how-to block ads
|
marigolds
Gainfully employed, finally
Premium,MVM
join:2002-05-13
Saint Louis, MO
| reply to John T
Re: "Consumer friendly"-- which consumers?
Build-out requirements apply only to video, not to broadband internet.
Also, build-out requirements do not apply for competitive overbuilds nor unprofitable overbuilds. What build-out requirements do, is require service for marginally profitable non-competitive areas. | |
John T
@btcentralplus.com
| Of course, build-out requirements are friendly for some consumers but less so for others. Fewer build-out requirements are generally better for the (generally wealthier and/or urban) consumers who live in areas that are actually profitable to serve. Build-out requirements generally do a lot to make the profitable consumers subsidize the less-profitable (especially those in rural areas), rather than just the company doing the subsidizing.
In more extreme cases, companies may choose to just not build a network that will be unprofitable if they have to build it everywhere. That same network might be profitable if the company is allowed to cherry-pick. I'm not sure that NO ONE getting a fast network is better than only a few, but for some the "digital divide" is very important.
Verizon doesn't make enormous profits from FIOS, which only exists in wealthy neighborhoods now because it's not profitable anywhere else and still isn't profitable there for many years yet. They DO make tremendous profits from their legacy phone network (and DSL), which was built with all sorts of build-out requirements and monopoly franchising and regulation.
Consumer-friendly regulation would focus on forcing Verizon, AT&T, and Qwest to allow cheap resale of their phone networks for DSL. The phone network is the one that was subsidized and regulated all these years with build-out requirements, and the capital spending has all been paid for. Focusing on build-out requirements for a not-even-profitable-yet network is by contrast quite strange to me.
Incumbents, like Verizon in phones (and DSL) and the cablecos in TV, should be regulated, especially since monopoly franchises helped pay for their networks. Competitive upstarts should have a freer hand, even when it's a company that is an incumbent in another area, like cable cos doing phones and telcos doing TV, particularly when the competition involves building tremendous new infrastructure at massively unprofitable expense. | |
|
