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Re: What do we mean when we say "competition?"

  • From: David Barak
  • Date: Wed Nov 16 01:05:24 2005
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>--- Owen DeLong <[email protected]> wrote:
>> --On November 15, 2005 7:25:54 AM -0800 David Barak
>> <[email protected]> 
>> wrote:
>>> --- Matthew Crocker <[email protected]> wrote:

> I think what is really represented there is that
> because
> they own an existing network that was built with
> public
> subsidy and future entrants have no such access to
> public
> subsidy to build their own network, ...

Sean's post correctly identified the problem with this
assertion, so I won't 

> The government should recognize that the existing
> build
> has actually been paid for mostly by public subsidy
> anyway
> and as such, should require the ILECs to split into
> two
> separate divisions.  

You mean the existing FIBER build was mostly paid by
public subsidy?  Do you have a reference for that?

> One division would be a
> wholesale
> only infrastructure delivery company that would
> maintain
> the physical infrastructure.  As part of this,
> ownership
> of the physical infrastructure in place would be
> transferred to an appropriate local civil body
> (city,
> county, district, etc.) and said body should have an
> initial 5 year contract with the infrastructure
> portion
> of the ILEC to provide existing services on a
> provider-
> neutral basis (same price to all ILECs, Clecs,
> etc.).
> At the end of that 5 year contract, the maintenance
> of
> the infrastructure should be up for bid, and, if the
> existing ILEC infrastructure portion can't win the
> bid,
> they are out of luck.

I don't know how familiar you are with what the
government contracting process is like, but the word
"unpleasant" comes to mind: it's long, hard, and
cumbersome.  Your model would substantially increase
the amount of government contracting required, so you
would need to be able to show a benefit to society of
corresponding magnitude.  

> Right, but, faced with potential competition, they
> are
> notorious for temporarily lowering prices well below
> sustainable levels in order to eliminate said
> competition.

Are you alleging that the ILECs/RBOCs are providing
services below cost?  If so, call a regulator.  If
not, while the profits may be lower than desired by
the ILEC/RBOC, it's certainlly "sustainable"

> The '96 telecom act did nothing to take the
> last
> mile infrastructure out of the hands of the existing

You are correct.  However, the '96 telecom act did
give lots of other companies the OPPORTUNITY to build
their own last mile access.  Your proposal actually
drives toward a more monopolistic, regulated

> However, for any given last-mile buildout, the
> people should retain title to the infrastructure(s)
> and management should be by a carrier-neutral party
> under contract to the people.  (yes, practically
> speaking, s/people/government/, but, I use the
> term people to remind us that the government is
> supposed to be acting as our proxy for such things).
> If a company wants to deploy new infrastructure,
> should have equal access to right-of-way to deploy
> However, such access should include a mechanism for
> transfer of ownership (with appropriate
> of said infrastructure to the people for carrier
> neutrality after some fixed period of time at
> the option of the people.

So Verizon should be prohibited from building out
FTTH?  I assume that your approach of "the Government
owns all layer 1" would also include 802.11, GSM,
CDMA, and all other network types, right?  If not, why

> Now, the ILEC can continue to provide
> service at the same price, but, they no longer have
> a cost-basis advantage or the ability to delay,
> defer, interfere with CLEC installs on the same
> infrastructure.

Any interference is currently unlawful, and all of the
companies regulated under sections 271 and 272 have
extensive procedures in place to prevent it.  If
you've got specific complaints about a specific
company, you should be talking to a regulator.

So, to summarize - far less than "all" of the
ILEC/RBOC infrastructure was "paid for with public
funds." (as opposed to user fees), you'd argue for far
greater government participation in the marketplace,
and the removal of any competition for layer 0/1
services, in favor of competition at layers 2 and
higher.  Why is that good again?

David Barak
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