Telcos: FCC Action Means Job Losses, Stifled Investment Please ignore the fact we're already firing thousands and slowing investment... As the battle heats up over the FCC's push to partially reclassify broadband ISPs under Title II of the Communications Act, carriers (and their army of lobbying groups have been trotting out some familiar arguments. Namely, that if the FCC takes any action (no matter how wimpy), the result will be stifled investment and lost jobs. Art Brodsky at Public Knowledge takes a look at claims that Title II reclassification will result in lost jobs and stifled investment, and notes that both AT&T and Verizon are doing a good job on that front all by themselves -- with no real change in the regulatory environment: Let’s talk jobs. Between March 31, 2009 and June 30 this year, Verizon cut 26,455 jobs. During the same period of time, AT&T cut 22,350 jobs. That’s 48,805 jobs cut by two companies during a period in which the regulatory regime did not change.
Let’s talk investment. In 2008, AT&T spent $19.6 billion for capital expenditures in networks and other spending (capex in the parlance). In 2009, it was $16.6 billion – a 15.7% decline during a period in which the regulatory regime did not change. Verizon spent $17.2 billion for capex in 2008. In 2009, it was $17 billion – an 11.6% [sic, should be 1.6%] decline during a period in which the regulatory regime did not change. Of course the "stifled investment" meme is the oldest telecom lobbyist talking point in the playbook, and no matter how many times it's debunked (even by the companies own CFOs) it never goes away. Back in reality, network investment is far-more-frequently dictated by competition, which neither Verizon or AT&T see in many of their markets. Meanwhile in Verizon's case, their job reductions have far more to do with the death of the landline and Verizon's conscious decision to hang up on rural Americans -- than anything the FCC may or may not do.
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  pnh102Reptiles Are Cuddly And PrettyPremium
join:2002-05-02
Mount Airy, MD | Wrong quote:
Back in reality, network investment is far-more-frequently dictated by competition, which neither Verizon or AT&T see in many of their markets.
If this is true then what pushed Verizon to deploy FIOS or AT&T to deploy Uverse? It was competition from cable companies.
The FCC still hasn't made the case for any policy changes. The last time someone whined that Comcast wasn't being "fair" in its network traffic management, we got a 250GB monthly data cap. Do we really want to go down this path for other ISPs?
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"Net Neutrality" zealots - the people you can thank for your capped Internet service. | |
|  |  BF69Premium
join:2004-07-28
Camden, TN | Re: Wrong said by pnh102: quote:
Back in reality, network investment is far-more-frequently dictated by competition, which neither Verizon or AT&T see in many of their markets.
If this is true then what pushed Verizon to deploy FIOS or AT&T to deploy Uverse? It was competition from cable companies. Yes and he states that those companies only invest in areas with competition. So what exactly are you disagreeing with?
The FCC still hasn't made the case for any policy changes. The last time someone whined that Comcast wasn't being "fair" in its network traffic management, we got a 250GB monthly data cap. Do we really want to go down this path for other ISPs? Comcast got into trouble because they had invisible caps and were throttling without notifying customers they were doing so. | |
| | | pnh102Reptiles Are Cuddly And PrettyPremium
join:2002-05-02
Mount Airy, MD | Re: Wrong said by BF69:Yes and he states that those companies only invest in areas with competition. So what exactly are you disagreeing with? But the premise of the piece stated that there was no competition. That is what I am refuting.
said by BF69:Comcast got into trouble because they had invisible caps and were throttling without notifying customers they were doing so. Under the old Comcast policy, only the high use customers were being throttled or cut off. Again, so what? The complaining then resulted in Comcast throttling ALL traffic, even for people who were not using the most. The further complaining about that policy resulted in the cap being imposed. Now everyone suffers because of the actions of a few, and for the sake of "Net Neutrality."
This is not the future of broadband that any of us are going to like very much.
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"Net Neutrality" zealots - the people you can thank for your capped Internet service. | |
| | | | | | Re: Wrong said by pnh102:said by BF69:Yes and he states that those companies only invest in areas with competition. So what exactly are you disagreeing with? But the premise of the piece stated that there was no competition. That is what I am refuting. said by BF69:Comcast got into trouble because they had invisible caps and were throttling without notifying customers they were doing so. Under the old Comcast policy, only the high use customers were being throttled or cut off. Again, so what? The complaining then resulted in Comcast throttling ALL traffic, even for people who were not using the most. The further complaining about that policy resulted in the cap being imposed. Now everyone suffers because of the actions of a few, and for the sake of "Net Neutrality." This is not the future of broadband that any of us are going to like very much. NOBODY FUCKING SUFFERS, GIVE ME A BREAK.
It is just Comcast telling the truth. What a big deal ! If you are not a "hog", you are not affected, as you were not before either.
Are you impacted by the "new" Comcast policy ? | |
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1 edit | If this is true then what pushed Verizon to deploy FIOS or AT&T to deploy Uverse? It was competition from cable companies. Huh? What I said:network investment is far-more-frequently dictated by competition, which neither Verizon or AT&T see in many of their markets. Markets where they do see competition frequently get upgraded. Just like markets where Time Warner Cable sees competition are the first to get DOCSIS 3.0 upgrades. That competition (or lack thereof) is the primary driver of upgrades is not even disputable. | |
| | | pnh102Reptiles Are Cuddly And PrettyPremium
join:2002-05-02
Mount Airy, MD | Re: Wrong said by Karl Bode:Markets where they do see competition frequently get upgraded. Just like markets where Time Warner Cable sees competition are the first to get DOCSIS 3.0 upgrades. That competition (or lack thereof) is the primary driver of upgrades is not even disputable. That's pretty much what I was saying! The fact that Verizon and AT&T are rolling out improvements in areas shows that there is some form of competition in those areas.
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"Net Neutrality" zealots - the people you can thank for your capped Internet service. | |
| | | |  56403739Less than 5 months leftPremium
join:2006-03-08
Naples, FL
kudos:2
1 edit | Re: Wrong Is there anywhere that AT&T or Verizon has HSI that there is not a cable company which also offers it? Where are these "many" single-provider markets Karl speaks of? | |
| | | | |  ILpt4UPremium
join:2006-11-12
Lisle, IL
kudos:4
 ·AT&T U-Verse
 ·AT&T Yahoo
| Re: Wrong said by 56403739:Is there anywhere that AT&T or Verizon has HSI that there is not a cable company which also offers it? Where are these "many" single-provider markets Karl speaks of? Yes. I have done U-Verse installs in areas that have no cable provider, and previously had no DSL either.
Before the VRAD was placed, it was dial-up or 3G wireless internet, and satellite and/or OTA antenna for TV | |
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| | | said by pnh102: quote:
Back in reality, network investment is far-more-frequently dictated by competition, which neither Verizon or AT&T see in many of their markets.
If this is true then what pushed Verizon to deploy FIOS or AT&T to deploy Uverse? It was competition from cable companies. /slap | |
| | | |
Reviews:
·Verizon FiOS
| pure BS the incumbents spout this FUD EVERY SINGLE TIME there is ANY discussion of changing the status quo.
and as amply documented by Art Brodsky, it's nothing but a load of self-serving BS.
look for this ilec BS to be repeated by the usual purchased congress critters and uncritically picked up and repeated by a gullible, lazy press. | |
|  Romney2012Defeat Obama 2012-Chg we can believe inPremium
join:2002-03-03
USA
kudos:4 |  Job losses were really job transfers in many cases
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Are you happy with your rep in Washington, DC? | |
| | | | Re: Job losses were really job transfers in many cases I don't even think Brodsky's numbers include the 11,000 transferred to Frontier. Most of them were reductions due to landline erosion and Verizon's shift away from rural DSL. | |
| | | Romney2012Defeat Obama 2012-Chg we can believe inPremium
join:2002-03-03
USA
kudos:4
1 edit | Re: Job losses were really job transfers in many cases said by Karl Bode:I don't even think Brodsky's numbers include the 11,000 transferred to Frontier. Most of them were reductions due to landline erosion and Verizon's shift away from rural DSL. The Verizon spreadsheet line item just lists total # employees by qtr. It doesn't break that down any way, so I assume it includes losses related to sale of properties. No footnote is included that breaks the numbers down as to reason. Brodsky's 26,455 number comes from that line item.
Link from Brodsky news article:
»investor.verizon.com/financial/q···35296952
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Are you happy with your rep in Washington, DC? | |
|
bdon78I didn't do it
join:2009-05-18
Decatur, GA | Ha 1. I think we can all agree that it doesn't make any sense just to reclassify the ISPs under the Title II of the Communications Act. Something more comprehensive is needed... the FCC is either lazy or scared.
2. It will mean job losses, plain and simple. This isn't specific to Telcos either. If any large (fortune 100) company takes a hit of hundreds of millions of dollars, the first place they cut costs is through employee reduction. I'm not saying it's right... I'm saying it how it is. (let's be realistic, not idealistic). | |
| | | | Yes lets be realistic. Smart companies invest in people in most markets. When this is the first place you can think of to cut your taking the easy way out and most likely damaging your companies long term viability going forward. look back through history and see all the companies who cut people and look what happened. | |
| | | | Re: Ha What you are saying (and what they are threatening) actually contradicts recent history by these very companies.
You can look back from 1994 until 2004 and see that the complete opposite was true when they had the last round of "regulations" come in the form of the Telco Act of 1996.
Again, this is nothing more than a scare tactic used by them to try to prevent or greatly limit any regulations put on them. It is the same song and dance every time. | |
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Romney2012Defeat Obama 2012-Chg we can believe inPremium
join:2002-03-03
USA
kudos:4 | Re-regulation would result in even MORE cutswill result in lost jobs and stifled investment, and notes that both AT&T and Verizon are doing a good job on that front all by themselves -- with no real change in the regulatory environment Sure there were some cuts from 2008 to 2009. There was a recession most everyone heard about. But a re-regulation would result in even stiffer cuts. And that is less a threat than a reality. If re-regulation ever results in line-sharing FCC orders, investment will take a drastic drop.
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Are you happy with your rep in Washington, DC? | |
| | | | Re: Re-regulation would result in even MORE cuts See my post right above yours as you are spewing the same BS that they do because that is what you do when it comes to things like this. | |
| | | | said by Romney2012:will result in lost jobs and stifled investment, and notes that both AT&T and Verizon are doing a good job on that front all by themselves -- with no real change in the regulatory environment Sure there were some cuts from 2008 to 2009. There was a recession most everyone heard about. But a re-regulation would result in even stiffer cuts. And that is less a threat than a reality. If re-regulation ever results in line-sharing FCC orders, investment will take a drastic drop. Not really. The Berkman Institute's comprehensive study of European broadband found that line-sharing and enforced competition regulations spurred investment. Investment in the US was highest after the passage of the '96 Telecom Act, which enabled Title II-type regulations. In France free.fr got its start using competitors' lines, and was so innovative and profitable that it built out its own lines. That's why the French have $40/month triple plays.
Of course you know this, but don't really care, do you? | |
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| | Jobs were not cut they were outsourced Verizon cut 26,455 jobs. During the same period of time, AT&T cut 22,350 jobs---correction they were send to India or China. Bill Clinton's dream come true! | |
| BiggA
join:2005-11-23
EARTH Reviews:
 ·Comcast
| New Goal I have no clue what we'd do with the bandwidth, but we need a new goal: symmetrical gig fiber to every house in the U.S.
Seriously though, these companies are full of it. The reasons they stop investing is because they are cheap, or because consumers are dumb (as in Fios's low uptake numbers, if customers were with the program, it would be 100%). | |
| |  tshirtPremium,MVM
join:2004-07-11
Snohomish, WA
kudos:3
·Comcast
| Re: New Goal And a new luxury car in every driveway, and a chicken in every pot?
Are the being cheap? or fiscally responsible
Are they dumb? or just don't see the need for a gig symetrical connection just to check email, surf the web.
You can allow the market to grow naturally, i.e. companies WILL invest where they see the chance to profit.
or you can artifically stimulate it ahead of demand, if "someone" is willing pay the cost of overdevelopment before the market exists. (stimulation is an incredibly expensive way to do anything, generally best used only in an emergency) | |
| | | BiggA
join:2005-11-23
EARTH | Re: New Goal It would be worth it given the economic cost that not having broadband is causing.
By that logic, if we had not subsidized rural electricity and telephone, no one would have that either. | |
| | | | rradina
join:2000-08-08
Chesterfield, MO | Re: New Goal I hear that a lot. What is the economic cost? Are there any hard numbers or formulas that at least show for every $1 of government broadband investment how much is returned? | |
| | | | | BiggA
join:2005-11-23
EARTH Reviews:
·Comcast
| Re: New Goal For people getting broadband where there isn't any already,
It would be nearly impossible to figure out, because it factors into education, which leads to future economic development.
Other than maybe in Pochahontas County, WV, where RF emissions are heavily regulated, wireless systems should be able to meet the 4/1 goal easily and fairly cheaply.
For probably 80% of the population, there is no reason that the existing providers, given a charge to do so, couldn't put in gigabit fiber to everyone. Verizon has already put it in some areas, albeit it is capped at 1/20th that speed.
What these companies also need to understand is that whoever has the most bandwidth (internet and TV) will win. U-Verse has 32 mbit down. A 1ghz HFC plant has 6gbit, while Fios has over 7.5gbit.
So, if Comcast wants to, they can upgrade their system to have 6gbps to all their customers, while AT&T is still trying to figure out how to get 32mbit service to some of their customers. Gee, I wonder who is going to win in the long run? Once you get to 7.5gbps vs. 6gbps, the race is on, and other factors can have a big influence. AT&T clearly doesn't get it.
Back to internet only, I suppose that by the time we get to DOCSIS 4, we would have gigabit data connections over HFC... | |
| | | | | | rradina
join:2000-08-08
Chesterfield, MO | Re: New Goal said by BiggA:For people getting broadband where there isn't any already, It would be nearly impossible to figure out, because it factors into education, which leads to future economic development. So if I went into a bank to borrow money and they asked me for a business plan that shows how I'll be profitable and I said that...
Where I work we look at ROI and we usually don't do things without concrete ROI. Sure, we do some things and that's OK because as a public company, we're wasting investor dividends. If investors don't like what we're doing, they are free to sell their stock and put their money somewhere else.
The government leaves me little choice. To remain free, I'm forced to fork over almost 30% of my income with little more than the illusion that I have some say in how it's spent. Why would want to add another program like this to a budget that we already cannot afford? | |
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| | | | | | said by rradina:I hear that a lot. What is the economic cost? Are there any hard numbers or formulas that at least show for every $1 of government broadband investment how much is returned? Imagine a nationally run network with all profit reinvested into the network or supplementing the national budget. Adding up all the profit of the ISPs in the US, that's tens of billions every year. Once you pay off the initial cost of laying down the fiber, you have a huge supplement to the budget.
Lower taxes, pay off the debt, whatever you want. | |
| | | | | | | | Re: New Goal and then i think of Amtrak and the USPS. | |
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| | tshirtPremium,MVM
join:2004-07-11
Snohomish, WA
kudos:3 Reviews:
·Comcast
| I believe that is the question that the Gov't/FCC is trying to answer now (surveying what and where broadband currently exists, the cost of 80-90-100% availablity of a set standard minimum, future expandability of possible solutions, cost of subsidy, and what economic benifit/return we might see)
Just picking a number out of thin air(currently very high service level was suggested) and saying "WE need this NOW, whatever the cost" is unrealistic, irresponsible, and may block,confuse and undermine more serious efforts to get some more realistic level of service AVAILABLE to most areas of the country. | |
| | | | | | Re: New Goal said by tshirt: I believe that is the question that the Gov't/FCC is trying to answer now (surveying what and where broadband currently exists, the cost of 80-90-100% availablity of a set standard minimum, future expandability of possible solutions, cost of subsidy, and what economic benifit/return we might see) Just picking a number out of thin air(currently very high service level was suggested) and saying "WE need this NOW, whatever the cost" is unrealistic, irresponsible, and may block,confuse and undermine more serious efforts to get some more realistic level of service AVAILABLE to most areas of the country. I agree with you. Kennedy was totally irresponsible and unrealistic proclaiming we would get to the moon by the end of the '60s. | |
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| | | | Exactly how "naturally" does a market with very limited if any competition really grow?
Let's be serious here, you and I both know that very few markets have anything at all even closely resembling competition and the very few that do don't really compete, they just kind of coexist together because it is in their stock jockeys best interest not to rock each others boats too much. | |
| | | | tshirtPremium,MVM
join:2004-07-11
Snohomish, WA
kudos:3 Reviews:
·Comcast
| Re: New Goal Natural growth would be enough demand to keep the price high enough to draw in additional providers, as it is the price is just low enough that other providers can't see the profit of overbuilding in a market where they will likely never see more than half the existing subs switch, UNLESS they can't build a system of MUCH higher speeds (which would cost more meaning higher priced service) and still probably wouldn't see a high enough take-rate to justify the full cost.
The markets that DO have 2 or more true high speed providers are the high density/higher income areas.
it's easy for subs to accept $100-300 per month for triple play in areas where rent or house payments are many time that, not too appealing where other costs are low enough that "The cable bill" seems like a house payment, yet those are the real costs of buildout, maintaince, technical support, etc. (the economics get much worse in low density, low income areas) | |
| | | | | | | Re: New Goal said by tshirt:Natural growth would be enough demand to keep the price high enough to draw in additional providers, as it is the price is just low enough that other providers can't see the profit of overbuilding in a market where they will likely never see more than half the existing subs switch, UNLESS they can't build a system of MUCH higher speeds (which would cost more meaning higher priced service) and still probably wouldn't see a high enough take-rate to justify the full cost. The markets that DO have 2 or more true high speed providers are the high density/higher income areas. it's easy for subs to accept $100-300 per month for triple play in areas where rent or house payments are many time that, not too appealing where other costs are low enough that "The cable bill" seems like a house payment, yet those are the real costs of buildout, maintaince, technical support, etc. (the economics get much worse in low density, low income areas) Your numbers are completely and utterly screwed up. Your rampant pro-corporation bias is rearing its ugly head. Running an ISP is a very low-cost, high-margin business. Laying the lines is expensive, which is why there is so little competition. This is why free.fr in France offers a $40 triple play that trumps 95% of all connection speeds in America. | |
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| | | | said by tshirt:And a new luxury car in every driveway, and a chicken in every pot? Are the being cheap? or fiscally responsible Are they dumb? or just don't see the need for a gig symetrical connection just to check email, surf the web. You can allow the market to grow naturally, i.e. companies WILL invest where they see the chance to profit. or you can artifically stimulate it ahead of demand, if "someone" is willing pay the cost of overdevelopment before the market exists. (stimulation is an incredibly expensive way to do anything, generally best used only in an emergency) There is no "organic growth" in an infrastructure market dominated by a duopoly. There is no excuse for the defense of these corporations. | |
| | | | tshirtPremium,MVM
join:2004-07-11
Snohomish, WA
kudos:3 Reviews:
·Comcast
1 edit | Re: New Goal I'm not defending them, just understanding their business models.
You seem happy to spend other peoples money, an unknown amount (perhaps hundreds of billions) in return for what you believe would be 10's of billions per year...However, what that industry recieves in payments, doesn't all end up as profit.
and then come the conditions
1} Would everyone be required to subscribe to the basic ONE FIBER network, even if they didn't need, want/couldn't afford service?
2} would the poor/senior citizen/disabled recieve free or discounted service? (would greatly effect the homes passed/$$$ ratio)
3}would gov't have undue influance on allowed/ISP services? or be able to view /monitor access/usage?
4} at what point would it be taxed and how would we be assured of reasonable rates?
I'm actually in favor of the single wire/fiber concept, I just don't see the support for paying to get there (everybody wants FREE) | |
|
| BiggA
join:2005-11-23
EARTH Reviews:
·Comcast
| We are not necessarily just talking about tax dollars. The universal service fund needs to be put towards broadband.
Broadband is a basic right at this point, just like telephone and electricity were three quarters of a century ago.
The business plan analogy doesn't work when you're talking about a state or country, not just one company selling a product. It's virtually impossible to account for the effects of current eductation in an unknown marketplace 20 years from now.
It shouldn't matter what the cost is. Gig fiber aside, I think everyone in the US should have access to a 10/1 50ms connection for $60/mo. 4/1 is a good interim goal, so let's assume that.
Aside from WV, it should be pretty easy to put up some WiMAX towers in many areas and get coverage that way. That's what WiMAX was originally intended for, not providing yet another ISP in bandwidth-rich cities. Other areas might be better suited by fiber, HFC, RDSLAMs with ADSL2+, or other tried-and-true broadband technologies.
The idea I really like is a solar-powered plane that circles at, say, 80,000 feet in a small area, and acts like a close-range satellite. It could cover a 3600 square mile area with high-speed, low-latency broadband, bringing the promises of satellite without the awful latency.
The problem in these markets is that there is NO natural growth, because there is no way to recover the capex needed to get broadband out there.
A problem that isn't as big of a deal, but still critical to broadband in this country, and much more widespread is a lack of competition in many markets. | |
|
 Z80APremium
join:2009-11-23 | Sure Because there was no investment when they were regulated. | |
|  MurdocPremium
join:2009-02-08
Manitowoc, WI | What investment? Wasnt there supposed areas that were supposed to get stuff like fios and whatnot? And then they backed out of doing it. | |
| | | | Re: What investment? Yes, in the companies own words broadband was 45mbps symmetrical and it was suppose to be delivered to a vast majority of their foot print by 2004.
All those with 45mbps symmetrical please raise you hand!
Funny how they utter those very words when they were under the threat of regulation with the 1996 act. Funny how that act was so fully of loop holes that they didn't deliver on any of it just a few years after it was enacted and yet here we are again........ | |
|
Gami00
join:2010-03-11
Mississauga, ON | should just get regulated.. I doubt it matters at all
over the next few years, all companies will probably cut back on all investments and cut back on employees..
so just regulate it anyway. their threats are meaningless when they already plan to do it regardless of regulation. | |
| | | Idiots Call these Telco's on their bluff. If they stifle investments and fire people then they are only hurting themselves. If that's their prerogative, let them do it.
Do not become baffled by their bullshit. | |
| | | AT&T Att is just like Freddy Kruger and Jason, it never dies and always finds a way back in!!!! | |
| | WhatNowPremium
join:2009-05-06
Charlotte, NC | Re: AT&T AT&T has laid off and most techs that have 30 years service have left or are looking to leave they can hardly function. So laying off more due to regulations would be hard.
If you force open infrastructure they will not do any more then they have too. Example they were forced to allow the use of any extra ducts in manhole runs. If they cleared the ducts of abandoned cables another vendor could use it without paying for the cost of the cable removal. If they left the old cable in place the other vendor had to pay the full cost of removal. In the end the telcos quit building manhole runs because they bore all the costs and other vendors could use them for next to nothing. If you wonder why the downtown areas don't get infrastructure upgrades very fast it is because they lost control of future use or competitors cut into profits using the infrastructure they placed for future use.
Think of as if you build a warehouse twice as big as needed because you had big growth plans but the Government comes along and sys you have to rent the unused space at break even rent to a competitor. You get no money for the time spent getting permits, your interest payments, or electricity just the cost of the physical space set by the Government. The next time you would build just what you need and may be slower to expand because you will need to build another building.
How many have seen any system where everybody was treated equally and the Government set the price stayed healthy very long. | |
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| | The Real Threat I believe the real worry for politicians is that the major incumbents will donate less to their campaign funds. | |
| Sammer
join:2005-12-22
Canonsburg, PA | Use or lose it If the telcos really want to see investment then our federal, state, and local governments should all adopt a use the ROW for Fiber To The Home or lose the ROW attitude! | |
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Re: Wrong