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FCC Rejects Qwest Forbearance Request
Who are you and what have you done with the FCC?
by Karl Bode 09:34AM Monday Jul 28 2008
Most line sharing regulation was gutted by the FCC's deregulation of the DSL industry back in 2005, but some agreements remain grandfathered. Qwest has been arguing the last few years that the markets they serve are just so competitive, they should no longer be mandated to share network access with competitors at protected, affordable rates. In a rare act of non-solidarity with a baby bell, the FCC has rejected Qwest's request (pdf) for forbearance from such rules, with FCC chief Kevin Martin issuing the following statement:
quote:
Although significant competition exists in Qwest’s markets, particularly in Phoenix, the Commission determined based on the specific market facts provided to us that Qwest’s petitions did not provide sufficient evidence to conclude that regulatory relief like that afforded the company in Omaha was warranted. As competition in these markets continues to develop, I am happy to reevaluate these markets based on updated market facts.
When even Kevin Martin (who traditionally employs rose colored broadband glasses) hints that a baby bell isn't seeing competition, you know those markets aren't competitive. Competitors, who are obviously cheering the FCC on this one, argued that granting the request would result in customers seeing $1.14 billion in higher charges, annually. Despite claims of competition, Qwest recently raised the price of 44 different services from between seven and twenty-eight percent -- and apparently should have spent more of that profit on lobbying.

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pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD

1 recommendation

Take The Hint

Hopefully Qwest's competitors who rent access from Qwest will take the hint and do more to build out their own networks before the FCC changes its mind.
--
This isn't fair! I was only supposed to hate just ONE presidential candidate!

battleop

join:2005-09-28
00000

Re: Take The Hint

It's economically impossible. Besides Quest would find some way to fight that as well. Maybe by making it impossible to use their telephone poles. Think about how much hell will people raise when there are more telephone poles, more wires on the poles, and more boxes on the side of the road.

pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD

Re: Take The Hint

said by battleop:

It's economically impossible. Besides Quest would find some way to fight that as well. Maybe by making it impossible to use their telephone poles. Think about how much hell will people raise when there are more telephone poles, more wires on the poles, and more boxes on the side of the road.
Such is life in business. If CLECs want to be successful, they will find a way to work around this problem. If they don't then they will share the fate of other CLECs who no longer have access to lines provided by the incumbent carrier.
--
This isn't fair! I was only supposed to hate just ONE presidential candidate!

SRFireside

join:2001-01-19
Houston, TX

Re: Take The Hint

The thing is the incumbent carriers had a complete government endorsed monopoly to build out their infrastructure. I'm sorry, but there is no way you can argue the CLECs don't deserve the line sharing unless the government gives them the same considerations when building out their networks.

Besides the Bells AGREED to sharing the lines back in 1996 in the first place; thinking they will make a killing off of the long distance business. Instead they drop the ball on the whole Internet potential and now they want to take back what they agreed on. You think it sounds unfair that the incumbent carriers have to foot the bill on an agreement in spite of them not getting the profit they expected? Such is life in business.
hottboiinnc4
ME

join:2003-10-15
Cleveland, OH

Re: Take The Hint

CLECs were given access also in return for them to also have time to build out their own networks. Where are the networks at? COVAD has one and New Edge Networks. Where are the rest of the large ones? but NEN stopped building out and decided instead they could become an ISP with their TransEdge name and force their partners off the network after they agreed they would not compete against them.

If companies want to play they need to start building what they want other wise be forced off the playing field. That's why VZ and ATT lobbied for their next generation of HSI. They don't have to share it. Why they're footing the bill. Others need to start building as well.

SHABAZZ

join:2008-07-13
Seattle, WA

1 recommendation

Re: Take The Hint

So what will happen if 9 or 10 more providers decided to build out their own networks in a city? There wouldn't be enough space available to run lines. Local governments and jurisdictions dictate what can and can't happen. So if a city wants multiple service providers they have two options, have a line sharing agreement or have your city look like spaghetti.
hottboiinnc4
ME

join:2003-10-15
Cleveland, OH

Re: Take The Hint

many areas cities are requiring companies to place lines under ground where they should be. Cable, and phone could share the same PVC. Power can be where it is in the ground by itself.

But many states approve who gets to enter a city and who doesnt. Like Ohio pay $2,000 filing fee and most likely get approved to put serices in a city. You don't need the cities approval anymore. Just the States.

But ISPs/CLECs knew about the build-out deadline they agreed to it when they started out. No need to change the laws now.

pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD
said by SRFireside:

The thing is the incumbent carriers had a complete government endorsed monopoly to build out their infrastructure. I'm sorry, but there is no way you can argue the CLECs don't deserve the line sharing unless the government gives them the same considerations when building out their networks.
Why not? As another poster mentioned, there was a time when CLECs were flush with investment money and blessed with high stock price. Another poster also mentioned that in Japan and France, CLECs actually did go and build their own networks and are doing very well for it. The failure of CLECs is not the fault of Ma Bell, but it is rather a function of bad management.
said by SRFireside:

Besides the Bells AGREED to sharing the lines back in 1996 in the first place; thinking they will make a killing off of the long distance business.
Instead they drop the ball on the whole Internet potential and now they want to take back what they agreed on.
Businesses routinely change their plans when economic conditions change. Any business that doesn't recognize that a new plan of action might be needed depending on the situation is going to be out of business.
said by SRFireside:

You think it sounds unfair that the incumbent carriers have to foot the bill on an agreement in spite of them not getting the profit they expected?
Why should it be fair?
--
This isn't fair! I was only supposed to hate just ONE presidential candidate!

jhboricua
ExMod 2000-01
join:2000-06-06
Minneapolis, MN

Re: Take The Hint

said by pnh102:

Another poster also mentioned that in Japan and France, CLECs actually did go and build their own networks and are doing very well for it. The failure of CLECs is not the fault of Ma Bell, but it is rather a function of bad management.
Actually, in Japan the government forced NTT the incumbent to unbundled and set the rates they would charge the CLECs. That is what propelled Japan's broadband competition and adoption.
--
"Two things are infinite: the universe and human stupidity; and I'm not sure about the the universe." - Albert Einstein
Jose A. Hernandez * System Admin * MPLS, Minnesota, USA *

SRFireside

join:2001-01-19
Houston, TX
said by pnh102:

As another poster mentioned, there was a time when CLECs were flush with investment money and blessed with high stock price... The failure of CLECs is not the fault of Ma Bell, but it is rather a function of bad management.
You will have to provide the figures on that because I don't remember seeing the kind of venture capitol that would pay for the bandwidth, support, line fees AND building out an infrastructure and all that it costs (including lobbying for rights of way with the various communities). You talk as if a mere ten million dollars or so will fit the bill. I worked for an ISP that had to deal with the way the Bells dealt with their line sharing. Believe me... DSL was hardly a moneymaker.

said by pnh102:

Businesses routinely change their plans when economic conditions change. Any business that doesn't recognize that a new plan of action might be needed depending on the situation is going to be out of business.
The problem is this wasn't a business agreement. This was an agreement made with the U.S. government in regards to passing a LAW. Sure they can try changing the law, but they can't expect to have it overturned just because they don't like the results.

said by pnh102:

Why should it be fair?
Exactly my point. Why should the incumbents get a free pass when they cry unfair when their plan backfires on them after convincing Congress to pass a law that they themselves agreed to abide by once enacted?

KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
said by pnh102:

Such is life in business. If CLECs want to be successful, they will find a way to work around this problem.
I guess it's all a matter of perspective. Either you allow CLEC's access at affordable rates, and thus use the argument there's some competition;

OR you just scrap it and give up on competition, admit the ILEC is a monopoly, and go back to regulations and price controls.

What the ILEC's want is 1) No competition, but no regulation either. They shouldn't be allowed to have it both ways; Fighting competition from having access on one side, and then on the other side saying "See all this competition, we don't need regulation."

They can choose one or the other, but no way should they be allowed both.
--
"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!)
nasadude

join:2001-10-05
Rockville, MD
Reviews:
·Verizon FiOS

1 recommendation

question: how long does a clec need to become profitable enough to do it's own plant build out? a clec isn't necessarily going to get the same consideration and forbearance that the incumbent got for doing their build out.

I know clecs in Japan and France have been successful enough to build their own plant, but I believe they had several years to get big enough/profitable enough to get to this point.

No matter how clear the handwriting on the wall (ie, FCC granting forbearance in the near future), if a CLEC hasn't been profitable enough or gotten big enough they aren't going to be able to afford a build out.

pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD

Re: Take The Hint

said by nasadude:

question: how long does a clec need to become profitable enough to do it's own plant build out? a clec isn't necessarily going to get the same consideration and forbearance that the incumbent got for doing their build out.
I would think that building one's own physical plant isn't something you should do after you are profitable. I see it more as an expense you incur in order to sustain profitability.
--
This isn't fair! I was only supposed to hate just ONE presidential candidate!

SHABAZZ

join:2008-07-13
Seattle, WA

Re: Take The Hint

First, a company needs funds to build. So to achieve this you will have to be profitable or born wealthy.

Second, if you think you will be able to get venture capital investment when your competition is “Bell” you must have never been in business.

wifi4milez
Big Russ, 1918 to 2008. Rest in Peace

join:2004-08-07
New York, NY
said by nasadude:

I know clecs in Japan and France have been successful enough to build their own plant, but I believe they had several years to get big enough/profitable enough to get to this point.
Unless my math is wrong, the 1996 Telecom Act was 12 years ago.......

Plenty of time in my opinion to come up with a solid business plan that doesnt involve the incumbent. In all honesty, back in the late 90's when every CLEC had a stock price over $100 would probably have been a good time to invest in physical plant.
--
If history teaches us anything, it teaches that simple-minded appeasement or wishful thinking about our adversaries is folly.
-Ronald Reagan-

Dogfather
Premium
join:2007-12-26
Laguna Hills, CA
When a competitor does that, very often the incumbent sues, lies or blackmails to stop it.

KoolMoe
Aw Man
Premium
join:2001-02-14
Annapolis, MD

Re: Take The Hint

Exactly. See the Utopia hassles as a prime example.
»www.lightreading.com/document.as ··· =news1_1
KM

The Beer
I Love It When A Plan Comes Together
Premium
join:2001-07-24
Atlantic, IA

And nobody cared....

It's sad because it is a big deal, and a good thing for competition.

They did get forbearance in Omaha, and McLeodUSA left.

Well they kinda left, they got rid of their sales staff, make countless press releases about leaving but never really leave.

They tell their customers they will give them notice if they do leave, but they are not leaving unless they leave, but they are not.

So some day, after Mcleod makes up their mind and fires me as a customer I will need to switch to Cox Or Qwest with the 15,000 other customers who will be running.

McleodUSA and PAETEC Suck.
hottboiinnc4
ME

join:2003-10-15
Cleveland, OH

Re: And nobody cared....

does not make sense.
romulusnr

join:2007-08-01
Federal Way, WA

1 recommendation

smack. smack.

I can't imagine why Qwest would have any trouble with the federal government.

morbo
Complete Your Transaction

join:2002-01-22
00000

Re: smack. smack.

bingo
EPS4

join:2008-02-13
Hingham, MA

Well, yeah

Hm, Q is in the worst financial condition of the three Baby Bells (is that really an accurate term anymore? I mean, one of the Baby Bells even ate up Ma Bell- though I guess it works for Qwest), which clearly implies that they have the least money to spend on lobbyists and "contributions"... and now they're having difficulty pushing their agenda through the FCC?

person300

@comcast.net

LMFAO..... Who will believe this BS?

If the competition is so great, then prices in the market would be going DOWN and NOT UP. You don't need to be master of economics to understand that.