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phattieg
join:2001-04-29
Winter Park, FL
 ·Verizon Wireless B..
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| reply to rachelsfx
Re: One Question:
Lets consider for a moment that you ARE an ILEC. Why don't YOU buy your own resources to built your own backbone into the network, instead of leasing crap that others worked hard to build. This is why these companies are getting so big. Consider the fact that they all started small like everyone else, they are huge now due to proper management and knowhow. If others followed in their footsteps, they too would have success.
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Cem C
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| reply to rachelsfx
The (primarily) copper infrastructure going to tens of millions of homes is clearly a natural monopoly. Maybe 2 or 3 sets of infrastructure (ILEC + CableCO), but economically it certainly does not make sense to have 10 telcos dig up all the roads and lay new cables to tens of millions of homes. This is like asking trucking companies to build their own roads, and having duplicate roads in all the neighbourhoods.
Keep in mind as well that the copper telephone line infrastructure as built out over decades by the bells ina monopoly environment with a cost+ guarantee (i.e. no investment risk, the regulator guaranteed a return + profit on investment). This investment has been more than amortized by now and no new significant investment is going into the copper plant. The copper wires you get phone and DSL service from is the same copper cable laid decade(s) ago.
New investment is in DSLAMS and backhaul. The incumbents try to muddle this. "We are investing tons in DSL, so don't remove our incentives." But they are not investing in the copper plant, and the main thing CLECS and competitors want is access to the EXISTING, ALREADY AMORTIZED copper at cost+reasonable profit.
In France the regulator has been successful at LOCAL LOOP UNBUNDLING and now some of the most competitive ADSL offers in the world are there. ADSL take-up has taken off. Everyone, including the incumbent, is investing in the latest 20Mb/s+ ADSL2+ DSLAMS, in triple play offers, etc. This is what competition is about.
Monopoly or duopoly supply is not competition. The ILECS model of vertical integratition is a recipe for diaster. Already the ILECS are now pushing to extend their integrated domain to VOIP. Pretty soon they will be degrading the service of VONAGE, and making VOIP bundled offers of their own. "Why should VONAGE free ride on my network, this is killing my incentives to investm etc" We have heard all before and we are starting to hear it again.
As for the "well cable should be forced to share too then" argument, I agree. | |
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