---------- Forwarded message ---------- From: "Clint Ricker" <[EMAIL PROTECTED]> To: [EMAIL PROTECTED], "WISPA General List" <wireless@wispa.org> Date: Wed, 25 Jul 2007 14:40:19 -0400 Subject: Re: [WISPA] Broadband Baloney? An FCC Commissioner's take on"Broadband"..
I think you missed my point here. My point is that forcing telcos to > resell their network layer does absolutely nothing to connect > additional people. If I resell AT&T DSL to someone on AT&T's network, > they could have just as easily gotten it from AT&T. So you think that CLEC's and ISP's have never actually brought the Internet or a new service to anyone? That's striking. Yes the footprint does not grow, but certainly the penetration does.
Back when the Internet was new, they were great for this because they generally had better customer relationships with the customers. These days, Internet is commodity--in almost every case, if they didn't get it from the ISP or CLEC, they would get it from the cable company or telco. And without the revenue from the rented network, how would anyone build
new facilities?
Revenue from the services sold on the network through retail options, as has always been the case... Dynamic T1 and Integrated T1 were CLEC inventions. VoIP didn't come to the masses from the ILEC's and neither did DSL or
dial-up.
CLEC style VoIP is not really all that interesting--in the end, it is all to often POTS over IP and leaves out much of what is potentially interesting on VoIP. Definitely, without the CLEC competition, Internet access would have evolved in a much different manner. However, I'm more arguing that the CLECs are more or less irrelevant today (from any sort of policy standpoint)--most of the market forces really do come down to telco/cable in the metro areas and wireless in rural markets. The CLECs were the forerunners in a lot of areas--but, by and large, their era of innovation is long over.
> I'm not saying that these aren't decent business models, btw, and > can't make people some dough. But, national policy is not structured > around making sure that an extra couple of CLECs or NSPs are cash > positive... running the same old tired copper to the same old > customers does not increase broadband penetration. National policy! HA! It's about Innovation and Competition.
In which case, the CLECs only have themselves to blame :) Would we have DSL today if not for Covad/Northpoint/Rhythms? DSL was
invented in Bell Labs in 1965! RBOC's did not want to cannibalize their $1500 T1 revenue. (Then they went the exact opposite way).
Agreed...but that was 1998-2002. What have they done for us lately?
Does it hurt the ILEC? Heh...probably not all that much. But, are > CLECs really helping the consumer? I tend to argue no, by and > large...why IS CLEC market share so small? Why are independent ISPs > have so little market share? Clint, I could spend days on this. For you even to ask this, ..... it almost feels like you are trolling (or do I hear the clinking of ice?)
I'm honestly not trolling here, although, given the forum, it definitely comes across that way. Definitely, back in the 1990's and early 2000's, CLECs drove costs down and drove in new services that Bell had little interest in offering. That was 5 years ago, though. By and large, the bells are usually fairly competitive price wise in the business market and by far the best value out there in the residential / SOHO market. Now, it is largely the cable/telco competition that is keeping prices down, not the CLECs... I worked for several years at an ISP that did the whole BellSouth DSL NSP stuff. The FISPA list, etc...continually trashed BellSouth DSL service and their poor customer service, and so forth, and espoused the the glories of independent ISPs, which I largely agreed with until one day when I setup a friends self-install DSL kit from BellSouth. It was a very slick automated installation procedure that was _much_ better than what we were doing. The Independent ISP community did _way_ too much talking about their own value and their own "great customer service" while, by and large, doing very little to actually improve workflows, improve the customer experience (in terms of ease of turn up) and way too little time / effort spent actually selling and marketing. Simply put, by 2005 the telco offering by and large was, for most people, a better product. Again, this isn't a universal indictment, but a lot of their problems were self-inflicted and not the result of FCC meddling. Too much talk, too little action... Way, way too much time was and is still spent blaming the government and the "evil" ILECs and too little time / effort spent actually selling, improving business operations, and reinvesting in better infrastructure / services. In the end, the market share for the CLECs and independents is small because more consumers chose to go with someone else. Some of the better-run ones that actually do have a compelling product offering do fairly well... Honestly, would you say that (insert independent ISP reselling ILEC DSL service) has a better DSL offering than (insert ILEC)? By and large, I wouldn't...
> CLECs have killed themselves because they tended to think in quarterly > and yearly terms for P/L and investment. The cable companies and the > ILECS tend to think longer term and so have been able to win out in > the long term. NSPs pay ~$30/month to resell DSL service; $3,600 over > ten years to provide DSL service to a residence. That's enough money > to start financing a fiber buildout, and that's just some crummy DSL > service. Owning the physical infrastructure makes a huge difference, > something that CLECs, by and large, never learned, and just kept on > paying huge chunks of money to the ILEC rather than building their own > network and making themselves sufficient (in a lot of cases, it isn't > feasible, since you do have to have a certain market penetration for > it to be worthwhile.). By and large, most CLEC's are run by Bell-head idiots. Most will be entering BK in the next 18 months.
But even the ones who built network - L3, WilTel, GX and more - couldn't
execute a plan to pay back the debt.
There are a few that have built networks - NEON, Norlight, Fiberlight,
Coretel, CityNet - that are doing fine, because they knew exactly what their market was - and executed well on a good strategy.
Most of that is the market...L3, WilTel, and GX screwed themselves over by throwing billions of dollars into an incredibly overbuilt market (carrier fiber networks). Paying $$$$$ to run even more fiber from Chicago to New York when there is already way too much is a MUCH different market than last mile. The good thing with last mile access is that there is a very viable return on the investment and very little competition (you have _at most_ 2-3 providers who have physical connections to a given address).
Put the efforts on getting more people involved in actually building > out networks and increasing REAL competition (yes, wireless does fit > in there to some degree). The FCC can't even force the cellco's to build out all of the spectrum they have hoarding since 1996. Nor has Congress, the FCC or any PUC been able to force the ILEC's to actually live up to its promises for rate increase, 272 relief, mergers, or build-out. So Clint please explain to me HOW DO YOU FORCE A NETWORK BUILD OUT?
That is the multi-billion dollar question! Ideally, 1. Get accurate data about who actually has access to Internet access! 2. Eliminate ALL vertical monopolies (ie you cannot sell more than one of three out of physical, network, and application layers except for rural markets). At some point, this means that for the physical network providers to grow, they have to expand infrastructure (among lots of other good things). It may make sense for the physical layer to be actually muni-owned in many areas. 3. Heavily subsidize community-based efforts in rural areas. In the end, if the people want to get on the 'net, they should be a driving force in the ultra-rural market. 4. Place a "bounty" on each rural subscriber added (or some similar metric). In other words, subsidize ex-post-facto instead of on a vague promise of future network buildouts... 5. Use the data from one and go down by population. In other words concentrate on the rural market before getting to the ultra-rural market. Now, #2 won't ever happen. How do you deal with ILECs who don't follow the regulations? That's a tough one, since most of the legal mechanisms (fines and so forth) aren't really effective because they 1. just become a cost of doing business and 2. are so weighted down in court battles as to be, at best, too little, too late. I don't really have the answer to that question. I think that the government has to be willing to use political leverage a lot more. While I tend to agree with a lot of the major FCC rulings over the past few years, they were given away too lightly. Just because it is the right decision doesn't mean that it can't have strings attached. In other words, the government has to actually grow a backbone... Want DSL line sharing requirements dropped? We'll talk AFTER we have X% of rural buildout. Oh, and where is that investment money coming from? Because once the
CLEC's start hitting BK, investment dollars will dry up. In fact, if you watch VZ and T, you will see that their access to cheap debt for their build outs has ended as well. And the RBOC's have to borrow more to build out 3G / 4G. More debt heaped on top of their billions in debt. BTW, you keep saying DOCSIS 3. Big deal. Collectively the MSO's have $100B in debt from building out to DOCSIS 2. Where do you think that investment money will come from for D3? That's like another $75B. And The Street doesn't even value cableco stock as much as it values RBOC stock.
I don't really find the debt that big of a deal...a couple of thousands of dollars of debt per customer financing buildout when the ARPU can be $10,000-$20,000 over 10 years for a residential subscriber is a pretty good deal. The network buildouts on the cable side are _much_ cheaper than on the telco side--the upgrade to DOCSIS 3 is not much different, cost wise, than the upgrade to ADSLv2. However, cable doesn't have to do fiber upgrades (coax is much better than fiber--HFC plants can push 50Gb/s worth of data) and cable doesn't have the very expensive capital costs of video network buildouts... DOCSIS 3 will come down fairly quickly simply because it isn't all that expensive (relatively speaking) and doesn't require that big of an overhaul... -Clint Ricker Kentnis Technologies -------------------------------------------------------------------------------- Would you like to see your advertisement here? Let the WISPA Board know your feelings about allowing advertisements on the free WISPA lists. The current Board is taking this under consideration at this time. We want to know your thoughts. -------------------------------------------------------------------------------- -- WISPA Wireless List: wireless@wispa.org Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless Archives: http://lists.wispa.org/pipermail/wireless/
