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Re: What do we mean when we say "competition?"
- From: Matthew Crocker
- Date: Tue Nov 15 11:49:32 2005
Low prices of the monopoly is driving out viable competition. Once
competition is gone the prices WILL be raised.
That is the exact problem with a [mon|du]opoly. The
the price so low (because they own the network) that
it drives out an
So you're complaining that the problem with lack of
competition is that the prices are too LOW? As a
consumer, I'm thrilled with low price, and would only
change providers for a well-defined benefit or a lower
Competition brings innovation of products and services, not just
Yes Verizon/SBC are building FTTH in limited areas. They are doing
it with profit from their government granted monopolies and with FCC
assurances that they will be able to maintain the monopoly on new
fiber builds. So, in a sense the government is chartering a FTTH
build. They just are doing it in such a way as to kill competition
and eventually hurt the nations economic development. Short term it
is a good thing, long term it is economic suicide.
So should the government charter such a build? My
understanding is that Verizon and SBC (maybe others,
but I don't know about them) are currently working on
doing a FTTH build at this time.
Yes, and I have there are 4 muni fiber builds around me of which I
am building a PON deployment over 2 of them. I am a *little* service
provider, couple hundred megs of bandwidth, couple million $/year
in revenue. I just picked up/installed my phone switch so now I can
offer voice/data over the PON. So, in my small market (Western MA) I
can provide a competitive service to Verizon/Comcast in certain muni-
built fiber networks. I'm also a CLEC building out COs to provide
ADSL2+, g.SHDSL service in areas (new products/services). It is slow
going because of limited budgets but I'm having a hell of a lot of
fun while doing it :)
they're private companies doing it, they'd like to be
able to be the ones that obtain the primary benefit.
Do you think that a municipal build/new monopoly build
as you describe would be cheaper or better than what
SBC or Verizon are doing? If so, you should be able
to convince some cities of the math.
Oh, you can bet that pricing will be raised. As a monopoly you use
your monopoly advantage to squash the competition. You do this by
driving the price down. Once the competition is cleared from the
market you are free to raise pricing at will. The only thing that is
saving us at this point is 'The Act' which is systematically getting
dismantled by the RBOCs. My only hope is Congress grows a pair and
comes out with a sane telecom act in 2006.
Again, because of the monopoly held by the
incumbents keeping the
price low enough that you can't afford to build your
This is such an astounding comment that it needed to
be singled out: most of the complaints about
monopolies are that they artifically RAISE prices.
The spirit of The Act maybe but not the implementation. Congress had
a good idea, they just left that damn word in there (i.e.
'impairment') which is what all of the fighting has been about. As a
CLEC I am no longer impaired when I don't have access to Verizon dark
fiber. So now I have to build my own which required HUGE capital,
taller telephone poles, uglier streets.... it is impractical to
have >1 fiber networks in the markets that I serve (rural, suburban).
Aren't you pretty much describing the '96 telecom act?
The result has been the glut of inter-city fiber, and
a dearth of advanced access services at the
rural/suburban edge. Saying "we don't need
competition in infrastructure, only in bandwidth"
ignores the fact that infrastructure upgrades are
required to support increased bandwidth. In addition,
why treat L0/1 infrastructure in a different way than
Possibly, but we may never know what new services an ISP can
innovate if they don't exist anymore. Admittedly I'm biased and as an
ISP express the view from my edge of the world. I think my view is
sane but I'm sure there are others that think it is not.
Preservation is an important human characteristic. I have 40ish
employees that I would like to keep employed.
This IS the market at work. If you want it to be
different, what you want is more, not less
That may or may not be a good thing, but let's
be very clear about it.
More regulation of the physical infrastructure (the
and less regulation of the bits to foster
competitive solutions and
bring along new innovations. The future
innovations are not going
to revolve around new types of fiber. They will
revolve around what
can be done with high bandwidth to everyone.
First, I wouldn't be so sure to rule out new
improvements in fiber or other physical transmission
media as important - as an example, I think the
widespread adoption of 802.11 has been part of a huge
shift in the way people use the Internet. That said,
I agree that the biggest innovations are likely to be
applications, not media.
So let me take the devil's advocate position: why
should prices be raised so that multiple ISPs can get
a layer-2/3 connection to customers without having
their own layer-1 infrastructure? Is there some
service which is provided which wouldn't be
cheaper/simpler to mandate that the incumbent provide?
The content providers and innovators you mention
should be able to work with the customers of any ISP,
Don't kid yourself, prices will be raised once competition is driven
from the market. I'd rather pay a little more now for long term
Absolutely. The RBOCs are great at rubber stamping service. Any
color you want so long as it is black. Smaller ISPs are better
suited to provide unique,individual services. For example, we
provide a small, private DSL network to a local health organization.
Bundle that network with some colo space and we shaved 80% off their
telecom budget. It is only 19 offices but it did keep more money
available so they can do what they do best. They also have a better
network, better workflow, better productivity because of it. An RBOC
would never be able to engineer/maintain something as unique as what
we did. As a small provider I have a lot of time/energy invested in
providing a perfect fit solution to my customers needs. As an RBOC I
would change my customers needs to fit my perfect mass-produced
I guess what I'm saying is that "competition" is a
virtue only when it leads to either improved or
cheaper service. Do you think that there are
improvements to service that alternative providers
could make which justify the cost of the regulation
Matthew S. Crocker
Crocker Communications, Inc.
PO BOX 710
Greenfield, MA 01302-0710