DSL Prime Inside DC

[Dave Farber <dave () farber net>]

------ Forwarded Message
From: Dave Burstein <dave () dslprime com>
Date: Fri, 21 Feb 2003 05:18:25 -0500

Subject: DSL Prime Inside DC

deal with tense

February 20 From Washington

Wednesday night, around midnight, the deal went down. The Bells will get a
monopoly on wireline broadband, and AT&T and MCI's UNE-P local phone
competition will be protected by many states. Copps, Adelstein, and Martin
agreed to Martin's terms: give up on broadband, but keep home voice. The
bells get to raise wholesale TELRIC rates. Many details haven't been
decided.

      Staff worked virtually through the night, and we waited two hours in
the meeting room while they checked things in the morning. Bureau chief xxx
read the summary; serious-faced Abernathy, Copps and Adelstein spoke
passionately on why they voted yes while dissenting in part. Each said
eliminating linesharing is a terrible mistake that will cost consumers and
delay broadband. Baby-faced Kevin Martin claims the monopoly will inspire
the bells to offer DSL more widely and invest in the fiber build. Martin's
told me previously how important a truly fast internet is for economic
progress, while the rest of the commission is satisfied with 200K fast
email "advanced services." (He's right)

       Mike Powell, generally gracious and jovial, was all business.
Linesharing xxx. UNE-P's were unsustainable artificial competition that
would likely be thrown out in court. Meanwhile, everything will stagnate
for years in battles in the states and the court. Powell's clearly calling
for the courts to overrule the FCC, and his old boss Harry Edwards may be
the judge who decides the case. Powell's convinced this reporter these are
principles for him, not a battle of egos. He concluded "  " .

       As they walked off the stage, Martin rubbed Powell's elbow and
looked to him for a smile in return. Powell's returns a piercing stare,
goes upstairs, and tells  the Wall Street Journal xxx

       $15B falls off the bells market cap, Covad falls nearly half. A
major stock trader with reports from the room could have made millions. We
had good guesses at ten, certainty soon after 11, but the market didn't
move till the news hit the wires after 12. SBC President Bill Daley has
predicted virtual bankruptcy for his company if they lost on UNE-P, but the
market thinks he's bluffing.

        The bells scream in outrage, Verizon's Tom Tauke saying " ". He
must fear for his job, like every telco lobbyist who failed. He doesn't
realize he's calling his bosses liars. Ivan Seidenberg has told Intel's
Andy Grove they'll install "a third more broadband" if they win on
linesharing; Larry Babbio promised me " " if they got Tauke plan through.
Fisaster, and a total screwing for allies HTBC.

        U.S. broadband is falling irresistably to 1 1/2 choices. Virtually
every ISP is headed to disaster - Earthlink's situation may become
desparate, AOL, MSN, and probably Yahoo have little to offer the bells and
are headed to minor player roles. Small business not considered.

       Future of U.S. DSL is now a bell musiness, probably a dull and slow
one. Goal and results. FNF


--------------------------------------

Bill Maher led the press conference that cleared up some of the details -
here's some of the crucial ones most of the press missed.

linesharing

remotes (no press understood - marketing cost added, deadly error,
technological change)

Telric pricing

UNE-P

----------------------

Behind the scenes Pietch, NARUC, leaks back and forth, white house
mysterious connection.


public apology to powell

invite FNF.

. NARUC had organized the states to demand a continued role, and Martin had
built strong ties to the state commissions. , with line sharing gone and
30% of the network denied to others. Lobbied by Intel, Martin thinks this
will persuade the bells to build fiber to the home. Better to have monopoly
fiber, apparently, than no fiber at all. Two days before, per newspaper
reports, only fiber


HTBC kills compromise  Pietch

Martin - shrewd, but career limiting failure possible - see why good
operative, reminding me of Dick.

Daley and Whitacre had been warning SBC faced bankruptcy if UNE-P continued.

Powell and Martin both principle - Werbach and Farber

rubbed elbows and smiled - Powell looked daggers, and a few minutes later
WSJ

The following cheap shots, from press and commentary
Machismo
Bells will win

Intel role

Krim reporter.

My mistakes: Powell, Martin, other papers, fiber



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