Dave Farber
2018-06-10 10:35:19 UTC
Date: June 10, 2018 at 5:49:10 AM EDT
Subject: [Dewayne-Net] While the Net Neutrality Fight Continues, AT&T and Verizon are Opening a New Attack on ISP Competition
While the Net Neutrality Fight Continues, AT&T and Verizon are Opening a New Attack on ISP Competition
By ERNESTO FALCON
Jun 8 2018
<https://www.eff.org/deeplinks/2018/06/while-net-neutrality-fight-continues-congress-and-states-att-and-verizon-are>
In 1996, Congress passed the Telecommunications Act in order to inject competition into the telephone market and set the stage for a nascent commercial Internet. Last month, US Telecom, the trade association of AT&T and Verizon, filed a petition with the Federal Communications Commission (FCC) to repeal one of the central requirements of the â96 Act that has promoted competition. That requirement being that incumbent telephone companies share their copper line infrastructure at regulated rates with to lower the barrier of entering an incumbentâs market. If granted, incumbent wireline telephone companies will be free to raise prices or simply disconnect competitorsâ access to their infrastructure and potentially jeopardize what the small amount of remaining competition that exists in high-speed broadband.
While copper wire infrastructure may strike people as the infrastructure of yesterday, its existence and the legal rights to access it remain essential for competitive entry into the high-speed broadband market. This is because it is one of the only remaining ways a new company can gain customers to then leverage to finance fiber optic deployment. Should the FCC grant the petition, the growing monopolization of high-speed broadband above 25 Mbps where more than half of Americans have only one choice will likely become worse.
Shared Copper Wire Access Promotes Private Competitive Gigabit Fiber Networks
Congress envisioned that forcing incumbent telephone companies to share their infrastructure with new market entrants would spur competition. It worked fairly well in terms of facilitating the creation of hundreds of new companies known as Competitive Local Exchange Carriers (CLECs), but in the years that followed financial shocks (namely the dot-com bubble) and other challenges resulted in many of these companies to go bankrupt. The small number of CLECs that remain continue to rely on these sharing agreements as a means to help finance their growth to compete and most importantly help finance their own fiber optic deployments.
Compounding the importance access to copper wire infrastructure represents is the fact that the FCC explicitly exempted incumbent fiber optic infrastructure from sharing requirements in 2005 at the advent of Verizon FIOS. The history that has followed the 2005 decision to exempt fiber optics from infrastructure sharing requirements pretty clearly demonstrates limited success in a handful of urban markets, but ultimately more than half of Americans now with a monopoly choice (which one should mark down as a failure in policy).
How Does Access to Copper Infrastructure Lead to Competitive Fiber Optic Deployment?
Entering into the ISP market is very difficult. This is because deploying the physical infrastructure to create an ISP is expensive even though maintaining the ISP once it has been deployed is a substantially lower cost. It is the high sunk costs of deploying fiber optics that has resulted in the growing lack of competition Americans have in high-speed broadband because very few companies can successfully pull off entering the market. Here is where access to copper line infrastructure still remains important in at least the markets that have CLECs reliant on sharing rights.
1) Have a pre-existing customer base that can be leveraged to obtain the finances necessary to absorb the high sunk costs of fiber optic deployment.
2) Have deep pockets or other means that can be leveraged to obtain those dollars to deploy.
3) Already have the fiber optic infrastructure deployed for purposes other than broadband and convert it over to broadband.
Many cities that launch their own community broadband service have some combination of 2 and 3 with their utility company while incumbent telephone companies like Verizon FIOS (which stopped deploying fiber years ago) started off with 1 and 2. A competitive entrant like Google Fiber had 2 and 3, but even they have stopped expanding their fiber build. For any competitors or new entrants that are small by comparison, the access to copper infrastructure is effectively the bridge to get customers and build a base that can be leveraged for fiber deployments (option 1). Without it, one should expect many small competitors to effectively die off in the broadband market if they are unable to obtain the financing necessary to deploy. With fewer companies deploying competitive fiber, one should expect the regional monopolization of high-speed broadband to get worse in the U.S. market.
[snip]
Dewayne-Net RSS Feed: http://dewaynenet.wordpress.com/feed/
Twitter: https://twitter.com/wa8dzp
-------------------------------------------Subject: [Dewayne-Net] While the Net Neutrality Fight Continues, AT&T and Verizon are Opening a New Attack on ISP Competition
While the Net Neutrality Fight Continues, AT&T and Verizon are Opening a New Attack on ISP Competition
By ERNESTO FALCON
Jun 8 2018
<https://www.eff.org/deeplinks/2018/06/while-net-neutrality-fight-continues-congress-and-states-att-and-verizon-are>
In 1996, Congress passed the Telecommunications Act in order to inject competition into the telephone market and set the stage for a nascent commercial Internet. Last month, US Telecom, the trade association of AT&T and Verizon, filed a petition with the Federal Communications Commission (FCC) to repeal one of the central requirements of the â96 Act that has promoted competition. That requirement being that incumbent telephone companies share their copper line infrastructure at regulated rates with to lower the barrier of entering an incumbentâs market. If granted, incumbent wireline telephone companies will be free to raise prices or simply disconnect competitorsâ access to their infrastructure and potentially jeopardize what the small amount of remaining competition that exists in high-speed broadband.
While copper wire infrastructure may strike people as the infrastructure of yesterday, its existence and the legal rights to access it remain essential for competitive entry into the high-speed broadband market. This is because it is one of the only remaining ways a new company can gain customers to then leverage to finance fiber optic deployment. Should the FCC grant the petition, the growing monopolization of high-speed broadband above 25 Mbps where more than half of Americans have only one choice will likely become worse.
Shared Copper Wire Access Promotes Private Competitive Gigabit Fiber Networks
Congress envisioned that forcing incumbent telephone companies to share their infrastructure with new market entrants would spur competition. It worked fairly well in terms of facilitating the creation of hundreds of new companies known as Competitive Local Exchange Carriers (CLECs), but in the years that followed financial shocks (namely the dot-com bubble) and other challenges resulted in many of these companies to go bankrupt. The small number of CLECs that remain continue to rely on these sharing agreements as a means to help finance their growth to compete and most importantly help finance their own fiber optic deployments.
Compounding the importance access to copper wire infrastructure represents is the fact that the FCC explicitly exempted incumbent fiber optic infrastructure from sharing requirements in 2005 at the advent of Verizon FIOS. The history that has followed the 2005 decision to exempt fiber optics from infrastructure sharing requirements pretty clearly demonstrates limited success in a handful of urban markets, but ultimately more than half of Americans now with a monopoly choice (which one should mark down as a failure in policy).
How Does Access to Copper Infrastructure Lead to Competitive Fiber Optic Deployment?
Entering into the ISP market is very difficult. This is because deploying the physical infrastructure to create an ISP is expensive even though maintaining the ISP once it has been deployed is a substantially lower cost. It is the high sunk costs of deploying fiber optics that has resulted in the growing lack of competition Americans have in high-speed broadband because very few companies can successfully pull off entering the market. Here is where access to copper line infrastructure still remains important in at least the markets that have CLECs reliant on sharing rights.
1) Have a pre-existing customer base that can be leveraged to obtain the finances necessary to absorb the high sunk costs of fiber optic deployment.
2) Have deep pockets or other means that can be leveraged to obtain those dollars to deploy.
3) Already have the fiber optic infrastructure deployed for purposes other than broadband and convert it over to broadband.
Many cities that launch their own community broadband service have some combination of 2 and 3 with their utility company while incumbent telephone companies like Verizon FIOS (which stopped deploying fiber years ago) started off with 1 and 2. A competitive entrant like Google Fiber had 2 and 3, but even they have stopped expanding their fiber build. For any competitors or new entrants that are small by comparison, the access to copper infrastructure is effectively the bridge to get customers and build a base that can be leveraged for fiber deployments (option 1). Without it, one should expect many small competitors to effectively die off in the broadband market if they are unable to obtain the financing necessary to deploy. With fewer companies deploying competitive fiber, one should expect the regional monopolization of high-speed broadband to get worse in the U.S. market.
[snip]
Dewayne-Net RSS Feed: http://dewaynenet.wordpress.com/feed/
Twitter: https://twitter.com/wa8dzp
Archives: https://www.listbox.com/member/archive/247/=now
Modify Your Subscription: https://www.listbox.com/member/?member_id=26461375
Unsubscribe Now: https://www.listbox.com/unsubscribe/?member_id=26461375&id_secret=26461375-c2b8a462&post_id=20180610063535:001B7236-6C9A-11E8-93A3-DE2166AA6E30
Powered by Listbox: http://www.listbox.com