openbox9
join:2004-01-26
Alexandria, VA | reply to CylonRed
Re: First place
I knew the answer...it was a rhetorical question. I wish them luck as well, but until the CLEC's build out their own infrastructure, or there's a drastic redirection in policy, I don't see much room for the future of many CLECs. |
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CylonRed
Premium,MVM
join:2000-07-06
Bloom County | I think there will have to be a redirection in policy as I don't see how any CLEC can afford to build out (and in essence be a ILEC at that point) and make money. |
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openbox9
join:2004-01-26
Alexandria, VA
 ·AT&T Southeast
| I'll take the other viewpoint and say that I think a service provider should have their own infrastructure to facilitate providing that service. Why should we put the cost burden on a larger company because a smaller company can't afford to enter a market and compete? |
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John Galt
Forward, March
Premium
join:2004-09-30
Happy Camp
·CenturyLink
| said by openbox9  :Why should we put the cost burden on a larger company because a smaller company can't afford to enter a market and compete? Because public policy at the time allowed the ILECs to build out. The ILECs could only afford to build out if they were protected monopolies with guaranteed profit margins.
Now, you're saying that the new CLECs must compete against these ILECs by paying "full-freight" out of their own pocket?...
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A is A |
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CylonRed
Premium,MVM
join:2000-07-06
Bloom County
| reply to openbox9
I don't believe that I stated a view other than what it will take for them to make money - nothing more. I never stated I was for or against policy change.
I will say that if a build out by everyone is demanded then you will truely have near zero competition - far worse than it is now. Not to mention that the build out the original companies built (copper) - was paid for, and still being paid for, by our taxes - not their profit.
There is no easy answer to the problem... |
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openbox9
join:2004-01-26
Alexandria, VA
·AT&T Southeast
| I didn't mean to imply that you had a viewpoint one way or another. said by CylonRed :Not to mention that the build out the original companies built (copper) - was paid for, and still being paid for, by our taxes - not their profit. Yes, the original copper infrastructure was built via the assistance of government sanctioned/regulated monopolies and nice tax benefits. Are you implying that new infrastructure build outs and existing O&M costs are not being paid for by ILEC profits? Hopefully not. |
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openbox9
join:2004-01-26
Alexandria, VA
·AT&T Southeast
| reply to John Galt
So what's your option? Maybe the CLECs should band together to build their own infrastructure. Or maybe they should purchase the old copper infrastructure as telcos migrate to fiber. Or maybe they should lobby for policy changes that might better facilitate their financial interests. |
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KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
·AT&T Yahoo
·AT&T DSL Service
 ·Cox HSI
·AT&T Southwest
| reply to openbox9
"You have to learn to crawl before you can walk."
This is basically an ISP that sees the writing on the wall. The only way they can currently offer broadband is by partnering with AT&T as one of their partner ISP's offering DSL over AT&T's lines. However AT&T is killing these ISP's by upping their wholesale DSL line rates while pushing their own (AT&T/Yahoo) DSL cheap to the consumer, in effect, removing the independent ISP's from existence.... So, with Sonic.net, the plan is obviously to becoming a CLEC and slowly as finances allow build out their own network... assuming AT&T isn't allowed to murder them now in the womb, they will be able to eventually, hopefully, provide their own services over their own network entirely.
Go Sonic.net...
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"Regulatory capitalism is when companies invest in lawyers, lobbyists, and politicians, instead of plant, people, and customer service." - former FCC Chairman William Kennard (A real FCC Chairman, unlike the current Corporate Spokesperson in the job!) |
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CylonRed
Premium,MVM
join:2000-07-06
Bloom County
| reply to openbox9
Up till last year they were still collecting the tax for those build outs and I have no reason to believe that money was not used for build outs and maintenance (plus padded profits).
Problem is - there is no way for 5-6 ILEC's to build all their own infrastructure - too costly and you would have issues with rights on poles and re-digging up folks lawn for hopefully some undefined number of customers. That is the reason I don;t think there will be any more than 2 companies doing fiber to the home. The pockets of most companies are not deep enough - even Verizon was having issues with shareholders not seeing the value soon enough. It is going to take a lot of time for the cost of the service to go down to what people expect.
People/customers are promised cheap tv, phone and internet but as many have found out - they will raise the rates as soon as they can to help pay for the new builds and make some profits. They get people in with cheap prices initially then raise the rates.
If every company be it ILEC/CLEC/cable has to do their own infrastructure than across the US expect to see 2 cable companies at most and 2 ILEC's remain in business (Verizon/AT&T) and that's it. Because of the barriers to entry are so high - building all new infrastructure for everyone will cause higher prices and less competition. |
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openbox9
join:2004-01-26
Alexandria, VA
·AT&T Southeast
| reply to KrK
But is Sonic discussing building their own cable plant or are they still going to leverage AT&T's? Additionally, I don't see the increase in wholesale rates as killing off the CLECs. If cost increases can't be absorbed, then there's a fundamental error in the business plan IMO. Now, if you want to enter into an anticompetitive discussion, that's a different story. I'm sure the FTC and various AG's will be quick to respond if AT&T begins using it's market force to anti-competitively undercut the market. |
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openbox9
join:2004-01-26
Alexandria, VA
·AT&T Southeast
| reply to CylonRed
Are you talking about the USF slush fund?
I'm with you on the ROI for rolling out new infrastructure. That's why I question why some people expect companies that make that investment to open their lines to competitors when the cost to deploy and support the infrastructure is so large in the first place.
You said it earlier, but there is no easy answer for this. Nobody (including me as a taxpayer) wants to pay for infrastructure that will be shared amongst multiple competitors. Other options have less popularity, so the question becomes, do we need additional providers in the market, or are we currently heading in the right direction? |
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John Galt
Forward, March
Premium
join:2004-09-30
Happy Camp
·CenturyLink
| said by openbox9 :Nobody (including me as a taxpayer) wants to pay for infrastructure that will be shared amongst multiple competitors. This is a ridiculous assertion. That is like saying that you want every trucking company to build their own roads for exclusively transporting their goods.
Perhaps you meant to say this:
Nobody (including me as a taxpayer) wants to pay for infrastructure that will NOT be shared amongst multiple competitors.
As other posters have pointed out, there is only so much ROW for these things...
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A is A |
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openbox9
join:2004-01-26
Alexandria, VA | Ok, let me rephrase. I'm all for a common infrastructure for any and all providers to provide service, as long as it can be paid for without additional tax dollars. Is that better? |
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John Galt
Forward, March
Premium
join:2004-09-30
Happy Camp
·CenturyLink
| said by openbox9 :Ok, let me rephrase. I'm all for a common infrastructure for any and all providers to provide service, as long as it can be paid for without additional tax dollars. Is that better? What an "Election Day" answer...!
Are you runing for political offce perchance?? 
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A is A |
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openbox9
join:2004-01-26
Alexandria, VA | You didn't like my first answer, so I attempted to give you a more "politically correct" one |
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KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
·AT&T Yahoo
·AT&T DSL Service
·Cox HSI
·AT&T Southwest
| reply to openbox9
said by openbox9 :But is Sonic discussing building their own cable plant or are they still going to leverage AT&T's? They are building out their own network and facilities.Additionally, I don't see the increase in wholesale rates as killing off the CLECs. If cost increases can't be absorbed, then there's a fundamental error in the business plan IMO. OK. Example:
AT&T Wholesale DSL line to "partner" ISP = $45 a month. ISP has to cover their own services, so let's say they offer DSL broadband to end consumer for $55 a month.
AT&T then comes along and offers the same consumer DSL Broadband (their own brand) for $29.99 a month--- $16 less then the ISP's COST for the line alone! Yes, I'd call that "A problem with the business plan" as in at&t is trying to wipe them out, period! Basically at&t gouges their "partners" for the DSL line and effectively makes it completely impossible for them to compete.... at least on price.... and let's not even mention the "other" ways to hose over "partners" and CLEC's...
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"Regulatory capitalism is when companies invest in lawyers, lobbyists, and politicians, instead of plant, people, and customer service." - former FCC Chairman William Kennard (A real FCC Chairman, unlike the current Corporate Spokesperson in the job!) |
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openbox9
join:2004-01-26
Alexandria, VA
·AT&T Southeast
| said by KrK :They are building out their own network and facilities. Really? Sonic is building their own CO (not leasing space in an existing CO) and pulling fiber/copper (not leasing existing copper pairs) to the market?said by KrK :Basically at&t gouges their "partners" for the DSL line and effectively makes it completely impossible for them to compete.... Did you miss the part of my post that discussed anti-competitive behavior? FYI, Sonic's "intro" rate is less than AT&T's offering. Somehow they're able to afford to compete on price. |
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CylonRed
Premium,MVM
join:2000-07-06
Bloom County
1 edit | quote:
Did you miss the part of my post that discussed anti-competitive behavior? FYI, Sonic's "intro" rate is less than AT&T's offering. Somehow they're able to afford to compete on price.
Because they are offering the service at that price does not mean they will make money off of it. It is SOP to offer price BELOW cost to get customers then raise the prices - especially for internet service. Heck - Covad had YET to make money and they charge more than Sonic - I think there is about a 0% chance that Sonic is making money on the service initially.
Again - just because they are offering the price does not mean they can compete on price. They just want/need as many customers as possible as fast as possible.
I would love to see you do the math to figure out how a CLEC can offer service profitably over a ILEC even if they are leasing pairs or pulling their own. |
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openbox9
join:2004-01-26
Alexandria, VA
·AT&T Southeast
| said by CylonRed :Again - just because they are offering the price does not mean they can compete on price. They just want/need as many customers as possible as fast as possible. Kind of like what some claim AT&T might be doing? The difference is, that T can afford to absorb the loss longer than a smaller start-up. Beyond that, what's the difference in selling below cost?said by CylonRed :I would love to see you do the math to figure out how a CLEC can offer service profitably over a ILEC even if they are leasing pairs or pulling their own. I don't think a CLEC can be as profitable as an ILEC, but then gain, should they be able to? I'd suggest no. |
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CylonRed
Premium,MVM
join:2000-07-06
Bloom County
1 edit | You suggested that Sonic can compete on price since their pricing right now is below AT&T - I am simply saying they can't and won't be able to in the long run or possibly even the short run. |
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