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The fact is, the consumer is going to pay for these networks one way or another. The best way to pay for them is to fashion the existing government regulation (and there is plenty of it, or the telcos and cable companies wouldn't be the powerhouses they are) to bring real competition to the last mile.

The telcos and cable companies could have been the information providers that the googles and the yahoos have become. They just weren't any good at operating in a competitive environment. That's why AT&T, which said it was going to continue to be a powerhouse after divestiture, wound up selling itself off in bits and pieces until the brand finally was sold to a coalition of its former owned regional operating companies.

This isn't about big bad Micro$oft getting a free ride, its about the telcos failing at anything but monopolistic anti-competitive practices and then papering Washington with money to keep the "fix" in.

The Bells promised us a fast internet in exchange for massive deregulation. Instead, they gave us DSL and used their deregulation money to game the system to get rid of their competitors. They should have been laying fiber. Since they didn't, let's put back some of the regulation in a way that we foster some competition. Maybe then we'll get some high spped connections at reasonable prices.

Thanks for the post. I don't think it is fair to lay all of this on the consumer's shoulders and neither should you.

Regarding your second paragraph, that's not a very accurate view. AT&T was competitive, remember when telco rates went down? That doesn't happen any more. The selling off in piece meal was a terrible strategy brought on by Armstrong (internally called Project Grand Slam) who only cared about what the street told him to do (ex- Jack Grubman). Could anyone looking back at that think that selling off AT&T's Wireless business was a good strategy. I was there at AT&T when it happened - it was bad then and still is a bad now. Also, Armstrong bought high and sold low on cable, not exactly a good strategy for any "investor". That's what killed the old AT&T.

Why can't it be about the big bad Microsofts trying to get a cheaper ride? They have people in Washington and want to make money too. Aren't they ALL in to make money?

You are correct that they Bells are masters around manipulating regulations and it pains me to this day to see that SBC bought out Old and Better AT&T due to unfulfilled promises.

The problem with the argument of more regulation is that it curbs a free market society and I believe that the consumer will only end up paying more for DSL and broadband not less. You don't really think that the new AT&T is going to eat the cost? You and I, in a more regulated world, will pay more and not less for access and my bills are high enough.

Seriously, thanks for the post. I did enjoy reading it. Thanks for having a conversation with me.

PardonMyFrench,

Eric

I don't remember telco rates ever going down. I do remember a whole lot of cost shifting and fees imposed by the RBOCs screaming bloody murder that now that they no longer had their long distance cash cow they needed additional sources of revenue, and they double-dipped from the consumer through an FCC imposed access fee, and from the interexchange carriers in a per-call fee when the IXCs dumped them calls.

Here they are trying the same thing again, and maybe they'll hoodwink the legislators and regulators again. Each time, though, more of us see it and at least point it out.

As far as the only problem with it being about Micro$oft trying to get a cheaper ride, is because its not true. I'm no fan of Micro$oft, in some ways they're as bad as the telcos.

But they're paying for their connectivity just like everybody else, in fact in some ways they're paying more because when you put in a DS1 or DS3, the provider pretty much figures you're going to use that bandwidth and there had better not be any bottlenecks up the pipe or you'll scream you're not getting your money's worth.

On cable, there's a pretty good chance you won't get max throughput at peak times because the technology doesn't allow it. Everybody is on one big subnet with one gateway. DSL is often oversubscribed, and that's why the telcos are moaning. They've sold something they basically don't have. And now they want the people that are providing the content that in practice will reveal their lack of capacity to pay for their upgrades.

I have no trouble with a method of charging Microsoft or Google or anybody else to build the networks. But if we do that, let's get the telcos out of ownership of what we're installing. They had their chance, they told us all the stuff they were going to do to build this highway if we'd just deregulate them.

We did. They didn't.

Yes, you are correct RBOC rates never went down. I was referring to wireless and LD rates where there is/was competition. Competition/open markets are the only time we consumers see good prices. I'm still paying Embarq (ugh) for local because there is no competition (don't tell me about VOIP - the quality sucks).

You make some fair points, but I can't get past that if you as a business owner that didn't properly forecast a market trend, why shouldn't you be allowed to pass through the costs. Plus, your comment on taking back the business of what we're installing. If your points are the RBOCs were given federal regulation to make money as a "monopoly" and then screwed up, ok fine, but how does more regulation fix that? Look I watched them claim that they were opening up their local markets to AT&T and MCI while the government allowed them into LD. What did we end up with? No local competition (until cable) and the Old and Better AT&T and MCI gobbled up by the RBOCs.

Aren't they going to pass on the costs to upgrade anyway to you and I? Maybe there is another way to make them pay that doesn't include more regulation that puts the costs on us.

Thanks again for the post.

Eric

You should be allowed to pass through the costs. But why are you allowed to pass the costs through in a way that stifles competition?

This is communication where there is a limitation on resources. We handle these things differently than pizza joints, whether it be licensing of electromagnetic spectrum or regulation of companies who hang their wires on poles and through private property by fiat, so first of all, these aren't just some "business owners," they're special to start with, and if you don't think so, go start hanging your own wires on their poles and they'll drop their free-market bullshit like a hot potato.

We need competition at the last mile, but we can't do that by passing a law that says "there will be competition," so we have to make sure that these duopolists treat everybody equally by passing that law until we can get what we really want.

Government regulation is the way they got to where they are, so this doesn't represent a major change. The two biggest megatelcos agreed to net neutrality in exchange for eating other companies, so net neutrality doesn't represent a change per se, just a change in how its mandated.

If these companies pass their costs on to the big information providers through the "Tony Soprano Business Model," there will be no impetus for other companies to go through the complicated process to become public utilities and lay the competing pathways into the home that the Bells promised.

I don't think this failure is not "properly forcasting a market trend," I think its a coordinately set of blatant lies from the telcos to get deregulation, which have now been revealed because we've passed the dates they claimed we'd have high speed internet and we don't. Meanwhile the world is passing us by.

Now here they come again with the same old bullshit. This time we need a different solution, and it starts with forcing them to charge in a direct manner so that there is some free market pressure to bring about competition, or to use eminent domain to take over their aging failing infrastructure that passes over our public areas, and do the upgrades in the public sector. We do it with highways and dams and traffic and streetlights. Isn't the information superhighway at least as important?

Ok - so what you would want to see then is open competition for the last mile to the house that we were promised years ago. I agree 100% with you and with that competition pricing structures would then be in an open market. That's what I want and my bet is a version of that will be easier on my wallet.

So, the rallying cry should not be "keep the internet free" but "open up the last mile to the home". It should be about giving new companies the ability to get into the US homes with better and higher speed connections then suffer with what's being fed to us today. So my question back is, why isn't this the rallying cry rather then curbing creativity and stomping out the little guy?

PardonMyFrench,

Eric

Because, as usual, the telcos and cable companies are gaming the system. Competition at the last mile should be the rallying cry, and I hope if we can keep this issue in front of the American people, it will become just that.

Perhaps I am just overly cynical, but the attempt to ditch net neutrality by letting it expire in absentia, and then surcharging the major content providers, is designed to thwart that and forestall the inevitable demise of the legacy providers.

I believe that the duopoly owners thought they'd get this through quietly, lost in the background clutter. Their mistake was that the telco analysts asked the question, "How are you going to continue to increase your profits when the ubiquity of TCP/IP is cutting into your PSTN business." They answered honestly, and now their spin doctors are working 24/7 to deflect their honest answer.

This is a case of the free market actually working to at least clue us to what is going to happen. If we fail to act appropriately, we deserve the hobbled Internet that we'll get.

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