On Wed, 24 Oct 2007, Rod Beck wrote:
> On Wednesday 24 October 2007 05:36, Henry Yen wrote:
>> On Tue, Oct 23, 2007 at 09:20:49AM -0400, Leo
Bicknell wrote:
>>> Why are no major us builders installing FTTH
today? Greenfield should
>>> be the easiest, and major builders like Pulte,
Centex and the like
>>> should be eager to offer it; but don't.
>>
>> Well, Verizon seems to be making heavy bets on
replacing significant
>> chunks of old copper plant with FTTH. Here's a
recent FiOS announcement:
>>
>> Linkname: Verizon discovers symmetry, offers
20/20 symmetrical FiOS
>> service URL:
>> http://arstechnica.com/news.ars/post/
20071023-verizon-discovers-symmetry-of
>> fers-2020-symmetrical-fios-service.html
>
> While probably more "good" than
"bad", it is my understanding that when
> Verizon (and others) provide FTTH (fiber to the home)
they "cut" or
> physically disconnect all other connections to that
residence..... so much
> for any "choice"...
>
> Exactly. And because they installed fiber, the FCC has
ruled that they
> do not have to provide unbundled network elements to
competitors.
It's this last bit that seems to be leading to lots of
complaints, and
it's the earlier pricing of "unbundled network
elements" at or above the
cost of complete service packages that many CLECs and
competitive ISPs
blamed for their demise. Some like to see big conspiracies
here, but I'm
not convinced that it wasn't just a matter of bad planning
on the parts of
the ISPs and CLECs, perhaps brought on by bad incentives in
the law.
The US government decided there should be a competitive
market for phone
services. They were concerned about the big advantage in
already built
out infrastructure the incumbent phone companies had --
infrastructure
that had been built with money from their monopolies -- so
they required
them to "share." This meant it was pretty easy to
start a DSL company
that used the ILEC's copper, but seemed to provide little
incentive for
new telecom companies to build their own last mile
infrastructure. Once
the ILECs caught on to the importance of this new Internet
thing, that
meant the ISPs and the new phone companies were entirely
dependent on
their biggest competitor for services they needed to keep
functioning.
The new providers were vulnerable on all sorts of fronts
controlled by
their established competitors -- pricing, installation
procedures, service
quality, repair times, service availability, etc. The
failure of the new
entrants seems almost inevitable, and given that they hadn't
actually
built any infrastructure, they didn't leave behind much of
anything for
those with better plans to buy out of bankruptcy.
I don't think this was what was intended. My impression is
that the
wholesale copper was supposed to be a temporary bridge to
allow the new
entrants time to build infrastructure of their own. That's
why the rules
about sharing didn't apply to infrastructure built by the
ILECs later.
But new entrants building their own infrastructure generally
didn't
happen. Instead, the end-user ISP operators I was dealing
with at the
time generally seemed outraged that the evil phone
companies, which should
have been there to sell wholesale services to them, were
instead competing
in their markets. Unfortunately for them, the phone
companies not only
undercut them on cost, but generally built better networks.
Given the
impending obsolescence of the phone companies' traditional
businesses, what
else would the phone companies have been expected to do?
The exception to this was the cable companies. They already
had some
physical plant of their own, but they invested a lot of
money in a lot of
new construction. Many of them didn't do financially well
on the deals,
but even those who ran out of money left behind
infrastructure that is now
effectively competing.
This isn't to say the original encouragement of CLECs using
ILEC copper in
the 1996 telecommunications act wasn't without benefits. I
rather doubt
the ILECs would have gotten as interested in DSL as they
did, if there
hadn't been the threat of losing the business to
competition. But given
that improvements in speed since the initial crushing of the
upstarts have
been mostly limited to trying to match the capabilities of
the cable
companies, perhaps it wasn't the best strategy for the long
term. If
those who want to compete need to build some infrastructure
of their own,
and if anybody is successful in doing so, that should have a
much bigger
impact in terms of putting long term pressure on the ILECs
to provide
better service.
-Steve
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