how-to block ads
|
DaneJasper
Sonic.Net
Premium,VIP
join:2001-08-20
Santa Rosa, CA
clubs:
| reply to rachelsfx
Re: One Question:
This is the common myth - they're not forced to share access to lines at rates which are not profitable! In fact, while in the past ILECs have been required to provide access, THEY set the price!
It's about unbundling, basicly. If a ILEC affiliated ISP can sell consumers DSL with Internet transit, support, email boxes, a personal website, etc at $X at a profit, and if you take out everything except the use of the line, you should be able to sell at $X-$Y, also at a profit!
Let's take the railroad analogy. If there is one railroad that passes through a city, and it's owned by Southern Pacific, you can ship your goods to that city in a Southern Pacific rail car for $1000. They run the locomotive, they've got an engineer driving it, they purchased the freight car the cargo is in, etc.
Or - they can sublease the use of the track to another company, who would haul your freight using their locomotive, their engineer, etc. The cost to that other company might be to use the tracks might be less than the $1000 they'd get by delivering the cargo themselves, but they don't have many of the associated costs.
Both could be profitable for the owner of the essential facility - the rail tracks, or the phone lines.
Rail was regulated like this, a long time ago - everyone recognized that it just wouldn't be practical to have ten or twenty parallel sets of tracks running into every town, mostly idle. Instead, the company that invested in building them gets a bunch of the cash but doesn't have to run the whole end-to-end system. Airports are similar - they're an essential facility, and we don't allow one airline to own them and bar all other carriers. Ports too - they're essential facilities that by their nature must be shared.
Phone lines are the same.
-Dane | |
frankenfeet
Premium
join:2001-10-14
Smiths Grove, KY
 ·Insight VOIP
 ·Insight Communicat..
| said by DaneJasper  :This is the common myth - they're not forced to share access to lines at rates which are not profitable! In fact, while in the past ILECs have been required to provide access, THEY set the price! If ILECs set the price, what prevents them from pricing their competition out of the market? That is, they are forced to share the line with the competition, but decide to charge cost +50, or even 75% (forcing their competition to do the same with their customers). Their competition obviously can't compete with that business model. So at what point does the government step in, or do they even have the authority?
--
ƒ ℜ λ η κ ε ℵ ƒ € ∃ † | |
DaneJasper
Sonic.Net
Premium,VIP
join:2001-08-20
Santa Rosa, CA
clubs:
| The only thing stopping them from charging an anticompetetive rate is concern for a market monopolization charge.
In fact, they used to charge more wholesale than retail, and did for a few years. Then, three California ISPs filed an antitrust case, which is still pending, and prices fell to some margin below retail.
-Dane | |
rachelsfx
join:2004-09-27
Pensacola, FL
| You never answered the basic question: Why should they allow you to lease their lines?
Even the Telecom Act of 1996 wanted "competition" based on line sharing of phones proviso the CLECs built their own "last mile" eventually.
The Act failed except to give the Bells LD, which is destroying the LD companies piecemail (MCI is now VZ, T is now SBC owned, Sprint is hobbling on one foot). AT&T was basically dropping out of the consumer LD market.
Covad filed bankruptcy trying to compete and its rates are a joke. Honestly, I only care about VZ's stock.
My point: if the Bells have to share, why not cable? Cable is just as monopolistic as the Bells. The Bells might still be a "monopoly" but cell phones (and now Cable VOIP) are killing them. I do think the Bells should get franchises just like Cable was required to do for TV.
You point on "unbundling": Why shouldn't their stockholders get as much profit as possible, even out of you?
Also, if you put the DSLAM in the CO, no line share is even on the table, right?
Other than FIOS, may the Bells rest in Hell.
Personally, I hope your company gets to take ALL their DSL customers (T) furthering my hope T goes down in flames. Cable is at least honest that they are overpriced. Can't say that for the Bells or the Satellite bunch. I hate T more than any other company on this earth. I even have more respect for a drug dealer than T. | |
Cem C
@com.tr
| 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. | |
|
