openbox9
join:2004-01-26
Alexandria, VA
 ·AT&T Southeast
| reply to axus
Re: I'm shocked, just shocked I say
I did not imply that phone companies sell internet service to consumers for no profit. Ok, may be freeloading was slightly strong worded. How about, it's time for competitors to compete on even ground and stop undercutting the "competitors" that paid for the infrastructure in the first place because the CLECs don't have the same expenses. Who determines the "wholesale cost"? |
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nasadude
join:2001-10-05
Rockville, MD
 ·Comcast
| said by openbox9  :.. stop undercutting the "competitors" that paid for the infrastructure in the first place because the CLECs don't have the same expenses... the major ILECs didn't pay for that infrastructure, consumers did through tax breaks, govt guaranteed rates of return and regulations controlling the market. There was no financial risk whatsoever to the ILECs when they did their buildout and they didn't have to worry about the "playing field" because they WERE the playing field.
If the playing field were to be truly equal (or at least more equal), the ILECs would be forced to divest themselves of last mile assets and all competitors in an area (including the ILECs) would pay the same rate to use that last mile. Instead, the last mile and other critical assets are controlled by the ILECs and competitors have to come to them for access.
How in the hell is a start up, or even a large "new entrant", supposed to come up with the money to build identical last mile access, right alongside ILEC copper or fiber? Will investors loan money to a business that has to spend billions building infrastructure before they even have a sustainable subscriber base? and when they have to compete for those subscribers with entrenched incumbents with tremendous market power? how is a CLEC going to be able to charge a high enough price for services to get a reasonable rate of return on investment when the ILECs can easily undercut their price?
When you can explain to me the business model for a CLEC to make a profit competing against the ILECs by building their own last mile infrastructure, I will be willing to concede that CLECs need to build their own last mile infrastructure. |
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quetwo
That VoIP Guy
Premium
join:2004-09-04
East Lansing, MI
| reply to openbox9
Wholesale cost is determined on a state-by-state basis by the public service comission. The LECs go infront of the boards and tell them how much it costs them per line to run a dry pair (no service, just battery). This is the cost that was allowed to the CLECs |
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nasadude
join:2001-10-05
Rockville, MD
·Comcast
| said by quetwo :.. The LECs go infront of the boards and tell them how much it costs them per line to run a dry pair (no service, just battery). .. [sarcasm] and I'm sure this information is as complete and accurate as the information the FCC collects on broadband deployment [/sarcasm] |
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openbox9
join:2004-01-26
Alexandria, VA
·AT&T Southeast
| reply to nasadude
said by nasadude :Instead, the last mile and other critical assets are controlled by the ILECs and competitors have to come to them for access. What about cablecos?said by nasadude :When you can explain to me the business model for a CLEC to make a profit competing against the ILECs by building their own last mile infrastructure, I will be willing to concede that CLECs need to build their own last mile infrastructure. Sounds like a double standard to me. Allow CLECs access to infrastructure so that they can compete with companies who O&M the network when there's already competition in a lot of markets that aren't being forced to provide similar access. Why should the ILECs be forced to allow CLECs to compete with them on their own network? I'm not seeing this great increase in competition or lower costs for consumers. What's the point beyond adding extra bureaucracy? |
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openbox9
join:2004-01-26
Alexandria, VA
·AT&T Southeast
| reply to quetwo
said by quetwo :costs them per line to run a dry pair (no service, just battery) I assume by cost to "run" you also include installation, deployment, and upgrade of infrastructure? |
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KoolMoe
Aw Man
Premium
join:2001-02-14
Annapolis, MD
clubs: | It's completely up to the Telcos to preach their wholesale rate. I almost guarantee there is profit built-in to the rate they present.
KM |
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sporkme
drop the crantini and move it, sister
Premium,MVM
join:2000-07-01
Morristown, NJ
·Optimum Online
| said by KoolMoe :It's completely up to the Telcos to preach their wholesale rate. I almost guarantee there is profit built-in to the rate they present. I totally guarantee it. 
Where this myth that they "give the lines away to competitors" came from is beyond me... Covad and others pay dearly for dry copper for "naked" ADSL and SDSL. |
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cdru
Go Colts
Premium,MVM
join:2003-05-14
Fort Wayne, IN
| reply to nasadude
said by nasadude :the major ILECs didn't pay for that infrastructure, consumers did through tax breaks, govt guaranteed rates of return and regulations controlling the market. There was no financial risk whatsoever to the ILECs when they did their buildout and they didn't have to worry about the "playing field" because they WERE the playing field. The telcos received subsidies, tax breaks, bailouts, etc that ultimately offset some of the cost. They way you have things worded it would appear to the uninformed that the telcos didn't pay a dime and it was completely tax payer funded which definitely wasn't the case.
As such, there was financial risk to the ILECs. Yes it was a reduced risk because of the financial help, but it also wasn't without risk either.
Not trying to take sides in the debase (although I lean towards the ILECs side) but just want to set the record straight. |
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nasadude
join:2001-10-05
Rockville, MD
·Comcast
| reply to openbox9
said by openbox9 :Sounds like a double standard to me. Allow CLECs access to infrastructure so that they can compete with companies who O&M the network when there's already competition in a lot of markets that aren't being forced to provide similar access. Why should the ILECs be forced to allow CLECs to compete with them on their own network? I'm not seeing this great increase in competition or lower costs for consumers. What's the point beyond adding extra bureaucracy? Ok, let's just cut to the chase. It looks like I'm not going to convince you and you certainly aren't going to convince me.
The fact is, the U.S. broadband market IS NOT COMPETITIVE. You can say it is, Martin can say it is McDowell can say it is, Verizon can say it is, ATT can say it is, BUT THAT DOESN'T MAKE IT TRUE. The ILECs control last mile access and no other company is going to step up and make the investment (except perhaps in a very limited geographic area) needed to create a duplicate last mile infrastructure - it's stupid, it's wasteful and it's highly unlikely that company will succeed.
If competition in the U.S. depends on competitors to step up and create duplicate last mile infrastructure, the U.S. will never have a competitive broadband market.
The current situation may be good for the ILECs and their shareholders, but it's not good for consumers and it's not good for this country. |
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openbox9
join:2004-01-26
Alexandria, VA
·AT&T Southeast
| said by nasadude :Ok, let's just cut to the chase. It looks like I'm not going to convince you and you certainly aren't going to convince me. The fact is, the U.S. broadband market IS NOT COMPETITIVE. Fair enough...we'll agree to disagree because I'd say that the U.S broadband market is competitive. |
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openbox9
join:2004-01-26
Alexandria, VA
·AT&T Southeast
| reply to KoolMoe
That's fine and I would hope that the telcos aren't breaking even or losing money by selling access to CLECs. The root of the problem is still that the ILECs are forced to provide this access and I'm having a difficult time seeing benefits for anyone except for the poor CLECs who "can't afford to compete and need a handout to get into business". Here's an idea. If CLECs really want to provide service and can't afford to overbuild infrastructure, maybe they should look at buying the infrastructure from the ILEC. But then again, I'm sure they can't afford that option either. |
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nasadude
join:2001-10-05
Rockville, MD
·Comcast
| reply to openbox9
said by openbox9 :Fair enough...we'll agree to disagree because I'd say that the U.S broadband market is competitive. how many choices of broadband provider do you have?
I have ONE choice, comcast. I live a few miles outside the DC metro beltway in Maryland, in a densely populated area.
FYI, Maryland population density was ranked 5th highest in the nation in 2006.
you obviously must have several choices of broadband provider. |
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openbox9
join:2004-01-26
Alexandria, VA
·AT&T Southeast
| said by nasadude :how many choices of broadband provider do you have? I live in southern Alabama the Florida Panhandle between Pensacola and Fort Walton Beach...definitely not a metropolis. For consumer broadband, I have cable, DSL, cellular (Verizon, Sprint, AT&T), WISP, and satellite. |
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nasadude
join:2001-10-05
Rockville, MD
·Comcast
| said by openbox9 :said by nasadude :how many choices of broadband provider do you have? I live in southern Alabama the Florida Panhandle between Pensacola and Fort Walton Beach...definitely not a metropolis. For consumer broadband, I have cable, DSL, cellular (Verizon, Sprint, AT&T), WISP, and satellite. satellite and cellular are not substitutes for DSL and cable; WISP may be, depending on speeds and reliability.
I am in a monopoly area, you are basically in a duopoly area. At least you have one more choice than I do.
The FCC and the ILECs love for people to equate cellular broadband, BPL, satellite, etc. for direct competition with wireline broadband. They aren't; direct competition would be another wireline (or 700Mhz) competitor. |
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openbox9
join:2004-01-26
Alexandria, VA
·AT&T Southeast
| said by nasadude :satellite and cellular are not substitutes for DSL and cable For a vast majority of consumers, they are substitutes. The biggest issue with satellite and cellular right now are cost...but then again you can say the same thing about DSL's dial tone requirement and cable's expensiveness.said by nasadude :I am in a monopoly area, you are basically in a duopoly area. At least you have one more choice than I do. I am not in a duopoly.said by nasadude :direct competition would be another wireline (or 700Mhz) competitor. Don't limit your options. Competition exists, and is growing. BTW, your 700 MHz isn't the panacea that everyone seems to think that it's going to be. |
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fiberguy
My views are my own.
Premium
join:2005-05-20
| reply to nasadude
Let's take this argument one step further... How much of the backbone ISN'T provided by AT&T, Qwest, or Verizon? At some point, even the cable companies were buying services from a telco provider. In the long run, part of the cable subscriber's money was winding up in the pockets of the bell.
--
"Complaining is the least path of resistance for the self-serving, the lazy, and I’m told it’s a woman’s prerogative..." |
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openbox9
join:2004-01-26
Alexandria, VA | So? |
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fiberguy
My views are my own.
Premium
join:2005-05-20 | So.. what? Enlighten us on on your "so"... Don't know how to respond. |
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openbox9
join:2004-01-26
Alexandria, VA | I was commenting on your statement about telecoms owning and managing portions of the internet backbone. I didn't see the relevance. |
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