We Need A Broadband Competition Act, Not A Net Neutrality Act

from the get-out-the-wrecking-ball dept

Andy Kessler has put together a fantastic editorial for the Wall Street Journal explaining why Markey's attempt at legislating Net Neutrality won't do any good. As we pointed out when Markey first announced it, this plan seems to be focused on the symptoms, not the real problem (and, no, just having the FCC step in to slap the wrists of neutrality violators doesn't help either). The real problem, of course, is the lack of real competition in the broadband market. Kessler suggests that we shouldn't be focused on Net Neutrality, but should wipe out the bogus regulations that are currently restricting competition in the broadband market. That means not going through a painful localized franchising process or making it a pain to get the rights of way necessary to install equipment necessary for next generation broadband. It means actually opening up the market to competition, not creating subsidies and regulations that mean only the incumbents can play. Not that politicians are about to do anything like this, but it sure would be nice.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    Steve R. (profile), Feb 26th, 2008 @ 8:11am

    Ethical Corporations

    Competition will help. It would allow people to switch if the company doesn't provide good service.

    A residual concern, even with increased competition,-- how is the consumer to know if he or she is being screwed by the ISP????? I know that I don't have the technical expertise to make that determination. Since the anecdotal evidence is rising that corporation (such as Comcast) are doing stealth actions to manipulate the flow of packets, I am left with a feeling of mistrust. To avoid the hammer of regulation, I would hope that companies (such as Comcast) could take a more proactive ethical approach.

     

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  2.  
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    Anonymous Coward, Feb 26th, 2008 @ 8:21am

    So what gives Verizon the right to dig up my yard to put in their fiber without improving my town? That is what requiring municipal approval helps out with.

     

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    Mitch the Bitch, Feb 26th, 2008 @ 9:09am

    You mean "YOUR MOM'S" yard Coward.... I can smell a 300lb troll hiding in mommies garage a mile away.

     

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  4.  
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    Doug M, Feb 26th, 2008 @ 9:18am

    same for tv

    This is similar to the way cable companies are run. Very few companies get the right to place the necessary components to supply television to people. without innovation, we start heading to a world run by monopolies that aren't considered monopolies. and since the government makes their money this way, i don't see it changing anytime soon.

     

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  5.  
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    Anonymous Coward, Feb 26th, 2008 @ 9:18am

    Re:

    Mitch, be nice those are the people you need for your revolution.

     

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  6.  
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    Mark Murphy, Feb 26th, 2008 @ 9:25am

    Close, But No Cigar

    I agree that net neutrality will be significantly helped by more competition, though it'll take a whole lot of competition before we get out of the oligopoly state. Two competitors is not competition; 200 is. And it may take 200 in order to get one or more playing fair w/r/t net neutrality.

    That means not going through a painful localized franchising process or making it a pain to get the rights of way necessary to install equipment necessary for next generation broadband.


    If you mean that as I expect it'll be interpreted (see the Anonymous Coward's comment about digging above), then I think you're going to run into problems.

    You simply can't have dozens or hundreds of firms trying to lay fiber in a town. Even some wireless solutions can run into interference issues with everyone sharing a frequency (e.g., WiFi bad, cellular good). Both are examples of the oft-cited "tragedy of the commons".

    That being said, there may be ways to structure the competition such that the tragedy can be avoided. With respect to fiber, for example, I suspect there's a way for a town to own the fiber like it owns the water lines and sewers and whatnot. The town isn't providing the Internet connection, but it is allowing ISPs to connect to the town to provide service to whatever households sign up for them. The ISPs pay less vs. their own build-out, but they have to put up with competition. And if ISPs want their own build-out (e.g., different/better tech than what the town has), that's fine, but they have to go through the rigmarole they do today and perhaps more, to justify the hassle for the town's residents.

     

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  7.  
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    Keith, Feb 26th, 2008 @ 9:27am

    I agree with #2 : The poles in the alley are not there just for looks! They should utilize that instead of installing their stuff in people yards. If they install on private property, they ought to pay rent to the owners and if they install somewhere other than the poles, they should 'pay the town-city to make up for the ugly boxes on every other corner.

     

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  8.  
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    Ima Fish, Feb 26th, 2008 @ 9:38am

    I don't see how any objective person could be against net neutrality. the phone systems in the US have been neutral for decades without any problems. In other words, a phone company cannot discriminate as to which calls it will allow through it's network.

    The only reason large ISPs (cable and telcos) are against net neutrality is because they want to triple dip. By that I mean that the user would be charged to connect to the internet. A site like Google would have to be charged for their bandwidth. And a site like Google would be charged yet again by the individual ISPs to allow end user access. Getting rid of net neutrality would be a huge cash cow.

    While I agree that I would love to see more competition in the broadband market, that would not fix this problem. All ISPs would want to partake in that triple dipping. The fact that there are five ISPs or a million would not change that desire to triple dip.

     

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  9.  
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    4-80-sicks, Feb 26th, 2008 @ 9:38am

    Amen! When there are laws on the books solely for their own purpose it just makes a big mess that has to be corrected with more and more laws...well I guess that's what politicians want. If they don't have any new laws to make they get bored!

     

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  10.  
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    Ima Fish, Feb 26th, 2008 @ 9:46am

    Re:

    "When there are laws on the books solely for their own purpose it just makes a big mess that has to be corrected with more and more laws..."

    Then why do the neutrality laws with phones work so well? If there was no phone neutrality, you'd pay for your phone service. And when you called someone, you'd pay his carrier. And if your call passed through any third party carriers, you'd have to pay them too.

    That's what the telcos and the cable companies want to do. They want to decide who gets to go through to the end user to make everyone pay again and again. See my post above for more information.

    And your argument could be used against criminal laws too. Why pass criminal laws? Why should murder be illegal? Let the market work out who should be alive and dead. Please explain why that's wrong without dipping into some subjective morality.

     

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  11.  
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    Schizoid, Feb 26th, 2008 @ 9:47am

    Depending on the laws in your local city/state it most likely is *not your yard or part of* they would be digging up to begin with but an easement the city or state owns rights to. It may suck but that was part of what you had to accept in order to live there. In most areas the city or state will maintain rights to a small portion of the property for those very reasons. Not that I favor those rights to be abused but you must understand the legalities before you can yipe.

     

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  12.  
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    Russ, Feb 26th, 2008 @ 10:01am

    How can service providers get away with providing

    I completely agree with this post, and I assume most of the "technologically well-read" people do too. These service providers don't have to be held accountable for providing shotty or unreliable service. It's not like I can take my business elsewhere.

     

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    Anonymous Coward, Feb 26th, 2008 @ 10:03am

    Of course the city maintains rights to a small portion of your property, but if you get rid of municipal approval/regulation of fiber, Verizon would just have a right to do what they want?

     

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  14.  
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    Anonymous Coward, Feb 26th, 2008 @ 10:14am

    Re: Re:

    There is an objective morality that explains why criminal laws ought to exist -- in the simplest terms it boils down to, "society simply can't function otherwise." That being said, we shouldn't criminalize EVERYTHING, or even just everything we can or, arguably, everything we should. One ought only legislate what one must.

    Civil (versus Criminal) laws are the same; even more so because it's far less often the case that society can't function unless this or that civil offense is coded into law.

     

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  15.  
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    Anonymous Coward, Feb 26th, 2008 @ 10:17am

    Re: Ethical Corporations

    You may not personally have the technical savvy to notice when you're being ripped off, but other people do and they're sure to make a noise about it. After all, how did we find out about Comcast?

     

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  16.  
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    Alimas, Feb 26th, 2008 @ 10:29am

    Competition Isn't Enough

    The net neutrality act is more vital than additional competition (though more competition always helps).
    If I had four more Verizons or Comcasts in my area, they'd simply all agree to the a lot of the same habits in order for the better interest of them all.
    They'd all be fighting equally to throttle certain types of traffic and punish "heavy users" like myself.
    Our capitalist system isn't just a blind free-for-all. Competitors strike deals with each other all the time to control their market for the better of them all.
    And I think that's all we'd have with increased competition and no net neutrality.
    Different sign up deals, different speed promises. Standard throttling and heavy user punishment.

     

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  17.  
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    Time shitter, Feb 26th, 2008 @ 10:44am

    google take over

    Google is Taking over the world!!! dont you see that!!!! Put a stop to this by visiting www.antigoogle.com... hahaha just kidding, but really What if Google ran the US would it be better, would it be worse? all i know is that Google has accomplished so much for only staring off as a search engine, now adding to the X-prize for shooting to the moon! also a new fibreoptic cable at the bottom of the ocean... looking at a Yahoo buy out, solar panels on the roof! OMG google has become a household word, "dont know, google it" it seems that google is drabbling in everything so long as its interesting or contains electrodes and LED's, Yes we do need a new ISP maybe once google gets the 700mhz spectrum we will see a change in price of cable, maybe Google will have total wireless internet over the US for only 39.99 a month, wouldnt that be great...


    GOOGLE FOR PRESIDENT!!!!
    or congress (the senate) not the house...

     

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  18.  
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    copo, Feb 26th, 2008 @ 10:49am

    Re: Re:

    "Neutrality laws with phones work so well" - Have they really? There hasn't been any significant improvement in our phone service over the last 50 years. It's stayed the same. We're not sending anymore information through our phone lines now than we did 50 years ago.

    Phone companies have never needed to improve on their infrastructure because the service they offer hasn't changed. It works "good enough" for its purpose. You can't compare neutrality laws for phone service with that of internet service.

     

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  19.  
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    4-80-sicks, Feb 26th, 2008 @ 11:02am

    The fact that there are five ISPs or a million would not change that desire to triple dip.

    It may not change the desire, but it does change the ability. I'm going to use the ISP that doesn't triple dip. There's a lot more chance for that one (or five) to exist out of ten companies, than there is out of two.

    Then why do the neutrality laws with phones work so well?

    Are there actually laws? I don't know, but I think it's more like the market. If AT&T wants to triple dip as you're describing, I'm going to use Sprint or Qwest.

    And your argument could be used against criminal laws too. Why pass criminal laws? Why should murder be illegal? Let the market work out who should be alive and dead. Please explain why that's wrong without dipping into some subjective morality.

    What? What the hell?? I don't even know what to say. I didn't say there should be no laws. You have drawn my opinion about endless regulation of communications to a very illogical conclusion. Think about all the regulations and subsidies that allow AT&T (DSL) or Comcast (cable) to be my only choices for broadband and try to draw equivalents to criminal law. I dare you. Try to have a little rationality, please.

     

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  20.  
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    Bob, Feb 26th, 2008 @ 11:10am

    Make the Central Offices Wholesale only

    I would also liketo see legislation that takes all the Central Offices, COs, and split them off from th eparent RBOCs into seperate wholesale only providers, no retail. By doing this the gates for competition to the end users,residentail and commercial, would be wide open. Of course there would need to be some clear tariffs for the new wholesale providers so they don't drive up prices artifically. If the COs were all wholesale, there would be no problem for competing companies getting space in the CO and access to the copper and fiber going to homes and businesses. Combine this with doing away with franchises and making it easier to get access to exisiting right-of-ways, and competition would be great, and the consumer wins.

     

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  21.  
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    Evil Mike, Feb 26th, 2008 @ 11:13am

    Re: Re: Re:

    Just because you haven't seen it doesn't mean there's been no improvement in the phone systems.

    The infrastructure and underlying technology has made great strides toward various service/economic goals.

    Assumption is bad.

     

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  22.  
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    copo, Feb 26th, 2008 @ 11:23am

    Re: Re: Re: Re:

    The assumption is not bad. For an improvement mean anything to me (the consumer), I should see it! For example, how about voice quality? Phones still don't even cover the entire frequency range of what we can hear.

     

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  23.  
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    chris (profile), Feb 26th, 2008 @ 11:34am

    Re: Re: Re:

    Have they really? There hasn't been any significant improvement in our phone service over the last 50 years. It's stayed the same. We're not sending anymore information through our phone lines now than we did 50 years ago.

    i disagree. dialup internet access changed the landscape for rediential phone service forever.

    they didn't have caller ID 50 years ago. centrally stored voicemail didn't exist 50 years ago. 911 is not 50 years old. the mobile phone is not a 50 year old invention either.

    innovation is necessary even when you have a monopoly, because that is how you justify raising prices.

     

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  24.  
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    Bob, Feb 26th, 2008 @ 11:36am

    Central Offices Wholesale - Not an Assumption

    Sorry, but this is not an assumption. Where I live Verizon controls/owns all the COs. The Telecommunications Act of 1996 requires the RBOCs to allow competing companies to purchase space and access to fiber and copper going to customers. But it's a big joke. Most competitors still find it extremely difficult to get into the COs and the fines the RBOCs like Verizon have to pay are small compared to the money they would lose if they complied with the law, not to mention the fact that they have so many Congressmen and FCC people in their pockets. I live within 1/2 mile from the CO I get phone service from, Verizon is now moving on to FIOS, but I still can't get even DSL, and probably never will. Since I live in a more rural area, the density does not justify to Verizon the cost of install the needed equipment to supply DSL or FIOS, even though they get money every year from the FCC to compensate for just this type of cost, the cost of supplying services to rural areas. So my only option is comcast cable, and they know it. For just Internet access I am paying $57.95/month. Although I live in a more rural area, I'm not talking about everyone having 10 acres or more, most people have one or two acres, mixed with people who have from 10 to 20 acres. There are plently of homes to make it worth someones investment to install the equipment, but first they have to get into the COs, and Verizon makes sure that doesn't happen.

     

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  25.  
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    chris (profile), Feb 26th, 2008 @ 11:38am

    Re: Ethical Corporations

    that's an oxymoron, like "truth in advertising".

    the only ethical corporation is a non-profit corporation, and even non-profits can be pretty shady.

     

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  26.  
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    Bob, Feb 26th, 2008 @ 11:50am

    Let's give them all a big tax break

    Hey, I know, just like Bush gave all the big oil companies huge tax breaks to incentivize them to do more exploration and find new domestic sources for oil, etc, etc. Perhaps we should give all the big telecommunications companies a big tax break too, this would surely result in lower prices and improved service to the consumer right? Wrong!

    You can’t trust big corporations, trickle down does not work, never will. I’m not saying we have to punish them, just make the rules to keep them in line, they will not do it on their own. Time has proven this again and again.

    PS: I didn’t mean to get to far off the subject of this thread, but I just couldn’t help but notice the similarities. Anyway, I hope whoever gets into the white house, repeals the oil company tax cut and actually re-institutes the windfall profits tax on them.

     

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  27.  
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    chris (profile), Feb 26th, 2008 @ 12:01pm

    Re: Close, But No Cigar

    competition is great for industries that are not "natural monopolies". cable and telephone companies are natural monopolies thanks to municipal rights of way. competition in those industries will never happen. ever.

    we don't need more competition in the telephone and TV space, we need more competition in the ISP space.

    after all, if you can deliver enough bandwidth, telephone and television service are not that hard to provide over said connection.

    since the cable companies and telephone companies provide service that is famously bad, you don't have to compete on price alone, just providing a reliable product with no hidden fees is enough to make half of america switch today.

    mobile providers need to get into the residential and commercial internet access business, along with municipal programs, the power companies, satellite communications companies, and maybe even the auto industry.

    i think the water and sewer companies need to figure out how to put a signal thru water to provide broadband internet service.

    if you are in the business of putting a signal, a copper wire, or a microprocessor into a home or business, then you should expand your product offerings with internet service. the ISP market is begging for additional providers.

    the more "pipes" that are available in your neighborhood, the less likely the two or fewer providers in your neighborhood will be to play games with your service.

     

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  28.  
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    Colin, Feb 26th, 2008 @ 1:01pm

    Great article.

     

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  29.  
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    ChrisH, Feb 26th, 2008 @ 1:02pm

    Re: Re: Close, But No Cigar

    Agree with chris: There are places where the free market does not work, and this is one of those places. Sometimes the realities of the physical world get in the way of the miracles of the theory of free markets. This type of market failure is covered in econ 101.

    I'd much rather see municipalities & citizens own the fiber & get to decide the rules (net neutrality, etc) rather than some remote global corporation.

     

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  30.  
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    inc, Feb 26th, 2008 @ 2:11pm

    be glad it's just your yard. with these stupid laws they may just take your house

     

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  31.  
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    Anonymous Coward, Feb 26th, 2008 @ 2:29pm

    Re: Ethical Corporations


    A residual concern, even with increased competition,-- how is the consumer to know if he or she is being screwed by the ISP????? I know that I don't have the technical expertise to make that determination.
    Simple. What do you do when you don't have the expertise for anything else? You hire someone who does.

     

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  32.  
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    Rose M. Welch, Feb 26th, 2008 @ 2:30pm

    Why can't they...

    ...branch out and let people use thier lines, like the small telephone companies are allowed to use the lines that 'belong' to SBC-AT&T? They're already there and the smaller businesses ensure that we can choose among many providers who have varying rates and services, with SBC-AT&T being at the top of the cost pole.

    For instance, cable in my city runs along the same poles that electric does. Those poles and land belong to the City, i.e. the residents of the city. Right now, to have cable internet, I have to purchase cable television also, which is crap as it doubles my bill for something I don't want and don't use. But the only real alternative is the DSL that crappy in this town and the wireless that's even worse.

     

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  33.  
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    Anonymous Coward, Feb 26th, 2008 @ 2:32pm

    Re:

    So what gives Verizon the right to dig up my yard to put in their fiber without improving my town? That is what requiring municipal approval helps out with.

    It's called a utility easement. Check your property deed.

    And by the way, competition does help your town.

     

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  34.  
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    Anonymous Coward, Feb 26th, 2008 @ 2:41pm

    Re: Re: Re:

    "Neutrality laws with phones work so well" - Have they really? There hasn't been any significant improvement in our phone service over the last 50 years.
    So just how, even if true, would service neutrality be responsible for that?

     

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  35.  
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    Anonymous Coward, Feb 26th, 2008 @ 2:54pm

    Re:

    Of course the city maintains rights to a small portion of your property, but if you get rid of municipal approval/regulation of fiber, Verizon would just have a right to do what they want?

    No. What's being discussed is the elimination of discriminatory regulations set up to favor one company. In other words, allowing competition to use the same space as the incumbents. That does not mean letting companies "do what they want". That's a ridiculous assertion.

     

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  36.  
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    Anonymous Coward, Feb 26th, 2008 @ 3:23pm

    Re:

    Are there actually laws? I don't know, but I think it's more like the market. If AT&T wants to triple dip as you're describing, I'm going to use Sprint or Qwest.

    Yes, there are actually laws, and they empower FCC regulations. As for going to a different phone company, that's an option the vast majority don't have.

     

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  37.  
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    Clueby4, Feb 26th, 2008 @ 3:34pm

    You can't be this stupid, right?

    Either you don't understand what right of way is or you're being intentionally OBTUSE. So let's get rid of regulations saying who can tear up private/public property. Let's get rid of the FCC too, just pick a frequency.

    I love these "we just need competition" droolers. They always seem to forget one VERY IMPORTANT FACT. In order to provide these services the companies involved must use PUBLIC/PRIVATE property, be it wired or wireless.

    So, to just let the market decide is quite frankly impossible since your ALWAYS talking about PUBLIC INFRASTRUCTURE. Hence why you want regulations, part of the telecommunications act forced providers to sell their infrastructure at cost was a step in the right direction but then corruption seeped and it was "decided" cable companies were different. Guess cable companies claim the used magic tubes to send their signal.

    Until the day comes where telephone, power, cable, etc companies have to pay property owners, or in the case of wireless all those within broadcasting range of the signal for use of THEIR property/airwaves the little fairy tale that is "free market" only exist in the minds of the deluded.

     

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  38.  
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    Whitehat, Feb 27th, 2008 @ 10:17am

    Broadband Competition

    What not one of you seems to understand is that THERE ARE NO EXCLUSIVE CABLE FRANCHISES. Wire line providers all have to use the municipal right-of-way. Each local government has the obligation to make sure that anyone who wants to use the ROW is willing to compete on a level playing field and can prove that he/she has the financial resources necessary to protect the municipality and its residents from any damage or harm they may cause. Be able and willing to do so and even you can get a local cable franchise. There will NEVER be multiple direct competitors in a market. It costs too much to build plant and there aren't enough customers per mile in any area to make it financially feasible to have more than two providers in an area. Most areas can't support two wireline cable-type competitors. Many municipalities have granted multiple local cable franchises - and the 2nd company into the market couldn't make it financially. The so-called "pro-competition" (deregulation) legislation passed in some states has only strengthened the hold of the incumbent provider. In North Carolina more than 100 state franchises have been issued during the past year... ALL to the incumbent local franchise holder. NO competitors have come into the market. Most of you remind me of the fable about the blind men and the elephant. If you're not familiar with the story - look it up.

     

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  39.  
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    saveaccess, Feb 27th, 2008 @ 10:27am

    franchise clarity

    Whoa - back up a bit. Keep in mind that current local and municipal cable franchises only slightly regulate cable tv services (Right of way, PEG, red-lining, basic cable pricing) - not internet and IP telephony services which fall under other regulatory rules. These are not monopoly franchises either - any company can apply for and receive the right to offer cable services in the same municipality. The fact that few do is because that cable companies know that level of overbuilding just isn't profitable - so they choose instead to divide territories amongst themselves.

    The AT&T driven state-wide franchises passed in 19 states simply eliminate most municipal oversight and fast tracks AT&T roll-outs to the communities of their choosing. In two years of state franchises - this 'compeition' has not resulted in lower prices nor better services - anywhere.

    Finally - if you're concerned about affordable and competitive internet access - you should be looking at the FCC and the Supreme Court's 2005 "Brand X" decision. This decision effectively deregulated cable broadband internet service and as a result eliminated most small providers. If anything has impacted on the loss of real competition and the greater concentration of ownership - it was this decision.

    Unpacking the Brand X Decision
    http://www.tmcnet.com/usubmit/2005/jun/1158573.htm

    No Quarter for the Time Warner Bandwidth Rationing Plan
    http://saveaccess.org/node/2195

     

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  40.  
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    Whitehat, Feb 27th, 2008 @ 1:36pm

    Re: franchise clarity

    Only the smallest of operators offers only one of these services any more. And what little municipal oversight was provided by local franchises it at least kept the local cable oeprator from going crazy. As an ex-cable system manager; I appreciated some of the franchise requirements. The helped me get the budget to implement some of the customer service support needed to actuall keep customer happy and on the system. Operators will be looking to cost reductions (read: "less service") to improve margins. The North Carolina General Assembly didn't empower anyone to enforce even minumal customer service requirements.

     

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  41.  
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    Thor, Aug 28th, 2008 @ 4:28am

    Re: google take over

    They need better direction and purpose. I have ideas, good ones, that would very likely require a teeming up between Google and X (and maybe Y), making what they do now look secondary. Of course, Polititions are usually the biggest roadblock to problem solving. I don't think the vast majority of them even want to actually solve problems anymore. This is major problem for US.

     

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  42.  
    identicon
    ARUN, Apr 7th, 2011 @ 8:19pm

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