[February 3, 2005]

5. Networks

In order to service our DSL customers, we are required to plug into Verizon's VADS at a central LATA location that in our case is in San Angelo. We purchase bandwidth from AT&T and have it delivered to a location down the street from the central office where Verizon has its serving point. We then purchase a local loop from Verizon to reach the DSL stack.

In other words, we pay twice for the bandwidth—once to AT&T and once to Verizon. And rates are not cheap. We pay roughly $700 to AT&T for 1.5Mb and over $500 to Verizon. When I asked for a Verizon price for a partial 3Mb, it was over $2,500.00 A MONTH. So we operate with two 1.5Mb circuits and split our customer base between them.

I asked for collocation from AT&T—denied. I asked for some sort of collocation from Verizon—denied. Now I know for a fact that AT&T has direct circuits between themselves and Verizon. What I do not know is exactly how Verizon Online plugs into Verizon. But I have strong suspicions that somehow Verizon Online gets its bandwidth from Level 3 and that Level 3 has a collocation agreement given that it is the successor company to Genuity.

Getting the real facts is almost impossible. And I know of no FCC audit to determine if any given LEC is or isn't in compliance with FCC rules governing this area of concern, which is one that is clearly within the FCC ability to regulate. On the other hand, here are remarks from Russ Uhte, an Internet Servce Provider located in Indiana.

"Let me take this opportunity to vent some related frustrations... We are also in Indiana. We contacted Verizon in October of 2004 to become a DSL reseller. We wanted to start out with a full DS/3 to terminate the DSL circuits, and placed that order in October. We knew from talking to local Verizon techs that Verizon was planning on launching their own service very soon, so we wanted to be first in the market here.

So Verizon had to run fiber to our facilities, and that order was placed and expected to be done around Oct 16th. October 16th came and went without a single word. We call our rep, and our rep tells us that the ticket has been canceled by _US_. Which isn't even possible!!! Our rep tells us that they contacted us about extended charges that we'd have to pay, and we declined to pay them, so they canceled the order!!!

So the order is replaced with out any real explanation, but this time they tell us they have to do some type of report to estimate additional charges... We say, whatever, just get it done!!! In the mean time we ask our rep to get us a T-1 ordered so we can start offering something...

So we receive a call the beginning of Nov stating that our cost for the fiber build is going to be $17k... $17k for a 1 mile fiber build??? Give me a break!!! We have over 70 miles of fiber that we've build our selves, we know exactly how much it costs to run/terminate/splice fiber, and it's nothing close to that!!!

Our sales rep tells us that we can file a waiver if we would like, so we start that process... Meanwhile, our T-1 finally is installed, and we're getting ready to hook up our first test site (my house) when Verizon starts nailing the radio/tv/direct mailing with DSL Available through us now!!!

So now we're a week behind, we've already lost some of our dial-up sector to Verizon, and we call to check on our fiber build waiver, and inform our rep that this is anti-competitive behavior, and that if something isn't done quickly, we're contacting the Regulatory Commission... The next day, all of the sudden, the waiver isn't necessary, our sales rep made the $17k up-front cost go away, and 1 week later, our ds/3's up...

So in summary, our launch was pushed back a complete month by Verizon, so that Verizon could launch first, and therefore cost us a bunch of customers, and they're retailing here for the same price we pay... At least we can always fall back on our service!!"

And that isn't the only area where it would appear that Verizon Online benefits from its relationship with Verizon in ways that others with contracts do not. We have no way of knowing when or if Verizon will turn on a given location for DSL until that location suddenly gets a response in the database. By location, I mean both a central office area, which in rural terms means a town, or remote area, which means, in rural terms, a remote terminal that acts as a sub-central office to deliver DSL.

Well, there is one other way of finding out. When my customers start calling me asking about Verizon's telemarketing calls to their home and/or business offering DSL, I know the area is now open for DSL. I have no proof how Verizon Online gets the information. All I know is I can't and somehow they can. Maybe they have a platoon of people sitting at terminals trying numbers until they hit gold.

Again, the FCC could regulate this, but they do not, as near as I can tell.

 

1. Background

what the RBOCs really think about competition

missing the Internet revolution

Robert Cannon

2. Pricing and Cost Issues: predatory prices crush competition

RBOC costs, for the record

3. Business Practices

4. Slamming and other dubious business practices

5. Networks

>6. Customer Service

7. VNXX

8. Verizon's Petition for Forbearance

9. Unintended Consequences

10. Conclusion

RBOCs, why you need me