DSL Prime: Powell's Last Slap at Competition

Customers suffered a regulatory setback last Friday in one of the last actions of the departing FCC chairman. Meanwhile, customer advocates in the U.S. complain we're falling behind.

by Dave Burstein of DSL Prime and Future of TV [April 1, 2005]

Powell's Last Slap at VoIP: Killing "N_k_d DSL"
Can't bury the story, even on Friday afternoon
"Consumers ... suffered a regulatory setback Friday," Jon Van writes in the Chicago Tribune. "FCC Favors Bells in DSL Vote" is the headline in Yuki Noguchi's WP story. Ben Charny caught Ivan Seidenberg talking like a monopolist, "That's the way we provide service." Remarkable coverage for a story which broke late on Friday before Easter, a traditional way to assure reporters don't notice a story.

But this one was too egregious to effectively bury. Requiring DSL users to buy $20 of local service from the bell is the kind of abusive tying antitrust law should prohibit. Copps and Adelstein (yet again) honorably dissented about "another ominous precedent for consumers. If it is permissible to deny consumers DSL if they do not also order analog voice service, what stops a carrier from denying broadband service to an end-user who has cut the cord and uses only a wireless phone? What prevents a carrier from refusing to provide DSL service to a savvy consumer who wants stand-alone broadband only for VoIP?"

"You don't have Mike Powell to kick around any more," the ex-Chairman may be thinking at the Aspen Institute. Those writing history books, however, should use this as the perfect example of the conflict between Powell's asserted goals and his actions. He won great ovations at VON conferences as a defender of VoIP, claiming great victory for preventing some state rules that effectively raised the cost a few dollars. But he didn't have the spine to stand up to the Bells on this much bigger "tax on the internet," about $20/month in unneeded local service.

Jeff Carlisle, Powell's friendly and intelligent head of the Wireline Bureau, has also resigned. His office was presumably responsible for the suggestion in the ruling this is one of the "instances where the Commission found the costs of unbundling, including disincentives for innovative deployment, outweighed the benefits." That's typical beltway blindness, accepting the propaganda that says that if you "give the Bells a monopoly and higher profits, and they will invest more."

Kevin Martin can read financial statements, which prove SBC and BellSouth investment is down 40 to 60 percent despite years of rulings they claimed would be their "incentives."

Naked DSL, or similar simple IP connectivity with fiber, cable, or without wires, is the smartest, most open product to offer. Consumers can then add voice, "internet", video (if the speed is sufficient) and every other "application" imagined or to come. Offering everyone "connectivity" (Bob Frankston's term) is far more likely to spur innovation and great service. So requiring "naked DSL" was the obvious progressive move, and it's a pity three commissioners were persuaded by fearful Bells to back off. The municipal movement is so important because too many telcos and cablecos are getting in the way of the technology ready to do great things today, but restructuring to munis will be a long hard slog. Personally, I'd much prefer if the existing companies were persuaded to do the right thing, rather than be replaced and bankrupted.

The FCC should be responsible for results, not rhetoric. I've been writing lately about how cable at very modest incremental investment can go over 100 Mbps to nearly every home, and DSL (at slightly greater cost, but not unreasonable) can go to 50 Mbps symmetric. Others like Dewayne Hendricks point the way to get there wirelessly, and Paul Morris and Utopia are building fiber.

The geeks can argue which is the "best" tech; the FCC's job should be to make sure at least one of the choices rapidly gets to almost every American home. China has installed over five million lines of fiber to the prem in two years; the U.S. shouldn't be falling behind.

DSL Reports on how to treat customers right
It's just good business
Justin Beech, Karl Bode, and the others at DSL Reports are closer to consumers than any telco marketeer. Everyone running networks needs to follow their series on "top 10 problems that beset the US broadband industry":

6) Stop trying to kill the messengers

7) Treat technical support more seriously

8) Improved plans are not just for new customers

9) Stop hiding additional fees

10) Get out of the slow lane!

Copyright 2005 Dave Burstein.
The DSL Prime Newsletter is reprinted with permission.

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