ISP's In Uproar Over Verizon-MCI Merger

Mailman List Mirror (Read Only)
1

Dan Neel writes in CRN.com:

[snip]

The California ISP Association (CISPA) claims the merger of Verizon Communications and MCI will threaten ISP business models.

CISPA represents more than 180 ISPs. Mike Jackman, executive director of the Sacramento, Calif.-based organization, said the multibillion-dollar Verizon-MCI merger, announced in February, will run many pure-play ISPs out of business or force them to diversify their offerings--possibly into more value-added services that could compete with those provided by VARs and system integrators.

Verizon and MCI expect to close their merger by the end of the year. Another blockbuster telecommunications merger--between SBC Communications and AT&T--also is slated to close by the end of this year or in early 2006.

Spurring the CISPA complaint is an Aug. 5 Federal Communications Commission decision to reclassify DSL service as an information service instead of a telecom service, which Jackman said frees phone companies like Verizon from regulations requiring them to share bandwidth with ISPs. The FCC has placed a one-year grace period on enforcement of the change, he added.

[snip]

http://www.crn.com/sections/breakingnews/breakingnews.jhtml;jsessionid=P4TBQHJM0MMKYQSNDBESKHA?articleId=169600170

Sorry for the long URL.

- ferg

2

I think that big carriers have successfully convinced regulators that
the telecom deregulation in late nineties was bad for the industry. It
certainly destroyed quite a few big companies, e.g. MCI and AT&T. Also
it dragged down a few big companies, e.g. Verizon has $40B debt. In
the meantime, US is trailing other industrial countries in broadband
penetration because no carrier is interested in investing and building
an infrastructure to be shared by their competitors. The only way they
argue to get the industry out is to have a few large companies with
little competition.

True or not, FCC is listening to them.

3

Richard Z <rzheng@gmail.com>

I think that big carriers have successfully convinced regulators that
the telecom deregulation in late nineties was bad for the industry.

does not take much convincing in dc that what is good for big business
is good for america these days.

It certainly destroyed quite a few big companies, e.g. MCI and AT&T.

no. they did brilliant jobs of destroying themselves, in two very
different ways.

randy

4

US is trailing other industrial countries in broadband penetration

I'm not sure that's the case, AFAIK the US holds its own.

because no carrier is interested in investing and building
an infrastructure to be shared by their competitors. The only way they
argue to get the industry out is to have a few large companies with
little competition.

So I guess the choice is between lots of broadband against monopoly prices or less broadband at lower prices?

Now I didn't take all that much economy in school, but something there doesn't sound right...

5

Economics don't result in a good solution, no.

I'm not opposed to local telco and cable companies being the only players, IFF there's a "must serve" rule, same as there is for local telco service. There are lots of towns that have no broadband, and no chance of ever getting it unless there's a "must serve" rule like there was for rural telephone service.

So, if we're going to put Ma-bell back together, then let's do it right and make last-mile broadband a required service just like the telcos have to provide dialtone.

Or, let's stop the farce and recognize we're living in the United Corporations of America.

(exits soapbox, slaps self for off topic rant)

6

-----BEGIN PGP SIGNED MESSAGE-----
Hash: SHA1

Yo Iljitsch!

So I guess the choice is between lots of broadband against monopoly prices or
less broadband at lower prices?

You forget the third choice the AT&T taught us so well before the big
breakup:

  Less broadband at higher prices.

Just look at how hard it has been to get Qwest to fulfill their promises
of more broadband outside of the cities in return for less state control
over prices.

RGDS
GARY
- ---------------------------------------------------------------------------
Gary E. Miller Rellim 20340 Empire Blvd, Suite E-3, Bend, OR 97701
  gem@rellim.com Tel:+1(541)382-8588 Fax: +1(541)382-8676

7

US is trailing other industrial countries in broadband penetration

I'm not sure that's the case, AFAIK the US holds its own.

Graph at the bottom of the article.

http://www.mbc-thebridge.com/viewbridge.cfm?instance_id=304

8

No, the one you want is around the middle. US looks like just under 13% at #12, while 2-3 are around the 18% mark and 17-20 at around 8%. So this looks like a nice comfortable spot right in the middle. It's remarkable that US DSL penetration is unusually low, there is only one other country where this is below 5%, while many countries have very little cable.

9

Apologies for this possibly off topic post, but it does touch on the future speeds and feeds of networks. What follows is my opinion, not employer's, etc, etc, etc.

does not take much convincing in dc that what is good for big business
is good for america these days.

True. We've been through this in Texas recently. During our regular legislative session, we successfully fought and killed a bill that would have done much harm to local ISPs, regional WISPs operating in partnership with a city, and POTS consumers. Problem is that the cablecos and telcos came back with a somewhat under the table push during a special session that was supposed to be devoted to school funding only and passed a modified (read--written to benefit both cablecos and telcos, instead of just telcos) bill. There's lots of information from the opposition side at http://www.savemuniwireless.org/

For those outside the state or the US, Texas has some very odd political traditions and laws that are beyond explanation in email.

I'm not sure that's the case, AFAIK the US holds its own.

The US ranks somewhere around 10th to 14th, depending on the survey. Yes, part of that is dues to our wide open spaces. I agree that it's much more difficult and expensive to deploy broadband in US-style suburbs vs. high density apartments. But there's also a speed gap.

I'm not opposed to local telco and cable companies being the only players, IFF there's a "must serve" rule, same as there is for local telco service. There are lots of towns that have no broadband, and no chance of ever getting it unless there's a "must serve" rule like there was for rural telephone service.

So, if we're going to put Ma-bell back together, then let's do it right and make last-mile broadband a required service just like the telcos have to provide dialtone.

If we follow this course in the US, we'll be stuck with the minimum speed that can be defined as broadband. A while back, I think that was 128Kbits/sec as defined by the FCC.

In the meantime, Japan, Korea, and the rest of the world are deploying cheap, fast services. Yahoo BB offers 100Mbit/sec residential service. Anyone in the US want to step up to that for $40/month? Oh, and you get VoIP too. 1 gig service coming Real Soon Now!
http://www.businessweek.com/magazine/content/05_26/b3939087.htm

Yes, this will make a difference. Say what you like about the dot com days, but it did change the world. Many of the companies that a good chunk of people on this list work for were started in dorm rooms with really fast always on connections. If we spread the college dorm's ResNet across the globe, how will the world look in five more years?

10

And what does every country ahead of the US have in common? Tiny populations.

And waht does every country but one have in common? Very small area. The US has states taht are larger than 10 of the 11 countries ahed of use, COMBINED.

COuld it be better? Yep, sure could. But keep in mind the Cable/Satellite penetration rate is only about 80%, and that's been around 30 years.

The other thing that is not on that chart is the SPEED of the broadband. On that score, South Korea has thoroughly kicked our behinds.

11

(populations; population densities in people per square km, pasted from <http://en.wikipedia.org/wiki/List_of_countries_by_population_density>)

   South Korea 48M; 491
   Netherlands 16M; 395
   Denmark 5M; 126
   Iceland 0.3M; 2
   Canada 33M; 3
   Switzerland 7M; 181
   Belgium 10M; 339
   Japan 128M; 337
   Finland 5M; 15
   Norway 5M; 14
   Sweden 9M; 20
   United States 296M; 30

So, of the 11 countries that the OECD thinks have greater broadband penetration than the USA, 6 are more densely-populated than the USA and 5 are not.

Not that this necessarily means anything, but I thought your sentiments above could do with some numbers. I don't see a strong correlation between broadband penetration and population density here.

Joe

12

I wonder how they figure population density... Is it just a matter of
land area divided by the number of residents, or something more complex.
I think that it would need to be much more complex than that for a country
that has such diversity as the US or Canada. Smaller countries, such as
European coundties, or Japan may be able to get by with straight averages,
but I still think that it would be better.

And what about penetration? Is this a matter of homes passed, or actual
subscribers? Perhaps it would be a better measure to percentage of homes
that are capible of having broadband access.

-Sean

13

I once spoke to a construction manager at comcast for their
network buildouts. With my local township, they need to have 20 homes
per linear mile along the route to justify a build. While my street
has 11 homes, and 3 adjacent (where my private road meets the main road)
there are an insufficent number of homes along the route to reach here.

  They also won't go more than 150' out of the way/on your
property due to concern about signal loss.

  Something that is helping these network builds is that some people
are now refusing to buy from builders if there is no broadband at their
homes, so the builders are approaching the cable companies (and possibly
the telephone company too) for network expansion.

  I've considered running my own conduit/fiber loop on the street with
my other neighbors and providing that as a carrot to lower the cost for
their network builds. I've been meaning to call the construction manager
back and ask if this would get them to reconsider as well as a few of
the nearby projects that will likely bring their plant slightly closer to
me.

  - jared

14

And what does every country ahead of the US have in common? Tiny
populations.

And waht does every country but one have in common? Very small
area. The US has states taht are larger than 10 of the 11
countries ahed of use, COMBINED.

(populations; population densities in people per square km, pasted
from <http://en.wikipedia.org/wiki/
List_of_countries_by_population_density>)

   South Korea 48M; 491
   Netherlands 16M; 395
   Denmark 5M; 126
   Iceland 0.3M; 2
   Canada 33M; 3
   Switzerland 7M; 181
   Belgium 10M; 339
   Japan 128M; 337
   Finland 5M; 15
   Norway 5M; 14
   Sweden 9M; 20
   United States 296M; 30

So, of the 11 countries that the OECD thinks have greater broadband
penetration than the USA, 6 are more densely-populated than the USA
and 5 are not.

Joe,

I suggest you take another look at these numbers. Those countries with
overall population densities lower than the US's all have something in
common - they are really cold. Iceland, Canada, Finland, Norway, Sweden.
Folks in those countries are densely packed into relatively small regions of
their overall land area (near oceans or in cities). Sure, some folks live
out in Nunavut, but a relatively small number. Contrast that with the US
where the population is far more spread out.

This is an issue of both distribution and density, not just density.

15

It's an issue of far more than either of those, and that is my point.

By way of example, New Zealand has a population density of 15 people per square km, vs. 30 for the US. It's a much smaller country by size. The population is much smaller. The population is also sufficiently centralised around few major urban centres that you can reach almost a third of the whole country's population if you decide to serve just Auckland.

The US is number 11 on the OECD list, with 13 broadband subscribers per 100 people. New Zealand is number 22 with 4.7.

If it was just down to population distribution and population density, New Zealand would be awash with broadband Internet. It isn't. (New Zealand provides a useful model of what happens when you privatise the incumbent telco and provide almost no regulatory assistance to competitors at all.)

While it certainly doesn't hurt to have highly concentrated, urban population centres when you want to build an access network, there are many more differences between the different economies on the OECD list than just geography.

Joe

16

Not that this necessarily means anything, but I thought your
sentiments above could do with some numbers.

prejudices and sentiments are immune to numbers

randy

17

  I once spoke to a construction manager at comcast for their
network buildouts. With my local township, they need to have 20 homes
per linear mile along the route to justify a build. While my street
has 11 homes, and 3 adjacent (where my private road meets the main road)
there are an insufficent number of homes along the route to reach here.

Given it is Comcast, it appears that they are not interested. I know that
some companies will do it if you pay for part of the construction. Of
course, if it is just you, you probably would not want to foot the bill.
Now, if the neighbors all pitched in, it would be more affordable.

And don't even get me started about "homes passed" and "subscriber uptake"
rates. Given that most companies really have no idea where their plant
is, or the actual number of homes passed, it's all a number's shell game.

  They also won't go more than 150' out of the way/on your
property due to concern about signal loss.

What they say, anyways. I'm not into plant construction, so I can not say
for certain what the signal loss is over 150 foot. I would guess that it
is more of an excuse, rather than an explanation. Also, the local markets
are on the hook for P&L (generally speaking), so they would not want to
build something that would not have immediate payback.

I've considered running my own conduit/fiber loop on the street with my
other neighbors and providing that as a carrot to lower the cost for
their network builds. I've been meaning to call the construction
manager back and ask if this would get them to reconsider as well as a
few of the nearby projects that will likely bring their plant slightly
closer to me.

What was the distance? I am thinking that they probably would want to
avoid using your fiber/conduit. Probably the only way to get them to
reconsider is cold, hard cash.

A sales guy of mine has been quoted a dollar amount to build to his
property, along with the 4-5 neighbors. But, I think he might be able to
get it built for free now, after waiting for 3 years. We'll see what
happens.

I really imagine that the "broadband penetration" publications are, like
most things, manipulated to prove your point, whatever that might be.

-Sean

18

I suggest you take another look at these numbers. Those countries with
overall population densities lower than the US's all have something in
common - they are really cold. Iceland, Canada, Finland, Norway, Sweden.
Folks in those countries are densely packed into relatively small regions of
their overall land area (near oceans or in cities). Sure, some folks live
out in Nunavut, but a relatively small number. Contrast that with the US
where the population is far more spread out.

This is an issue of both distribution and density, not just density.

So you're saying the US is screwed because of unique geography? Or is that something poltical will can overcome?

19

Turns out that the US has a cable penetration of some 67%. (http://www.ncta.com/Docs/PageContent.cfm?pageID=86) That's pretty high, if you consider that coax can't carry a signal very far.

But I still attribute the non-stellar uptake of broadband to lack of DSL in the US. A significant portion of that 33% that doesn't have cable (and can't get it) should be within range for ADSL. On the other hand you still see above-ground phone lines in US cities, maybe that's not so good for DSL...

And in the future we'll see more wireless broadband.

20

Simple economics, most of the countries above the US it is simply a lot
cheaper and easier to provide broadband options to the majority of the
population.

South Korea demonstrates political will can overcome most objections.

But I wouldn't think broadband coverage is a political priority. Besides
satellite coverage is available to those who think it is worth the money,
which I'd have thought was more in keeping with the American way, buy it if
you want it, don't expect the government to subsidise it (Perhaps a gross
simplification of the American way, but this is nanog, not
alt.politics.mumble).