On 11/21/2014 7:39 PM, Blair Davis wrote:
Just and reasonable... Give me a break.
There is a reason the carriers let the POTS network decay... My wife,
before she died, spent 28 years with Michigan Bell... From before
Judge Greene, thru Ameritec and then SBC. She saw this from the inside.
Because they were forced to allow others to use their wired plant at
prices below the cost of maintenance, let alone upgrades.
That was the Bell party line, for public consumption, but it wasn't true.
Section 251 (sections of the Communications Act, 47 USC, beginning with
2 are in Title II) has the rules for demonopolization of PSTN carriers.
They had a de jure monopoly; they still have a natural monopoly on
mass-market services. So they have facilities that are a necessary inpu
to competitive providers. They built their networks using rate of return
regulation and de jure monopoly status (essentially a guarantee of
profit) and that put them at the 24 mile line in the competitive marathon.
Section 251 says that ILECs specifically and uniquely have to provide
unbundled network elements at forward-looking cost. Just what "cost" is
is not a simple answer. Cost is not price. Cost can be embedded direct
cost, fully distributed (various methods), long-run incremental, total
service long-run incremental, total element long-run incremental, etc.
Lots of room to argue cost, and that was a lot of fun back in the rate
case days, to do cost studies and argue over details.
Non-ILECs have fewer obligations than ILECs. There is a separate
fundamental right of common carriage if a company is deemed a common
carrier, but the "just and reasonable" standard is generally enforced
only to what I call a "shocks the conscience" level. No formulas, just
don't horribly offend the Commission. It is very rarely invoked.
The Bells stopped maintaining their plant because in 1992-1993, they
transitioned from rate of return regulation to price cap ("alternate
form of") regulation. Under rate of return, their total profit was a
percentage (11.25% return was the last number, still in use) of their
rate base (undepreciated capital plant). So the investment was to
invest heavily; investing in rural areas paid really well because the
high cost would be recoverable from urban monopoly ratepayers. Under
AFOR, though, some basic service prices are capped but not profits, so
they could increase profits by reducing costs. And they sure did! AFOR
was met by massive layoffs and a general decline in maintenance.
Accountants running companies devalue the future, so disinvestment look
good to short term profits, and CEOs live for quarterly bonuses, which
are not based on how they position the company for 10 years out. Well,
20 years of AFOR and the chickens have come home to roost. The plant is
very heavily depreciated, not maintained, and the parent companies have
put their capital into wireless, which has been more profitable lately.
Such is deregulation, helping turn the USA into a third world country
while rentiers take the money and run.
Do you want to be forced to allow other to use your wireless network?
And have your costs and reimbursements determined by bureaucrats?
This would not apply to WISPs even in the unlikely event that WISPs were
covered by Title II (which I've strongly opposed). They were never
common carriers, and WISP plant is generally not suited for it. (There
are wireless common carriers, and you could create one if you wanted,
but it would be a choice.) And non-ILEC prices are never set by
regulators. The Just & Reasonable standard is only raised when a price
is truly out of line, like the $68 3-minute pay phone call, or prison
phone calls (always collect, typically at dollars per minute, which the
FCC is cracking down on now). Not even ILEC retail rates are set by
regulators any more, just wholesale rates, which are regulated as part
of the must-carry nature of the PSTN.
Title II, if forced on the small wisps, will kill us.
Probably true, but it's not the facilities they're talking about now,
it's the data itself, which Title II was never meant to regulate, so it
wouldn't stand up in court.
--
On 11/21/2014 6:19 PM, Fred Goldstein wrote:
On 11/21/2014 5:47 PM, Drew Lentz wrote:
So here's what sparked the question. I was trying to get some
point-counterpoint going on with a friend of mine and found some
pretty good arguments on each. This article made me think about it
all a little differently:
http://www.netcompetition.org/congress/the-multi-billion-dollar-impact-of-fcc-title-ii-broadband-for-google-entire-internet-ecosystem
To Fred's point, the article mentions:
"That's because of the way the law and the forbearance provision are
written; they apparently do not allow for any immaculate ruling
where the FCC somehow rules the service and carrier of Internet
traffic are regulated, but not the Internet traffic itself that is
precisely what defines the service and carrier."
The article is pure garbage. Read the January ruling of the DC
Circuit. It was quite clear that the Computer II framework was
legal. And the Telecom Act was meant to memorialize that, not
overturn it. The Computer II framework very explicitly held that the
"basic" carrier function was regulated while the higher-layer
"enhanced" traffic was not. The reason the FCC keeps getting in
trouble is that they don't want restore that working model, since it
would hurt some carriers' fee-fees.
The idea that Title II requires metered pricing makes less sense than
the average diarrhea that comes from Louis Gohmerts' tuchus. The
.0007 rate is for termination of local telephone calls; it has
nothing to do with bits or data services. Whoever wrote the article
is either a) an utter ignoramus; b) an utterly contemptible liar, or
c) both.
There are all sorts of reasons why Title II would break the
Internet. But applied to the access layer, it would simply mean that
ISPs could lease DSL for a certain price per line per month, and
perhaps a certain number of cents per gigabit, but that price would
have to be "just and reasonable" in light of its actual cost to
provision.
Oh, and Scott Cleland is now a lobbyist for the Bells, a professional
liar who used to pretend to be an industry "analyst" for the Wall
Street crowd, but who always shilled for the Bells.
Anyhow, not trying to beat a dead horse, but this got me questioning
things :) Have a great weekend y'all!
-drew
On Fri, Nov 21, 2014 at 4:45 PM, Drew Lentz <[email protected]
<mailto:[email protected]>> wrote:
So here's what sparked the question. I was trying to get some
point-counterpoint going on with a friend of mine and found some
pretty good arguments on each. This article made me think about
it all a little differently:
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Interisle Consulting Group
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Fred R. Goldstein k1io fred "at" interisle.net
Interisle Consulting Group
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