NEWS: US Regulator signals end of independent ISPs

Discussion in 'NZ Computing' started by Bling-Bling, Aug 6, 2005.

  1. Bling-Bling

    Bling-Bling Guest

    Bling-Bling, Aug 6, 2005
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  2. Mutley

    Mutley Guest

    Bling-Bling <> wrote:

    >US Regulator signals end of independent ISPs
    >Bling Bling

    Guess the US telcos are good Republican donors..

    Telecom NZ will no doubt take heart from this as a good reason to
    retain their monopoly here in NZ..
    Mutley, Aug 7, 2005
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  3. steve

    steve Guest

    Bling-Bling wrote:

    > US Regulator signals end of independent ISPs
    > Bling Bling

    The story is gone now....

    I know it is annoying, but often it IS better to cut / paste the whole story
    so that it can still be read after the site has rolled the calendar and the
    link goes dead.
    steve, Aug 8, 2005
  4. Nik Coughin

    Nik Coughin Guest

    steve wrote:
    > Bling-Bling wrote:
    >> US Regulator signals end of independent ISPs
    >> Bling Bling

    > The story is gone now....
    > I know it is annoying, but often it IS better to cut / paste the
    > whole story so that it can still be read after the site has rolled
    > the calendar and the link goes dead.

    Google cache, innit great:

    FCC opens door to ISP wipe-out

    US telecoms regulator the FCC has signaled the end of the independent ISP, a
    move which will leave DSL provision concentrated in the hands of just a few
    large providers. The move, which turns local DSL provision from a regulated
    monopoly into an unregulated monopoly, also has repercussions for rural
    telephony providers, who will lose a chunk of subsidy, and has potentially
    chilling consequences for free speech.

    Unless state regulators step into the void just vacated by the Federal
    regulator, however, every independent DSL provider will find itself at the
    mercy of the Baby Bells when its contract expires - and the Baby Bells have
    no compulsion to renew those competitors' contracts.

    At the moment in the US, DSL is sold wholesale by companies owned by the
    Baby Bells, aka the "ILECs" (incumbent local exchange carriers), such as SBC
    (formerly Southwestern Bell and Pacific Bell), and Verizon (formerly Bell
    Atlantic). The ILECs are also DSL retailers, of course, in direct
    competition with independent ISPs who depend on the ILECs for service and in
    most cases, infrastructure.

    In a statement today the FCC said it was scrapping the mandatory sharing
    requirement on incumbents that "caused vendors to delay development and
    deployment of innovations to consumers." In June the Supreme Court ruled
    that cable broadband is an "information service", rather than a
    "telecommunication service". The latter is subject to the watchdog's
    oversight and public service obligations, while the former is not. Now the
    FCC is stepping away from regulating DSL with the justification that it
    needs to "level the playing field", reasoning that two mistakes cancel each
    other out.

    In a statement, the president of the California ISP Association CISPA Dane
    Jasper described it as "a re-monopolization of a network that has been
    publicly regulated and paid for by rate payers for more than 100 years."
    "This is not leveling the DSL playing field. The FCC is putting a fence
    around the playing field and giving the keys to a few phone companies with
    armies of paid lobbyists, letting the phone companies decide who can play in
    the broadband game."

    So what happens next?

    Much depends on what the ILECs - the wholesalers today - decide to do when
    the ISP contracts expire. No ISP large or small is safe, but it's hard to
    see the ILECs pulling the rug away from the larger DSL ISPs such as AOL or
    Earthlink without a fight. The largest ISPs have the legal and financial
    clout to make termination of their contracts at the very least awkward
    experience for the Baby Bells.
    The alternative for ISPs is to negotiate a deal with a CLEC, a competitive
    local exchange carrier, but in practice that means Covad. (Of the three
    national CLECs once offering national wholesale DSL, Covad survived Chapter
    11, but Northpoint and Rhythms didn't - they went bankrupt and dissolved.)
    But Covad service isn't cheap and is beyond the reach of the smaller indies.

    So ILECs are likely to target the local ISPs for termination, taking out a
    competitor and cutting their own costs as a bonus.
    In theory the FCC's ruling shouldn't matter on a regional basis, because the
    states regulate their own phone services. But in practice intensive lobbying
    has neutered the state regulators.

    For example, the California Public Utilities Commission decreed that SBC
    should not retail DSL below the price of its wholesale offerings. However,
    SBC won itself an exemption for special promotional offers, and permanently
    offers retail below wholesale prices by running non-stop, back-to-back

    Without economies of scale, and the financial muscle that buys lobbyists and
    lawyers, the outlook for small DSL ISPs looks grim.
    Nik Coughin, Aug 8, 2005
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