
> wholesale
> only infrastructure delivery company that would
> maintain
> the physical infrastructure.  As part of this,
> ownership
> of the physical infrastructure in place would be
> transferred to an appropriate local civil body
> (city,
> county, district, etc.) and said body should have an
> initial 5 year contract with the infrastructure
> portion
> of the ILEC to provide existing services on a
> provider-
> neutral basis (same price to all ILECs, Clecs,
> etc.).
> 
> At the end of that 5 year contract, the maintenance
> of
> the infrastructure should be up for bid, and, if the
> existing ILEC infrastructure portion can't win the
> bid,
> they are out of luck.

I don't know how familiar you are with what the
government contracting process is like, but the word
"unpleasant" comes to mind: it's long, hard, and
cumbersome.  Your model would substantially increase
the amount of government contracting required, so you
would need to be able to show a benefit to society of
corresponding magnitude.  

> Right, but, faced with potential competition, they
> are
> notorious for temporarily lowering prices well below
> sustainable levels in order to eliminate said
> competition.

Are you alleging that the ILECs/RBOCs are providing
services below cost?  If so, call a regulator.  If
not, while the profits may be lower than desired by
the ILEC/RBOC, it's certainlly "sustainable"

> The '96 telecom act did nothing to take the
> last
> mile infrastructure out of the hands of the existing
> ILEC.

You are correct.  However, the '96 telecom act did
give lots of other companies the OPPORTUNITY to build
their own last mile access.  Your proposal actually
drives toward a more monopolistic, regulated
environment.

> However, for any given last-mile buildout, the
> people should retain title to the infrastructure(s)
> and management should be by a carrier-neutral party
> under contract to the people.  (yes, practically
> speaking, s/people/government/, but, I use the
> term people to remind us that the government is
> supposed to be acting as our proxy for such things).
> If a company wants to deploy new infrastructure,
they
> should have equal access to right-of-way to deploy
it.
> However, such access should include a mechanism for
> transfer of ownership (with appropriate
compensation)
> of said infrastructure to the people for carrier
> neutrality after some fixed period of time at
> the option of the people.

So Verizon should be prohibited from building out
FTTH?  I assume that your approach of "the Government
owns all layer 1" would also include 802.11, GSM,
CDMA, and all other network types, right?  If not, why
not?  

> Now, the ILEC can continue to provide
> service at the same price, but, they no longer have
> a cost-basis advantage or the ability to delay,
> defer, interfere with CLEC installs on the same
> infrastructure.

Any interference is currently unlawful, and all of the
companies regulated under sections 271 and 272 have
extensive procedures in place to prevent it.  If
you've got specific complaints about a specific
company, you should be talking to a regulator.

So, to summarize - far less than "all" of the
ILEC/RBOC infrastructure was "paid for with public
funds." (as opposed to user fees), you'd argue for far
greater government participation in the marketplace,
and the removal of any competition for layer 0/1
services, in favor of competition at layers 2 and
higher.  Why is that good again?


David Barak
Need Geek Rock?  Try The Franchise: 
http://www.listentothefranchise.com




__ 
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Re: What do we mean when we say "competition?"

[Sean Donelan]

On Tue, 15 Nov 2005, Owen DeLong wrote:
> I think what is really represented there is that because
> they own an existing network that was built with public
> subsidy and future entrants have no such access to public
> subsidy to build their own network,

Some people may think "public subsidy" implies using taxpayer funds such
as giving incentivies to companies to build factories, job training
programs, re-locate corporate headquarters or even build sports
stadiums.

Are you refering to the exclusive franchises granted to various cable and
telephone companies in parts of the country as the "subsidy?"  Or are you
refering the the High Cost Support funds which used to be implicit
internal transfers in the old Bell System (not taxpayer funds), or now
explicit transfers through the Universial Service Fund? Or are you
referring to the US Department of Agriculture Rural Utilities Service
financing which assists non-RBOC rural telephone and utility companies?

Competitors have been given access to the legacy telephone copper plant
(but generally not the cable coaxial plant) in most of the country. The
legacy copper outside plant is quickly being replaced by post-1996 outside
plant.  Soon there may be little or no pre-1996 outside copper plant
left.  Ownership of inside wiring was transfered to the property owner
a couple of decades ago.

Several municipalities in the US have spent taxpayer funds, or taxpayer
backed, to build a municiple outside plants.

What's interesting is there is relatively little competitive activity or
demand for access in locations (i.e. rural) with the largest government
incentives,  while there is a lot of demand in areas (i.e. urban) which
had minimimal or no government incentives and were funded by shareholders
and other investors.  The RBOCs and MSOs have been selling off their rural
assets to other companies for any years.

So what is it exactly you think taxpayer funds paid for and should now
own?

RE: What do we mean when we say "competition?" (was: Re: [Latest draft of Internet regulation bill])

[David Schwartz]

> --On November 15, 2005 6:28:21 AM -0800 David Barak
> <[EMAIL PROTECTED]> wrote:

> OK... Let me try this again... True competition requires
> that it be PRACTICAL for multiple providers to enter the
> market, including the creation of new providers to seize
> opportunities being ignored by the existing ones.

The worse the existing provider it is, the more practical it is to 
compete
with them. If they are providing what people want at a reasonable price,
there is no need for competition. If they are not, then the it becomes
practical for multiple providers to enter the market. If you assume that the
cost to develop existing infrastructure is not insanely less than the cost
to develop new infrastructure, the isolation from competition comes directly
from the investment.

For example, if Bill Gates took a few billion dollars out of his pocket 
and
launched 80 satellites to provide wireless Internet access, it would be damn
hard to compete with him if he wasn't trying to recover those few billion
dollars. But if you spend a few billion, you get a few billion worth. Anyone
else can spend the same amount and get the same advantage.

If he already has the satellites and is providing the service other 
people
want at a low price, then other competitors will lose. But so what?
Consumers win. And competition doesn't exist to benefit the competitors.

If he already has the satellites but is not providing the service other
people want or isn't charging a reasonable price, or both, then anyone else
can make the same infrastructure investment for a comparable cost. If he's
not satisfying demand, the demand is still there, and he's just losing some
of the benefits his infrastructure could be giving him.

> No... Actually, the lack of market forces in the beginning
> is what allows the incumbent providers to have an advantage.

There is only a lack of market forces if the incumbent is meeting the 
needs
of the consumers. And if they are, there is no need for a competitor.

> Nope... What I want is LESS subsidy to incumbents and
> a recognition that infrastructure built with public funds
> belongs to the public.  Said infrastructure should be equally
> open to all service providers on equal terms, regardless
> of who holds the contract to maintain it.
>
> Imagine instead of today's scenarios, an environment where
> SBC didn't think they OWNed the pipes, but, instead, the
> city's owned the copper in the street and contracted with
>  to maintain said
> infrastructure for the city.  Then, all RBOCs/ILECs/CLECs
> paid the same price to the City through said entity for
> the same services, whether dry copper connection, dark
> fiber, OC-X, etc.  The city would have a term to the contract
> and would put it up for rebid periodically.
>
> That would be market forces at work and not MORE regulation.

How would governments owning the infrastructure and setting the rules 
not
be more regulation? And how would designing a system that favors one set of
business models and effectively prohibits others that would otherwise be
viable not be more regulation?

Competition in business models, infrastructure technology, and the like 
is
just as important (if not more so) as competition in price and services
within a given model.

What happens if the government builds a copper infrastructure and 
someone
else wants to build fiber? How can they compete with the subsidized
infrastructure you propose (what else can you mean when you say the "city's
owned the copper")?

> What we have today is an attempt to reduce regulation without
> recognizing the need to correct the damage already done
> by regulation.

You can't "correct" the damage. It's not possible. All you can do is 
pick
winners and losers *again*. The previous chosen winners and losers don't
really exist anymore in their previous form -- all you can do is more
damage.

DS

Re: What do we mean when we say "competition?"

[Owen DeLong]

--On November 15, 2005 7:25:54 AM -0800 David Barak <[EMAIL PROTECTED]> 
wrote:






--- Matthew Crocker <[EMAIL PROTECTED]> wrote:


That is the exact problem with a [mon|du]opoly.  The
incumbents drive
the price so low (because they own the network) that
it drives out an
potential competition.


So you're complaining that the problem with lack of
competition is that the prices are too LOW?  As a
consumer, I'm thrilled with low price, and would only
change providers for a well-defined benefit or a lower
price.


I think what is really represented there is that because
they own an existing network that was built with public
subsidy and future entrants have no such access to public
subsidy to build their own network, it reduces the costs
to the incumbent provider well below those of any potential
competition.  Thus, faced with competition, they can afford
to reduce prices until competition cannot survive, then,
go back to charging whatever they think they can get away
with.



We don't need 8 fiber networks overlaid to every
home in the US to
provide competition.  We need a single high quality
wholesale only
fiber network which is open to use by all carriers.
I don't want
200' telephone poles down my street with 10 rows of
fiber. It doesn't
make sense.


So should the government charter such a build?  My
understanding is that Verizon and SBC (maybe others,
but I don't know about them) are currently working on
doing a FTTH build at this time.  Presumably, as
they're private companies doing it, they'd like to be
able to be the ones that obtain the primary benefit.
Do you think that a municipal build/new monopoly build
as you describe would be cheaper or better than what
SBC or Verizon are doing?  If so, you should be able
to convince some cities of the math.


The government should recognize that the existing build
has actually been paid for mostly by public subsidy anyway
and as such, should require the ILECs to split into two
separate divisions.  One division would be a wholesale
only infrastructure delivery company that would maintain
the physical infrastructure.  As part of this, ownership
of the physical infrastructure in place would be
transferred to an appropriate local civil body (city,
county, district, etc.) and said body should have an
initial 5 year contract with the infrastructure portion
of the ILEC to provide existing services on a provider-
neutral basis (same price to all ILECs, Clecs, etc.).

At the end of that 5 year contract, the maintenance of
the infrastructure should be up for bid, and, if the
existing ILEC infrastructure portion can't win the bid,
they are out of luck.

I realize there are tons of reasons this won't happen,
not the least of which being that the government stupidly
gave the infrastructure ownership to the ILECs in the
first place and doesn't really have the authority to take
it back.


Again, because of the monopoly held by the
incumbents keeping the
price low enough that you can't afford to build your
own infrastructure.


This is such an astounding comment that it needed to
be singled out: most of the complaints about
monopolies are that they artifically RAISE prices.


Right, but, faced with potential competition, they are
notorious for temporarily lowering prices well below
sustainable levels in order to eliminate said competition.



We don't need competition in the infrastructure
business, we need
competition in the bandwidth business.  That can
only happen if the
infrastructure is regulated, open and wholesale
only.   The RBOCs
should be split up into a wholesale *only* division
(owns the poles,
wires, buildings,switches) and a services *retail*
division (owns the
dialtone, bandwidth, customers ).   The wholesale
division should
sell service to the retail division at a regulated
TELRIC based price
which will allow the wholesale division to make
enough money to build/
maintain the best infrastructure in the world.  Any
competitive
service provider can buy the same services at the
same price as RBOC
Retail.  Regulated such that wholesale profit can't
subsidize retail
services.  In high density areas there may be
alternate
infrastructure providers that can sell to CSPs and
in rural america
there will be one infrastructure provider and many
CSPs


Aren't you pretty much describing the '96 telecom act?
 The result has been the glut of inter-city fiber, and
a dearth of advanced access services at the
rural/suburban edge.   Saying "we don't need
competition in infrastructure, only in bandwidth"
ignores the fact that infrastructure upgrades are
required to support increased bandwidth.  In addition,
why treat L0/1 infrastructure in a different way than
L2/3 infrastructure?


Nope.  The '96 telecom act did nothing to take the last
mile infrastructure out of the hands of the existing
ILEC.


> This IS the market at work.  If you want it to be
> different, what you want is more, not less
regulation.
>  That may or may not be a good thing, but let's
just
> be very clear a

Re: What do we mean when we say "competition?" (was: Re: [Latest draft of Internet regulation bill])

[Owen DeLong]

--On November 15, 2005 6:28:21 AM -0800 David Barak <[EMAIL PROTECTED]> 
wrote:






--- Owen DeLong <[EMAIL PROTECTED]> wrote:

True
competition requires the ability
for multiple providers to enter into the market,
including the creation
of new providers to seize opportunities being
ignored by the existing ones.


Technically, lots of other providers CAN enter the
market - it's just very expensive to do so.  If there
are customers who are not receiving service from one
of the incumbent providers, a third party is certainly
welcome to {dig a trench | build wireless towers | buy
lots of well-trained pigeons for RFC 1419 access} and
offer the services to the ignored customers.

The problem is that the capital expenditures required
in doing so are very, very high, and most companies
don't see the profit in doing so.


OK... Let me try this again... True competition requires
that it be PRACTICAL for multiple providers to enter the
market, including the creation of new providers to seize
opportunities being ignored by the existing ones.


If two companies can act as gatekeeper for the
entire market in a given
area, that is not an environment where market forces
carry much meaning.


Actually, here's where I'd disagree: market forces are
exactly the thing which is keeping other providers
OUT.  It's too expensive for them to buy their way
into these areas, and during all of the time when
access was mandated to be (relatively) cheap by law,
very few third parties actually built their own
infrastructure all the way to homes.  There are some
competitive cable plants in some cities (I remember
Starpower/RCN doing this in DC), but I'm not aware of
any residential phone providers who built all the way
out to houses exclusively on their own infrastructure.


No... Actually, the lack of market forces in the beginning
is what allows the incumbent providers to have an advantage.
The incumbent providers received huge subsidies from the
government to build the existing infrastructure, and, continue
to receive said subsidies (universal service).  New providers,
OTOH, are being forced to build parallel infrastructure
and collect USF taxes while not receiving USF subsidies.
In some cases, rather than build parallel infrastructure,
they have the option of leasing infrastructure from
the incumbent providers, but, that has it's other lack-of-
market force problems.

If it were equally expensive for the existing providers and
the new providers, there would be no lack of competition.
The fact that the existing providers have an economic
advantage as a result of subsidies is not a market force,
it is the lack of a level playing field preventing
market forces from acting.



This IS the market at work.  If you want it to be
different, what you want is more, not less regulation.
 That may or may not be a good thing, but let's just
be very clear about it.


Nope... What I want is LESS subsidy to incumbents and
a recognition that infrastructure built with public funds
belongs to the public.  Said infrastructure should be equally
open to all service providers on equal terms, regardless
of who holds the contract to maintain it.

Imagine instead of today's scenarios, an environment where
SBC didn't think they OWNed the pipes, but, instead, the
city's owned the copper in the street and contracted with
 to maintain said
infrastructure for the city.  Then, all RBOCs/ILECs/CLECs
paid the same price to the City through said entity for
the same services, whether dry copper connection, dark
fiber, OC-X, etc.  The city would have a term to the contract
and would put it up for rebid periodically.

That would be market forces at work and not MORE regulation.

What we have today is an attempt to reduce regulation without
recognizing the need to correct the damage already done
by regulation.

Owen



--
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RE: What do we mean when we say "competition?"

[David Schwartz]

> >> That is the exact problem with a [mon|du]opoly.  The
> >> incumbents drive
> >> the price so low (because they own the network) that
> >> it drives out an
> >> potential competition.
> >
> > So you're complaining that the problem with lack of
> > competition is that the prices are too LOW?  As a
> > consumer, I'm thrilled with low price, and would only
> > change providers for a well-defined benefit or a lower
> > price.

> Low prices of the monopoly is driving out viable competition.  Once
> competition is gone the prices WILL be raised.

I hear this claim a lot, but it's very hard to believe. Surely raising 
the
prices will just bring the competition back.

It's basically just a "damned if you do, damned if you don't". If the
prices are high, then monopoly is hurting the consumer. If prices are low,
then monopoly is hurting the competition.

> Competition brings innovation of products and services, not just
> lower prices.

Right, except this destroys your previous point. If competitors can 
bring
innovation and not just low prices, then low prices shouldn't drive out
competitors.

The flip side of the "everything is bad" argument is that everything is
good. Specifically:

1) Low prices are good for consumers.

2) High prices are good for competitors.

3) Prices don't matter that much to competitors because they can bring
innovation, not just better pricing.

DS

Re: What do we mean when we say "competition?"

[Matthew Crocker]

That is the exact problem with a [mon|du]opoly.  The
incumbents drive
the price so low (because they own the network) that
it drives out an
potential competition.


So you're complaining that the problem with lack of
competition is that the prices are too LOW?  As a
consumer, I'm thrilled with low price, and would only
change providers for a well-defined benefit or a lower
price.


Low prices of the monopoly is driving out viable competition.  Once  
competition is gone the prices WILL be raised.
Competition brings innovation of products and services, not just  
lower prices.



So should the government charter such a build?  My
understanding is that Verizon and SBC (maybe others,
but I don't know about them) are currently working on
doing a FTTH build at this time.


Yes Verizon/SBC are building FTTH in limited areas.  They are doing  
it with profit from their government granted monopolies and with FCC  
assurances that they will be able to maintain the monopoly on new  
fiber builds.  So, in a sense the government is chartering a FTTH  
build. They just are doing it in such a way as to kill competition  
and eventually hurt the nations economic development.  Short term it  
is a good thing, long term it is economic suicide.



Presumably, as
they're private companies doing it, they'd like to be
able to be the ones that obtain the primary benefit.
Do you think that a municipal build/new monopoly build
as you describe would be cheaper or better than what
SBC or Verizon are doing?  If so, you should be able
to convince some cities of the math.


Yes, and I have  there are 4 muni fiber builds around me of which I  
am building a PON deployment over 2 of them.  I am a *little* service  
provider,  couple hundred megs of bandwidth,  couple million $/year  
in revenue.  I just picked up/installed my phone switch so now I can  
offer voice/data over the PON.  So, in my small market (Western MA) I  
can provide a competitive service to  Verizon/Comcast in certain muni- 
built fiber networks.  I'm also a CLEC building out COs to provide  
ADSL2+, g.SHDSL service in areas (new products/services).  It is slow  
going because of limited budgets but I'm having a hell of a lot of  
fun while doing it :)




Again, because of the monopoly held by the
incumbents keeping the
price low enough that you can't afford to build your
own infrastructure.


This is such an astounding comment that it needed to
be singled out: most of the complaints about
monopolies are that they artifically RAISE prices.


Oh,  you can bet that pricing will be raised.  As a monopoly you use  
your monopoly advantage to squash the competition.  You do this by  
driving the price down.  Once the competition is cleared from the  
market you are free to raise pricing at will.  The only thing that is  
saving us at this point is 'The Act' which is systematically getting  
dismantled by the RBOCs.  My only hope is Congress grows a pair and  
comes out with a sane telecom act in 2006.




Aren't you pretty much describing the '96 telecom act?
 The result has been the glut of inter-city fiber, and
a dearth of advanced access services at the
rural/suburban edge.   Saying "we don't need
competition in infrastructure, only in bandwidth"
ignores the fact that infrastructure upgrades are
required to support increased bandwidth.  In addition,
why treat L0/1 infrastructure in a different way than
L2/3 infrastructure?


The spirit of The Act maybe but not the implementation.  Congress had  
a good idea, they just left that damn word in there (i.e.  
'impairment') which is what all of the fighting has been about.  As a  
CLEC I am no longer impaired when I don't have access to Verizon dark  
fiber.  So now I have to build my own which required HUGE capital,   
taller telephone poles,  uglier streets  it is impractical to  
have >1 fiber networks in the markets that I serve (rural, suburban).





This IS the market at work.  If you want it to be
different, what you want is more, not less

regulation.

 That may or may not be a good thing, but let's

just

be very clear about it.


More regulation of the physical infrastructure (the
expensive piece)
and less regulation of the bits to foster
competitive solutions and
bring along new innovations.   The future
innovations are not going
to revolve around new types of fiber.  They will
revolve around what
can be done with high bandwidth to everyone.


First, I wouldn't be so sure to rule out new
improvements in fiber or other physical transmission
media as important - as an example, I think the
widespread adoption of 802.11 has been part of a huge
shift in the way people use the Internet.  That said,
I agree that the biggest innovations are likely to be
applications, not media.

So let me take the devil's advocate position: why
should prices be raised so that multiple ISPs can get
a layer-2/3 connection to customers without having
their own layer-1 infrastructure?   Is there some
service which is provided which w

Re: What do we mean when we say "competition?" (was: Re: [Latest draft of Internet regulation bill])

[Michael . Dillon]

> The RBOCs 
> should be split up into a wholesale *only* division (owns the poles, 
> wires, buildings,switches) and a services *retail* division (owns the 
> dialtone, bandwidth, customers ).   The wholesale division should 
> sell service to the retail division at a regulated TELRIC based price 
> which will allow the wholesale division to make enough money to build/ 
> maintain the best infrastructure in the world. 

This is more or less what BT has done in the UK by splitting 
off all the field engineering into a separate company called
Openreach.

UK already has had a thriving digital radio network and
digital TV network for several years. They are already starting
to shut down analog TV transmitters. We have lept ahead in 
deployment of broadband with a variety of providers in most
cities. Perhaps there are lessons to be learned here?

> More regulation of the physical infrastructure (the expensive piece) 
> and less regulation of the bits to foster competitive solutions and 
> bring along new innovations.   The future innovations are not going 
> to revolve around new types of fiber.  They will revolve around what 
> can be done with high bandwidth to everyone.

I doubt if even the RBOC executives understand this fundamental
distinction.

--Michael Dillon

Re: What do we mean when we say "competition?"

[David Barak]

--- Matthew Crocker <[EMAIL PROTECTED]> wrote:

> That is the exact problem with a [mon|du]opoly.  The
> incumbents drive  
> the price so low (because they own the network) that
> it drives out an  
> potential competition.

So you're complaining that the problem with lack of
competition is that the prices are too LOW?  As a
consumer, I'm thrilled with low price, and would only
change providers for a well-defined benefit or a lower
price.  

> 
> We don't need 8 fiber networks overlaid to every
> home in the US to  
> provide competition.  We need a single high quality
> wholesale only  
> fiber network which is open to use by all carriers. 
> I don't want  
> 200' telephone poles down my street with 10 rows of
> fiber. It doesn't  
> make sense.

So should the government charter such a build?  My
understanding is that Verizon and SBC (maybe others,
but I don't know about them) are currently working on
doing a FTTH build at this time.  Presumably, as
they're private companies doing it, they'd like to be
able to be the ones that obtain the primary benefit. 
Do you think that a municipal build/new monopoly build
as you describe would be cheaper or better than what
SBC or Verizon are doing?  If so, you should be able
to convince some cities of the math.

> Again, because of the monopoly held by the
> incumbents keeping the  
> price low enough that you can't afford to build your
> own infrastructure.

This is such an astounding comment that it needed to
be singled out: most of the complaints about
monopolies are that they artifically RAISE prices.  

> 
> We don't need competition in the infrastructure
> business, we need  
> competition in the bandwidth business.  That can
> only happen if the  
> infrastructure is regulated, open and wholesale
> only.   The RBOCs  
> should be split up into a wholesale *only* division
> (owns the poles,  
> wires, buildings,switches) and a services *retail*
> division (owns the  
> dialtone, bandwidth, customers ).   The wholesale
> division should  
> sell service to the retail division at a regulated
> TELRIC based price  
> which will allow the wholesale division to make
> enough money to build/ 
> maintain the best infrastructure in the world.  Any
> competitive  
> service provider can buy the same services at the
> same price as RBOC  
> Retail.  Regulated such that wholesale profit can't
> subsidize retail  
> services.  In high density areas there may be
> alternate  
> infrastructure providers that can sell to CSPs and
> in rural america  
> there will be one infrastructure provider and many
> CSPs

Aren't you pretty much describing the '96 telecom act?
 The result has been the glut of inter-city fiber, and
a dearth of advanced access services at the
rural/suburban edge.   Saying "we don't need
competition in infrastructure, only in bandwidth"
ignores the fact that infrastructure upgrades are
required to support increased bandwidth.  In addition,
why treat L0/1 infrastructure in a different way than
L2/3 infrastructure?

> > This IS the market at work.  If you want it to be
> > different, what you want is more, not less
> regulation.
> >  That may or may not be a good thing, but let's
> just
> > be very clear about it.
> 
> More regulation of the physical infrastructure (the
> expensive piece)  
> and less regulation of the bits to foster
> competitive solutions and  
> bring along new innovations.   The future
> innovations are not going  
> to revolve around new types of fiber.  They will
> revolve around what  
> can be done with high bandwidth to everyone.

First, I wouldn't be so sure to rule out new
improvements in fiber or other physical transmission
media as important - as an example, I think the
widespread adoption of 802.11 has been part of a huge
shift in the way people use the Internet.  That said,
I agree that the biggest innovations are likely to be
applications, not media.  

So let me take the devil's advocate position: why
should prices be raised so that multiple ISPs can get
a layer-2/3 connection to customers without having
their own layer-1 infrastructure?   Is there some
service which is provided which wouldn't be
cheaper/simpler to mandate that the incumbent provide?
 The content providers and innovators you mention
should be able to work with the customers of any ISP,
right?  

I guess what I'm saying is that "competition" is a
virtue only when it leads to either improved or
cheaper service.  Do you think that there are
improvements to service that alternative providers
could make which justify the cost of the regulation
you describe?



David Barak
Need Geek Rock?  Try The Franchise: 
http://www.listentothefranchise.com



__ 
Yahoo! FareChase: Search multiple travel sites in one click.
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Re: What do we mean when we say "competition?" (was: Re: [Latest draft of Internet regulation bill])

[Matthew Crocker]

Technically, lots of other providers CAN enter the
market - it's just very expensive to do so.  If there
are customers who are not receiving service from one
of the incumbent providers, a third party is certainly
welcome to {dig a trench | build wireless towers | buy
lots of well-trained pigeons for RFC 1419 access} and
offer the services to the ignored customers.


Technically anything is possible,  I could walk on the moon if I had  
enough $$.



The problem is that the capital expenditures required
in doing so are very, very high, and most companies
don't see the profit in doing so.


That is the exact problem with a [mon|du]opoly.  The incumbents drive  
the price so low (because they own the network) that it drives out an  
potential competition.


We don't need 8 fiber networks overlaid to every home in the US to  
provide competition.  We need a single high quality wholesale only  
fiber network which is open to use by all carriers.  I don't want  
200' telephone poles down my street with 10 rows of fiber. It doesn't  
make sense.


Actually, here's where I'd disagree: market forces are
exactly the thing which is keeping other providers
OUT.  It's too expensive for them to buy their way
into these areas, and during all of the time when
access was mandated to be (relatively) cheap by law,
very few third parties actually built their own
infrastructure all the way to homes.  There are some
competitive cable plants in some cities (I remember
Starpower/RCN doing this in DC), but I'm not aware of
any residential phone providers who built all the way
out to houses exclusively on their own infrastructure.



Again, because of the monopoly held by the incumbents keeping the  
price low enough that you can't afford to build your own infrastructure.


We don't need competition in the infrastructure business, we need  
competition in the bandwidth business.  That can only happen if the  
infrastructure is regulated, open and wholesale only.   The RBOCs  
should be split up into a wholesale *only* division (owns the poles,  
wires, buildings,switches) and a services *retail* division (owns the  
dialtone, bandwidth, customers ).   The wholesale division should  
sell service to the retail division at a regulated TELRIC based price  
which will allow the wholesale division to make enough money to build/ 
maintain the best infrastructure in the world.  Any competitive  
service provider can buy the same services at the same price as RBOC  
Retail.  Regulated such that wholesale profit can't subsidize retail  
services.  In high density areas there may be alternate  
infrastructure providers that can sell to CSPs and in rural america  
there will be one infrastructure provider and many CSPs



This IS the market at work.  If you want it to be
different, what you want is more, not less regulation.
 That may or may not be a good thing, but let's just
be very clear about it.


More regulation of the physical infrastructure (the expensive piece)  
and less regulation of the bits to foster competitive solutions and  
bring along new innovations.   The future innovations are not going  
to revolve around new types of fiber.  They will revolve around what  
can be done with high bandwidth to everyone.


--
Matthew S. Crocker
Vice President
Crocker Communications, Inc.
Internet Division
PO BOX 710
Greenfield, MA 01302-0710
http://www.crocker.com