Legal Issues

by Mike Masnick

FCC Says No To Fiber Sharing, Yes To Powerlines

from the surprise,-surprise dept

In what's likely only to be a surprise if you haven't been paying much attention, the FCC has said that the Baby Bells don't need to share any fiber networks they build and set up broadband over powerlines as an unlicensed service. Immediately following this, SBC felt free to share that, thanks to the FCC giving in to their demands, they'll fiber up the country in half the expected amount of time. In other words, as expected, they (and Verizon) were holding their fiber hostage, until the FCC gave in to their demands. While it makes sense that they would want favorable conditions, the fact that no one else was willing to step in and supply the market suggests some form of market failure. As we've discussed, fiber is an area where it might make sense for a single network that everyone has access to, since it's a natural monopoly. Instead, we'll get buildout from a variety of players, none of whom will provide the amount of bandwidth that they really should (and easily could). As for broadband over powerlines (known as the great broadband hype/hope -- depending on your position), again this is no surprise given the way the FCC likes to dream about this other competitor to the broadband space -- despite plenty of known technical and interference problems leading to many trials ending early. Still, this means we'll be hearing much more about this offering, even if it's unlikely to matter much for your average person looking for a broadband connection. Powell talks up the importance of a "third" competitor in the broadband space, but it's amazing that he considers BPL a more likely candidate than wireless technologies.

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  • identicon
    Anonymous Coward, 14 Oct 2004 @ 2:02pm


    I am tired of people invoking natural mmonopoly theory. Maybe the reason there is a supply problem is because of franchise monopolies given out by municipalities which only allow a single company to provide power, cable or whatever to an area. Eliminate franchise monopolies by just allowing anyone to build anything underground subject to the approval of the developer or owner of the land and I guarentee you will not have any supply demand problems.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Hero, 14 Oct 2004 @ 4:04pm

    No Subject Given

    "the fact that no one else was willing to step in and supply the market suggests some form of market failure"
    The market fails because it's a rigged market. I at one time had the idea of building fiber neighborhood networks using the utilty easements in my area. I had to give it up because I found that only the existing utility, cable and telephone companies are legally allowed to use the utility easements. Anyone else would go to jail and there was basically no way to get permission. That's why the phone companies can get away with "holding their fiber hostage" without fear of competition.

    reply to this | link to this | view in chronology ]

  • identicon
    Chris Wuestefeld, 15 Oct 2004 @ 7:30am

    Market failure?

    I don't think the fiber thing can be interpreted as a market failure by any stretch of the imagination. Rather, it reveals a REGULATORY failure.

    The telcos were waiting for a market unfettered by regulatory nonsense. Once it was announced that they'd be free to do business as the market decides, without being restricted by government regulation, they found that it's worth investing in the improvements.

    When the gov't announces that something won't be restricted/required, and industry responds with huge investements, it's absurd to call that a "market failure". It's prima facie proof that government regulation has been interfering.

    reply to this | link to this | view in chronology ]

    • identicon
      Phil Wade, 15 Oct 2004 @ 12:58pm

      Re: Market failure?

      Absolutely. This is more of an indicator that an unfettered market works rather than an indicator that it doesn't work. Althought the government means well by its regulation, it's amazing what the private sector can and will do (although imperfectly) without it.

      reply to this | link to this | view in chronology ]

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