FTTP feedback

Last week this column focused on comments made by Carnegie Mellon University engineering and policy professor Marvin Sirbu at Supercomm, in which he pointed out an apparent clash between FCC Chairman Michael Powell’s vision of consumer broadband competition and one that would actually, well…work. The high take rates necessary to earn a return on a fiber-to-the-premises buildouts will probably prohibit any more than two competitors in a given market, Sirbu said, which led me to suggest that a more competitive model (and as we’re all proud members of a capitalist economy, can we agree that competition is a good thing for members of the telecom industry?) is one in which service providers rent rather than own the last-mile fiber. Not surprisingly, this generated some passionate responses from readers.

Reader #1: “What we need [in order] to foster competition in the telephony marketplace is some entity, be it private or public, to take control of getting the facilities to the end user. Then let all of the providers compete on an equal footing for the user's business. That is the only fair way to foster competition: Have everyone on an equal footing, not letting a single provider have all the facilities and (according to Mr. Powell) charge what they want for the use of those facilities. It seems to me Mr. Powell would rather see everything go back to the "Bell System" or some variation of that theme. Or maybe he just sees a nice corporate job with one of the ILECs [in his future] and just doesn't care that competition is disappearing after he leaves the FCC.”

Reader #2: “The FCC is responding to purely political/financial pressures from the heavily consolidated former Bells that own the local loop. Instead of pushing for shared infrastructure agreements that can allow competition--since there is no way in hell there is going to be more than one or, at most, two fiber feeds to neighborhoods, let alone to homes, in the forseeable future--the current administration has responded to money and pressure and crushed competitive chances. This has forced from U.S. soil virtually all of the telcos of the rest of the world, which invested several hundred billion dollars in the U.S. in response to "open competition" legislation, only to find the FCC and Justice Department unwilling to enforce regulations requiring local loop access--as they pushed to cancel these regulations. The impact on local consumers is devastating, especially small business. But I'm sure the campaign contributions are pouring in...

“[The wholesale, open-access] model is a nightmare. There are no standards that work, and there is such a market domination of proprietary tweaks that screw up compatibility. To have to deal with different interfaces in every real-estate division, none of which actually work the way they're supposed to work all the time, is such a no-hope mess that any telecom company would destroy its margins if they tried to embrace this.

"Now these telcos don't have to allow any access. What flagrant widespread fraud. What impunity from the spirit of regulations. And this corruption is costing small business, especially, untold billions of dollars. It makes the Enron scandal look like the tiny side-show it was. And [the Bells] have a their political front men saying this is happening to foster the building out of local infrastructure, which means the monopolists refused to turn on capabilities until they got the totally uncompetitive control they wanted. None of this is ever covered in the press, which is usually a mouthpiece for the PR angles of the current regulators. No one takes the time to find out the real sickening mess of this, and it is hard to document. It's corruption at a historical high, and it'll continue to abuse the small businessmen, especially, for many years. None of the world's telecom competitors are ever going to come back into the U.S. for another round of "open market competition," as they know they'll get abused by the local monopolists and the Republican government regulators will be on the gravy train and refuse enforcement.  The monopolists will wait out Democratic administrations and then brutally destroy any market chances of competition when Republicans return. That's recent history.”

Reader #3: “Why the third-party infrastructure model has been met by resistance. One word--control. If the major telecom companies (i.e., RBOCs) control the infrastructure, they control the access and the pricing. If they have to lease like everyone else, they lose that control. It seems that it should be cheaper for them to lease, since they wouldn't have the expense of laying cable (supplies and people). I've always thought the government should break the Bells into two companies. One would handle the infrastructure. The other would supply the services. This way the Bells can't complain that it is costing them more to maintain the infrastructure than they are allowed to charge. Everyone would be equal as far as how much they have to pay to use the facilities.”

Reader #4: What was your article about? I couldn't get past the hula girls."

E-mail me at egubbins@primediabusiness.com.