dru
join:2000-09-14
Corona, CA
| reply to spectro
Of dumping and windmills
said by spectro:
Everybody knows why this is happening: Telcos are using dumping (selling below cost) to get CLEC's out of the market.
I don't understand what are Covad/Northpoint/etc waiting to go complaint at the FTC for Telcos' dumping.
Ever see those fields of power-generating windmills in the windy California passes and mountaintops? Most of them still turning are long disconnected and simply run unmaintained 'till the bearings seize, because nearly all of the speculators or holding companies formed for their operation during the "energy crisis" of the 70's and 80's are bankrupt and out of business. Cheap, below-cost electric rates from conventional sources killed them by making their operation unprofitable, and other alternate sources, such as solar also got killed. Now rates are mushrooming and there's not enough power to meet demand. The big power companies are grinning because competition from alternative sources has disappeared, and who takes it in the shorts - the consumers.
They have avoided doing so because of the negative publicity. John Q. Public wants and supports $29.95 and $39.95 DSL. Go after the telcos for dumping, and the public will scream about pending higher prices, and in turn, tarnish their corporate image and product. The CLECs will be the ones seen as greedy, the ILEC's PR firms will paint the picture that they are the victims, all they want to do is provide the cheapest DSL possible to customers. Of course, what they really want to do is lock consumers into using them for voice services, the ILEC's worst nightmare is that cable companies, along with cheap internet, will capture your voice business. Cheap digital services scare them, even though it remains to be seen if the current cable models are profitable either (they are simply better financed than the DSL CLECs in my humble opinion) So the pricing is usually targeted to undercut or compete with Cable based internet, they use their money and muscle to support their own ISP who loses money selling DSL bandwidth for less than a buck, and, hey, if a few independent ISPs and CLECs go bankrupt along the way, fine by them!
The issue goes far beyond just dumping - the telcos and their incestuous wholly owned / corporate backed subsidiary ISPs have violated numerous anti-competitive laws. They even flaunt their violations, for example, the promotion where you get $5 off a tariffed/regulated voice line only if you get DSL through their ISP is stunningly illegal. Just about every ISP has documented cases where Verizon or Pac Bell's own ISP had access to customer records including all independent DSL sales.
The real solution is simple - don't regulate DSL pricing, but enjoin every ILEC from having any more than a small (like 10%) ownership of an ISP. Everyone would have to use an independent like AOL or Earthlink who would in turn buy wholesale circuits from the ILECs. This way, the conflicts of interest would be solved.
Of course, this will never happen, and before you know it the country will face the same thing we have with power companies. While it has been "deregulated" powerful interests have killed any competition and you have once source (ILEC) which will one day run to the PUC or FCC and crank up their rates 2-3 times in one month because of "high supplier costs" and there will be no competition to turn to. |
