Independent ISPs resist SBC contract change

They offer DSL at half the speed and half the quality. Now they want to use bandwidth that someone else has already paid for and there not willing to compensate them for it.

I think it's time to break the monoplies agian. There's talk in Washington that they may want to stop allowing the Bells from offering DSL at all because it's a conflict of interest. The bells would have to sell off there DSL divisions and just be line owners and still provide basic phone service.

I think this would be better for all of us.

[text was edited by author 2001-06-26 18:26:06]

[text was edited by author 2001-06-26 18:27:05]

It's definitely a conflict of interest to provide the infrastructure and compete with your customers to provide the ISP services. If only Washington would do something, the independent ISPs would stand a fighting chance against the ILECs.

said by arielnet:

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It's definitely a conflict of interest to provide the infrastructure and compete with your customers to provide the ISP services. If only Washington would do something, the independent ISPs would stand a fighting chance against the ILECs.

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I agree. I think the RBOCs (the major ILECs that serve the largest markets) should be prohibited from providing advanced data services along the residential loops. They should be allowed compete along business loops where there exist a myriad of other data providers who operate over their own property networks. But along the last mile, the ILECs should just be permitted to act as facility providers and charge carriers a fee, or toll, for use of their facilities, whether it be the CO, an RT, a cross connect or the fiber and copper.

In such a manner, the RBOCs would be encouraged to make the necessary investments demanded by marketplace. They would not act to protect their own carrier business, but rather would seek the business of all carriers whose cash is as green as the next carrier. To permit the RBOCs to own and control their own facilities, yet allow them to compete with the very carriers that must lease access from RBOC owned facilities, can only lead to further monopolistic practices, which is opposite of the direction in which Washington is supposedly leading the industry.

It's only a matter of time before an honest Supreme Court who's not bribed by Telco money comes to that obvious conclusion.

said by 2farfromCO:

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It's only a matter of time before an honest Supreme Court who's not bribed by Telco money comes to that obvious conclusion.

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Sorry to disagree with you . . . once again, 2far. How can you assert that the U.S. Supreme Court is not "honest;" that justices are subject to bribery, and then claim such conclusion is an "obvious" one?

I'm just trying to figure why you provide this comment since its likely that you yourself know the statement is baseless. Obviously, you're not happy with the RBOCs . . . in addition to TimeWarner. But don't lay blame with the Court. They simply interpret the law. If any blame exists, you might shift your attention over to Congress. Have you ever written either of your Senators, or your House Representative? Let him or her know what you think. But to cast aspersions upon the high Court is a bit ridiculous.

said by lml2000:

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I think the RBOCs (the major ILECs that serve the largest markets) should be prohibited from providing advanced data services along the residential loops. They should be allowed compete along business loops where there exist a myriad of other data providers who operate over their own property networks.

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Just so I understand you, what you are basically saying is that the RBOC's are making residential competition (where there is relatively little revenue generated compared to business accounts) difficult, but they are more than happy to allow the large business accounts (that bring in MUCH higher revenue) to go to competition???

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To permit the RBOCs to own and control their own facilities, yet allow them to compete with the very carriers that must lease access from RBOC owned facilities, can only lead to further monopolistic practices, which is opposite of the direction in which Washington is supposedly leading the industry.

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This hypothesis depends on the assumption that in order to compete in telecom, a company is required to resell network elements rather than invest in and build its own. This is obviously not the case, as the most successful local telecom competitors have either completely built their own network or have combined such efforts using UNE resale as a "crutch" to support themselves with until their own network is complete.

michael74

said by michael74:

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Just so I understand you, what you are basically saying is that the RBOC's are making residential competition (where there is relatively little revenue generated compared to business accounts) difficult, but they are more than happy to allow the large business accounts (that bring in MUCH higher revenue) to go to competition???

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The premise underlying this comment is that many carrier networks exist near the urban core to service many business for both voice and data. In Los Angeles, if you work downtown or in Century City, for example, your business is not dependent upon PacBell for voice or data. There are many carriers with their own fiber running in the streets to serve your company. In contrast, along residential loops that wind through the neighborhoods there is only one carrier owning the cables, the incumbent carrier. My point was that where there is competing infrastructure, or more definitively, competing pipes, then its OK for the incumbent carrier to compete as a carrier. But when the incumbent carrier is the SOLE provider of the facilities necessary to provision a line, then it would be a much better world if they were prohibited from competing as a carrier, and sought revenues solely from leasing capacity to disinterested carrier networks.

said by michael74:

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This hypothesis depends on the assumption that in order to compete in telecom, a company is required to resell network elements rather than invest in and build its own. This is obviously not the case, as the most successful local telecom competitors have either completely built their own network or have combined such efforts using UNE resale as a "crutch" to support themselves with until their own network is complete.

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See above, michael. I think you misconstrue my hypothesis in effort to make some case against it by offering a response like "[t]his is obviously not the case" when in-fact you premise your conclusion upon an assumption. I would ask that if you have a specific issue with my hypothesis to present with some reasonable specificity so I may discern rather than guess what you are challenging. In short, I ask that you first state your case, before you build it, or rather detract mine.

quote:

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The premise underlying this comment is that many carrier networks exist near the urban core to service many business for both voice and data. In Los Angeles, if you work downtown or in Century City, for example, your business is not dependent upon PacBell for voice or data. There are many carriers with their own fiber running in the streets to serve your company. In contrast, along residential loops that wind through the neighborhoods there is only one carrier owning the cables, the incumbent carrier. My point was that where there is competing infrastructure, or more definitively, competing pipes, then its OK for the incumbent carrier to compete as a carrier. But when the incumbent carrier is the SOLE provider of the facilities necessary to provision a line, then it would be a much better world if they were prohibited from competing as a carrier, and sought revenues solely from leasing capacity to disinterested carrier networks.

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The problem it seems is not that ILEC's aren't providing enough access to resellers and it isn't that they are being anti-competitive, but rather that competition doesn't want to go into residential services. The Telecom Act of 1996 doesn't state that the ILEC's are required to force other carriers to service residential and business accounts, rather that they are required to allow competitors to resell the services non-discriminately. However, it is worded such that "RBOC's are required to offer at wholesale ANY services that it sells retail" and that includes any new service it may dream up or invent- hence causing a conflict of interest- why invest in a new infrastructure when the second you do, someone can use that at little cost to make a profit on your investment? Residential competition is non-existent because no one wants residential business, not because the ILEC's are preventing it- ILEC's should not be penalized for this fact.

michael74

Thanks for your response, michael74, but again you fail appreciate my point for you immediately refer to the status quo, and to the Telecom Act of '96, when what I propose goes beyond the Act in an effort to remedy the problems that exist today. Implicit in my proposal is my call to repeal the Act and enact new legislation, or if possible, a call for significant amendment. For you to invoke the Act in response to my proposal is a non-sequitur.

said by michael74:

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The problem it seems is not that ILEC's aren't providing enough access to resellers and it isn't that they are being anti-competitive, but rather that competition doesn't want to go into residential services.

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Most of the competition does not wish to go into the residential neighborhoods because the profit margins are much slimmer than they are in the commercial sector. The CLECs were competing with the ILEC for business accounts long before they made the move to the residential loops, which has proved imprudent, but in some cases fatal. So what's your point?

said by michael74:

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The Telecom Act of 1996 doesn't state that the ILEC's are required to force other carriers to service residential and business accounts, rather that they are required to allow competitors to resell the services non-discriminately. However, it is worded such that "RBOC's are required to offer at wholesale ANY services that it sells retail" and that includes any new service it may dream up or invent- hence causing a conflict of interest- why invest in a new infrastructure when the second you do, someone can use that at little cost to make a profit on your investment? Residential competition is non-existent because no one wants residential business, not because the ILEC's are preventing it- ILEC's should not be penalized for this fact.

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Again, michael74, see above. I don't dispute what the Act does and doesn't do. You miss the nature of my point completely, which is a hypothetical proposal to remedy what I see will be a continual problem, not only along the telco platform, but the cable one as well. So long as the owner of the facilities is allowed to compete with the very "tenants" to which it leases access, there will never be a level playing field.

Most incumbents today want the retain hold over the residential loop, not to necessarily offer voice or data, but to offer premium high profit margin services appurtenant thereto. On the voice platform, for example, those services today may include call-waiting, call forwarding, speed dialing, voice mail messaging, etc. My proposal states that that if the incumbents are prohibited from provisioning voice along the residential loop, acting as a carrier, and be prohibited from offering such services, they should be permitted to charge facilities access fee that that permit them to enjoy a percentage or "cut" or "take" in the revenues realized by the carrier permitted to offer such services. In short, the ability of the incumbent to enjoy high margin business should not be cut off, but rather "partnered" with the carrier. In this manner, both the carrier and the facility provider have a common interest to see the most advanced and most robust network built out. Contrast this to the status quo, where the facility provider/carrier is reluctant to invest and build its infrastructure for fear it must "give away" these potential revenues through regulation. This is the meat of the issue.

said by lml2000:

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But along the last mile, the ILECs should just be permitted to act as facility providers and charge carriers a fee, or toll, for use of their facilities, whether it be the CO, an RT, a cross connect or the fiber and copper.

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If ILECs are limited only to being facilities providers, they will either:

1) Not bother upgrading their facilities (including RTs for DSL, etc.)

2) Pass the cost of the facilities upgrades on to CLECs (and in turn to consumers).

1) Not bother upgrading their facilities (including RTs for DSL, etc.)

2) Pass the cost of the facilities upgrades on to CLECs (and in turn to consumers).

Uhh... I believe that's what they do already. When no competition exists at all, they do #1.

AS for #2... in all cases they pass along the costs to the end users. They aren't doing it for charity.

said by KrK:

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Uhh... I believe that's what they do already. When no competition exists at all, they do #1.

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There is competition... it's called CABLE. Face it, they're the only REAL competition AND they're the real threat to resellers like Covad. Cable companies are promising to open their network to other ISPs (on their own terms) but have no mention of broadband resellers. Broadband resellers should be whining about the cable companies just as loudly as they whine about the telcos.

said by KrK:

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AS for #2... in all cases they pass along the costs to the end users. They aren't doing it for charity.

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You are correct. I was trying to say: regardless of Bell breakup, the cost for broadband will remain high.
[text was edited by author 2001-06-28 00:11:42]

1) Hrm, spending $6 billion dollars on RT's isn't upgrading facilities?

said by icp1:

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1) Hrm, spending $6 billion dollars on RT's isn't upgrading facilities?

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Before SBC proceeded with its Pronto Project, I believe it received a waiver from the FCC that permitted it to build such facilities without the obligation to provide physical access to the CLECs. CLEC access to Pronto facilities are essentially "virtual," as a CLEC obtains "access" to the UNE at the CO via the OCD, rather than physical access at the RT where the copper is nailed to the DSLAM card. This very issue is the one that being challenged in Illinois by its Commerce Commission. Nevertheless, it remains to be seen how long this waiver will remain in place as the issue of "unbundling" network elements is not black & white, and is being continually debated as we speak.

said by icp1:

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1) Hrm, spending $6 billion dollars on RT's isn't upgrading facilities?

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You are looking at the past. lml2000 is talking about a possible future.

If telcos (not just SBC) were only allowed to provide the facilities, where is their incentive to do any further upgrades? If SBC two years ago were not allowed to sell DSL, do you really believe they would install remote terminals? Why would they spend $6 billions dollars UP-FRONT and HOPE their resellers were successful so they could get some revenue to replace that 6 billion dollars?

The only reason they would upgrade the facilities in this future scenario would be if the CLECs agreed to go into long term contracts (in the tunes of $6 billion and more). Even then it's a large risk for the ILECs if the resellers go under... so the rollout would probably be a lot slower.

said by mvan:

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If ILECs are limited only to being facilities providers, they will either:

1) Not bother upgrading their facilities (including RTs for DSL, etc.)

2) Pass the cost of the facilities upgrades on to CLECs (and in turn to consumers).

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Correct, and the choice is "Door #2. The ILECs should be fine with being just being the facilities provider, owning and maintaining them, then leasing out their use or capacity, for a fee, much like landlords do. The ILECs can charge a fixed fee, and charge an incremental one that might be linked bandwidth or e-commerce revenues realized, much as the landlord does in many commercial leases.

My point is by removing the interest of the ILEC as a carrier with whom it would otherwise compete with on its own platform, leads to a more equitable market. As long as the owner of the physical layer, on both telco and cable platforms, ALSO competes with other communication providers, whether it be of voice, data, or video, the owner of the physical layer will always work to create an advantage for itself at the expense its non-owner competitors.

What we see here today on the telco platform is a movement by the competitor community to force the owner's hand. As a consequence, that owner has been reluctant to respond to other market forces that demand that it invest and improve its infrastructure. As a consequence, many consumers suffer; the national interest, IMHO, suffers. What I propose is a policy that eliminates the "fly from the ointment" so to speak, yet leaves in-tact the financial incentive to invest in new plant.

The telcos certainly have the right to profit from their investment. But I would argue for a platform where "all competitors are created equal." IMHO, when it comes to residential loops, such equality can never be attained. Mama Bear will always get her porridge; Baby Bears will always be crying that they don't have enough to eat.

If you want to stop monopolies, stop the cable companies who control 70% of broadband access with no choice for ISPs.
At least with the RBOCs you can choose which ISP to use (for now).

And until I see the contract instead of some random comments from the ISPs and an author's observations, I will withhold my judgement on its appropriateness.

Cox Communications, has announced that they are opening up their services to ISPs, and are in the testing stage now. They also have reseller programs. That doesn't sound like they are trying to reinforce monopoly status to me.

The argument that the cable companies are the REAL monopolies, not the RBOCs, usually comes from the RBOCs. It's a good way to divert attention from their monopolistic tactics.

I too withhold judgment on issues until I know all the facts. The publicity is coming from interested parties. But, there is enough outrage among the industry to generate this much buzz. That in and of itself should say something about the severity of the problems.

Further, how do you intend to see the actual contract that SBC has sent to ISPs? It's confidential. Do you work for SBC?

said by arielnet:

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Cox Communications, has announced that they are opening up their services to ISPs, and are in the testing stage now. They also have reseller programs. That doesn't sound like they are trying to reinforce monopoly status to me. The argument that the cable companies are the REAL monopolies, not the RBOCs, usually comes from the RBOCs. It's a good way to divert attention from their monopolistic tactics.

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The sole MSO that is presently required to open up its pipes to other ISPs is AOL-TWX pursuant to the terms of approval of merger by the FTC and FCC. Cox is following in the footsteps of AT&T who was the first to publicly announced its intent to open up their pipes. But, IMHO, T has done so more from a standpoint of fear of regulation, particularly in light of the Portland decision that held cable modem access is not a "cable service" but rather a "telecommunication service." The import of this ruling, though narrow on the issue of transfer of control of a franchise, is that the court, in this case the Ninth Circuit, left open the issue of common carrier status of the cable modem platform. This, IMHO, is the greatest fear MSOs have, and as a consequence are a bit more willing to open up their pipes, but under their own terms.

It remains to be seen how "open" AOL-TWX will become. But I would argue what TWX permits, or does not permit, will become the de facto standard. This will not be a must meet standard, but rather a not to exceed one. Obviously, AT&T and Cox are likely to do less to open their pipes than what AOL-TWX may be obligated to do under terms of the Federal government's approval of their merger. I think the import of my comment here is that the MSO have a long, long way to go before they can assert there as open as the telcos that have been regulated as common carriers for a long, long time.

I think the RBOCs present a strong argument to Congress when it comes to investing and deploying new broadband infrastructure. You cannot dispute that under today's regulatory scheme, MSOs have it much, much easier than the telcos. All the telcos are asking for is for Congress to create a level playing field, particularly in an area where they will compete head-to-head -- data. More likely in this competitive field will broaden to include voice, and in some limited instances down the road, video. If Congress gives the telcos what they want, I can almost assure you that you will see the telcos push video in some select markets. Then you'll see some real competition.

Cable companies are not REAL monopolies. For the most part they are de facto monopolies. No LFA prohibits another company from coming into their community and offering cable service. The big problem is building new cable plant from scratch, which is prohibitively expensive in most, but not all markets. While cable franchises are non-exclusive licenses, cable plant is privately owned. Herein is where a de facto monopoly is derived. Compare regulation over this platform with that of the telcos and tell me how the telco argument does not have merit.

While the LFA has the power to grant an overbuilder a franchise to compete, it does not have the power to force the incumbent MSO to offer up the bandwidth over its pipes, and rightfully so. But the telcos are treated differently because they do not fall under the safe harbor of legislation unique to cable because of local broadcasting issues, and the bandwidth requirements of broadcast video. But at issue here is data. Until Congress mandates open access upon the MSOs, IMHO, the telcos are well-founded in their efforts with Congress to put them in parity with their MSO competitors, at least when it comes to data. All I can say is that any voluntary efforts by any MSO in this respect should be reviewed with much suspect. Is it real or is it Memorex?

quote:

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You cannot dispute that under today's regulatory scheme, MSOs have it much, much easier than the telcos.

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Hmm, taking a look at their profits, how then do you explain that the telcos are swimming in cash (to the tune of $2B per quarter after expenses and taxes--each!), and the cable MSOs are almost invariably running in the red?

They have it "easier" in terms of dealing with regulators, but they don't have an "easier" time growing their businesses.

I can offer a theory to explain that--the telcos are not responsible for generating any "content". But the MSOs have always offered their wares as a content-delivery system. So they've been squeezed ever-harder by the licenses and royalties levied by content providers.

As long as the RBOCs stay out of the content business, they'll probablly remain king of the hill, whether or not the FCC grows fangs to uphold regulations.

said by richb01803:

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Hmm, taking a look at their profits, how then do you explain that the telcos are swimming in cash (to the tune of $2B per quarter after expenses and taxes--each!), and the cable MSOs are almost invariably running in the red?

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First off, richb, you cannot look solely to profits. Profits are simply revenues net expenses. Where do you think most of the money the MSOs made over the past decade went? They went to acquire other systems. Now they're going to upgrade or rebuild plant. The consolidation within the cable industry over the past few years has been unprecedented. Consolidation, and system upgrades cost money. So, to focus on profits, misses the point, and misses it greatly. To take your argument one step further, take a look at the balance sheets of the MSO vs. a telco and compare the debt/equity ratios. Consider the interest expense to support that debt. Again, your focus on profitibility misses the point. The point here is regulation and the ability to compete on a level playing field.

said by richb01803:

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They have it "easier" in terms of dealing with regulators, but they don't have an "easier" time growing their businesses.

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. . . and you point is???? The MSOs have had no problem in growing their business even with regulated cable rates. They just took on enormous level of debt because they saw the value in undervalued cable plant. Go take a look at the stock charts of the largest cable operators over a 5-year horizon. You'll note how much less valued cable systems were 5 years ago than they are today. Again, focus on the issue, regulation; level playing field. To focus on growth, again, misses the point.

said by richb01803:

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I can offer a theory to explain that--the telcos are not responsible for generating any "content". But the MSOs have always offered their wares as a content-delivery system. So they've been squeezed ever-harder by the licenses and royalties levied by content providers.

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Say what? We're talking about data networks, not broadcast. And even if we are talking about the delivery of content, in terms of streaming video, how is the MSO more disadvantaged than the telco on this platform? If anything, the MSOs are significantly advantaged in this arena. Who do you think owns have the upper tier broadcast channels? Who owns CNN? Who now owns most of Speedvision? Who now owns most of Outdoor Life? Who owns the WE channel? The Game Show Channel? The list goes on. But the answer is the same: the cable companies. Sorry, rich, but you're losing it.

said by richb01803:

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As long as the RBOCs stay out of the content business, they'll probablly remain king of the hill, whether or not the FCC grows fangs to uphold regulations.

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Again, I can only respond with a "say what?" I can't get a clue what you are talking about, but more importantly how it is relevant to the issue discussed here.

I can only conjecture that you are in love with cable; that you work in cable, or that are somehow connected with cable, that you feel so obligated here on DSLR to continually promote cable as the all and end all platform. I hate to tell you this, but it ain't. Cable will predominate in certain markets, but will lag in others. IMHO, it all depends upon the MSO, its willingness to invest in state-of-the-art plant and willingness to maintain a high level of customer service. Some MSOs strive to do this today; others clearly do not. Many MSOs have made some pretty bad moves, but they're still standing due to overly protective regulation that yields them de facto monopolies in many of their markets. These MSOs fear overbuilders; fear DBS; but fear the telcos above all, and will do anything to preserve the advantage when it comes to regulation, not only at the Federal level (i.e. Michael Armstrong), but also at the local level. One need only consider the most powerful lobbies in this country. Yeah, the telcos are big, but they are light-years behind the MSOs when it comes to influencing Federal policy and the franchise policies of the many LFAs they are beholden to.

All I call for is for parity when it comes to regulating two industries that historically have offered different services, but now are merging into a single industry and must compete for the same customer to provide a whole basket of service bigger than the services previously provided. Its really just a matter of time before telcos and MSOs are regulated equally. What is being debated right now is just the first step that is necessary to encourage the telcos to make larger investments. Under the present scheme they are unfairly burden by the Telecom Act of'96, which is a POS legislation in light of today's enviroment. As a consequence, the telcos are reticent to invest and expand their network any further than they feel necessary in light of excessive regulatory constraints. Under the present scheme, most of what we hear are kicking and screaming CLECs and ISPs complaining about the telco stranglehold. Its not really a stranglehold but a reluctance to move forward, because the bigger competitor out there, the real competitor, are the MSOs. And if telco regulation is not relaxed, all the kicking and screaming by the CLECs and ISPs will be for naught, because without the physical layer of the telcos to compete over, they won't be have any opportunity compete. Instead, all the action will be over at the cable "end of the field," which of course, is what you'd like to see.

Just read all the horror stories regarding VADI (Verizon Advanced Data Services) They were set up so that Verizon can offer data services in addition to connections. Read internet service. They were also established as a CLEC, not an ILEC. Now when I, as an independent ISP, need to get a frame-relay circuit or other data service, I have to go to my competitor to get it. My competitor, now has a whole bunch of information about my customer that I'd rather they did not have. And my competitor, of course, would be just as happy to crawl over me for the business. If that's how its going to work for DSL, it'll be even worse than it is now.

Curtis Maurand
system administrator
lamere.net powered by Prexar
(my opinions are not those of my employer.)
mailto:curtis@lamere.net

Think the RBOCs are bad with gathering information on their resellers' customers?

Take a look at Covad's Safety Net program. It's a safety net for Covad, not for the reseller or even the end user.

All along, they've been collecting enough end-user information to market their services directly and bypass the reseller.

The Safety Net program formalized their strategy: in essence, to pry end users away from reseller "partners". It's a worse policy than anything I've seen from the RBOCs, which are regulated in such a way as to preclude their making direct use of this customer data to steal customers. Covad is under no such restrictions.

said by cmaurand:

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Now when I, as an independent ISP, need to get a frame-relay circuit or other data service, I have to go to my competitor to get it. ... If that's how its going to work for DSL, it'll be even worse than it is now.

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Any "powered by Covad" ISP is going to its competitor to get DSL. Any RBOC DSL reseller is likewise doing the same thing, though it's somewhat more difficult for the RBOC to launch a customer-stealing program a la Safety Net.

The ultimate effect of this is to sharply reduce the number of sales channels, and sales folks and advertising, promoting DSL other than true-blue RBOC offerings. It's hard to imagine why any Covad reseller wouldn't be contemplating tearing up its Covad resale contract right about now.

said by richb01803:

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Any "powered by Covad" ISP is going to its competitor to get DSL. Any RBOC DSL reseller is likewise doing the same thing, though it's somewhat more difficult for the RBOC to launch a customer-stealing program a la Safety Net.

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What?
Covad does not sell direct, afaik. If they do, this reply is in error. But since Covad does not sell direct, how is a partner ISP 'going to its competitor'??
If Covad sells direct, then you are correct. That would be the same situation as a reseller and an RBOC, eh? I don't think you're correct here (though I wouldn't doubt Covad *would* use the 'safety net' list anyway they could if it means more cash).
KM

said by richb01803:

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The Safety Net program formalized their strategy: in essence, to pry end users away from reseller "partners". It's a worse policy than anything I've seen from the RBOCs, which are regulated in such a way as to preclude their making direct use of this customer data to steal customers. Covad is under no such restrictions.

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Actually, they are. Our original contract (haven't signed on to the new one for this exact reason) does stipulate that we "own" the customer, and we are under no obligation to provide Covad with an email address or any other means of contact outside of the information required for install.
The wording is clear enough that it would be an open and shut case if they were to start contacting our users to solicit their own services.

The new "bronze" contract does specifically state that we MUST hand all that info to them and that if we were to fall behind for some period of time the customers would be taken as collateral.

I've yet to hear a customer speak to the TAC at Covad (they aren't even supposed to anyhow, but some customers find the number) and get any kind of sales pitch. They are much more ethical in this regard than Verizon, who we were partnered with early on. We started documenting the number of times customers were told "if you want this fixed, just change to Bell Atlantic as your ISP", and just about anyone that called to troubleshoot was told that exact line. That's BS, and we ended that relationship shortly after that.

You don't know what you're talking about. Verizon (and old BA & GTE) was offering data services before VADI was ever created. VADI was created as a stipulation from the FCC as part of the BA/GTE merger. This was not something Verizon wanted to do and nobody benefited from it, except maybe the competition.

If you're going to try to prove a point, at least get your facts straight.

Now isn't it up to the website or other server to provide the content? Then why does SBC want to have the "right" to provide videoconferencing? You could do it on ANY ISP, with ANY videoconferencing program (hell, you could even do it in Quake3 or Half-Life with that speech thing).

Or is this another attempt by a big company to monopolize content? Haven't we learned our lesson with AOLTimeWarner?

Unfortunately, the public has yet to see, or understand what SBC is trying to do with their forced "Broadband Services Gateway" or BSG. It is something entirely new.

In fact, it is so radically new that even Pac Bell (SBC) has been unable to explain what it is, effectively, to ISP customers, they simply require ISPs to sign up. "Don't worry about it," they say, details are being worked out.

If I had not seen it demonstrated by Cisco, in their lab, as an alpha-test product a couple of years ago, I would be in the dark as well. I will say it again, you haven't seen this product deployed on the market - yet. I was impressed but as an ISP, it's a scary paradigm shift in how broadband is delivered.

In a nutshell, you'll hate it or love it. Some consumers and media companies will see it as a realization of what broadband was dreamed and hyped out to be. But a good number of people I see postings from here on DSLR are going to hate it. In fact, really really hate it, especially when it is SBC's way or no way. Getting forced into using the BSG will make the Northpoint fiasco look like a slumber party to many. If nothing else, it will eliminate the ISPs ability to offer services that rely on a layer 2 connection between the ISP and customer. Gone will be static IPs among other things, and the ability to offer services (like H.323, voice over IP, etc) that require static IP or a "real" connection iwth all TCP/IP ports intact. Now you will need to hope that SBC offers these services and hope you can afford SBC's price.

SBC wants the ISP to bill and pay for the customer line, which will continue the impression that you have a choice in ISPs, however, their contract calls for the customer to have a PPPoE connection with a username and password login that will present you an HTML menu after you login. That's not that different from how PPPoE clients or routers connect now, but with BSG you don't connect to your ISP's router and login; you will now connect to an intermediate "gateway" that SBC operates, with a big SBC logo and popups prominently displayed. Identified as a "xyz" ISP customer, SBC's menu will present you with various choices, including your ISP as one of the "service choices". You will have to select your ISP, which will in turn set up a L2TP tunnel between SBC and your ISP. Only at that point do you have any connection to your ISP and you will be able to "surf" or perform other internet activities through that tunnel. But Pac Bell controls what you have access to. Other services could also be offered, including VPN access to your corporate network, or pay per view streaming video, commercial MP3 and software service, and so on. Supposedly, several media companies are lined up already to offer these services.

ISPs are concerned on several fronts. Forget your current PPPoE routers or ability to connect this service to your LAN as you do now, this concept forces the "single seat" per line service model that the ILEC's and Cable companies love to push, but is not what a good portion of the public wants as far as business broadband is concerned. Sure, "smarter" routers programmed will be developed to work such BSGs and automate internet access, but this will just add to the overhead and complexity.

SBC requires the ISP to collect and pay for the circuit, therefore the ISP is responsible for the circuit and would have to provide first tier support, however, SBC's network and considerable complexity sites between the customer and the ISP. The ISP gets called for radius issues and radius problems, with no control over the network. SBC will have complete access to the customer information, apparently including financial and personal information provided to the ISP for purposes of billing the additional services. Finally, they prohibit the ISP, who is paying for a circuit, from marketing services to their OWN CUSTOMERS, SBC is free to market to the ISPs customers, and in the contract has no provisions for sharing any revenue gained on that circuit whatsoever. Other issues bothering ISPs that have yet to be addressed are legal responsibility, such as how to prevent or safeguard purchasing of porno videos by minors, fraud and collections if your credit card is charged by a user, and so on. There is no assurance that SBC won't offer an AOL or other service's button, marketing a "free trial" setting up a double dipping arrangement. SBC gets extra advertising revenue and a possible spiff on a sale, the selling ISP continues to pay the bill for the bandwidth.

If SBC wanted to simply offer the BSG, why not deploy it on their own services? Let the ISPs pass on this turkey. Consumers who want such capability would flock to SBC's own affiliated ISP with this exclusive feature, right? Well, they know it is likely to be unpopular and would actually increase defections to independent ISPs, so they want to force it on ISPs, requiring contractual signature or the ISP customers risk shut off end of 2001. (even the independent ISPs believe this won't happen, but it is a threat)

As had been stated here before, SBC has made a point of requiring NDAs so it is unlikely that any member of the public will get a gander at a copy, at least any time soon. But suffice it to say that it is so insulting and insidious, I don't think you'd want to do business with an ISP that would be willing to do business on SBC's terms. As it stands This means that while exiting independent ISP customers may get the right be grandfathered, most everyone will be getting out of the business. If you are in an area that isn't serviced by a CLEC (if they are also not driven out of business) or a cable company that offers compatible service like you want it, your choices will be next to none.

The general public, for the most part, either just wants it to be cheap, or to have a choice in providers and services. This effectively eliminates the ability for an independent ISP to buy circuits from SBC, and use them to provide your business with a VPN or a static IP so you can run a mail server at your own location, or whatever you want to do.

Nobody will care if ISPs are forced or pushed out of business until the public realizes that it is through Contracts and other maneuvers like these eliminate the competition that would keep the ILECS honest and competitive. Through the BSG concept they will force small businesses and SOHO users back to their more lucrative T1, frame relay or ISDN products for true networking applications.

And if you think the Cable industry won't push the BSG concept on its customers, think again. It will happen. It purports to offer more value added services, but it also provides SBC and others with tremendous control and monitoring capability, and cable companies just LOVE to control what you watch, view, or do - just read their contracts.

Personally, having read the arrogance in the contract and party to CISPA discussions, this contract looks like the left hand didn't understand the internal hype, assuming that SBC had paid for enough congressmen and Tauzin-Dingell was already in the bag, and pushed the timetable up with their brazen idea of what they expect to be able to do once Tauzin passes - the BSG is a goal they very much want to press forward with. If this doesn't wake the public up into smelling what the ILECS are cooking up for broadband's future, I don't know what will.

Well said, dru. The harder we ISPs push for our rights with SBC, the more aggressive SBC gets in attempting to shove this unpalatable concept down our throats. It seems that no matter what we do, independent ISPs and more importantly, business customers will get screwed. Meanwhile, SBC lines their pockets with revenues generated from small businesses and SOHOs buying more expensive data services, and "value-added" services sold to all of our customers.

And to reward us for our cooperation in their plans, we have to take on the billing responsibility for those services, as well as the additional tech support headaches. Their tech support system doesn't work now. SBC will most certainly have major problems upon implementation of this extra layer of technology. I can't wait to start taking those calls. After all, there will be so much more that we can do to resolve the problems caused by their gateway:-P

Terms and conditions very similar to those in the contract that ASI is trying to get ISPs to sign and that ASI claims is proprietary and under NDA are publicly available within a boilerplate CLEC interconnection agreement available on SBC's website:
»clec.sbc.com/unrestr/int ··· /asi.cfm
It's the 8-state agreement, note the http*s*.
Not all ISPs are CLECs, just ignore everything that isn't DSL and it's similar to the proposed ISP contract.

With respect to the interconnection agreements, DSLnet appears to be the first CLEC to sign the agreement at least in California. It was filed with the CPUC earlier this month and at least two timely protests have been filed.

As for understanding what Pacbell/SBC/ASI is trying to accomplish from a purely technical perspective, we as an ISP have a very good grasp of it, and although ASI also is unable to nail down specifics with respect to various options they could take in implementing their goals, those details are largely irrelevant because we know the problems any form of BCG and PPPoE will introduce with respect to a less reliable network that is more complex and difficult to troubleshoot. We want pure ATM PVCs end to end like we have now, it can be done along with the BCG using two PVCs in the end user CPE, but ASI refuses to seriously consider it or to, as has been pointed out by others in other threads, invest in an OSS to make it happen and be supportable. It's not that a pure ATM model is more difficult to support than BCG, or that supporting both would be signficantly more costly than supporting one... ASI's excuse is that they already are far along in implementing this new model in the back office and they don't want to change now, yet they didn't discuss it with the ISPs first, except presumably their own sister company.

Thank you dru, for so clearly laying out the issues.

The only thing I would dispute in your post is the statement, "you haven't seen this product deployed on the market - yet."

Please get in touch with just about any ISP that provides DSL service in Cincinnati, OH, and they will be intimately familiar with this Cisco product and the horrors that it inflicts on independent ISPs and their customers.

Cincinnati Bell is not implementing this setup *exactly* the same way you are ascribing to SBC, but its extremely close, and uses the same Cisco equipment to do so. (Cincy Bell uses policy routing rather than L2TP tunnels to get the traffic to the ISP, and no PPPoE is involved...which is actually a little *worse* from a technical standpoint than the SBC setup you describe)

This type of setup is blatantly preferential and discriminatory...you might look into the possibility of filing a state PUC complaint about this. Kentucky and Ohio have state laws prohibiting "preferential and discriminatory" telco provisioning, pricing, etc. I wouldn't be surprised to find that California has the same.

Good luck...and I (as a network admin running DSL service in Cincinnati) hopes you prevail so this can be used as a precedent against Cincy Bell!

Jeff
Head Network Administrator - IgLou Internet Services, Inc.

Will this cause the other Independent ISPs to do something of the same nature with their Telco's? It could have some very interesting side effects on the industry if this does occur for sure. Could be in all our best interest, maybe!

ISPs fight phone giant over DSL access from ZDNet.

said by arielnet:

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It's definitely a conflict of interest to provide the infrastructure and compete with your customers to provide the ISP services.

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It's the same situation that occurs with POTS(Plain Old Telephone Service). ILECs provide the copper and CLECs lease and resell the service. Funny that no one seems to give a rat's @ss about that.

If you're so down on Bells then boycott them by not even using their POTS service. That'll show 'em.

Personally, I don't use them.

Uh huh, right. Use that cell phone some more and make sure that battery is always charged and ready to go. Or better yet, go to your local cable company and use their high quality voice switching network. What's that? They don't have it available in your area? High speed internet access either? Funny, same thing here. AT&T has been promising internet access here every 6 months for the last 2 years. Now there's a company that will stand behind you (just don't bend over).
[text was edited by author 2001-06-27 13:58:40]