FCC kills mandated DSL wholesale and sanctifies a wireline duopoly as vibrant competition - Gone is Muni FTTH?

[David Farber <dave () farber net>]

Begin forwarded message:

From: "Francois Menard (Mailing List Account)" <fm-listproc () MENARDS CA>
Date: August 6, 2005 3:50:42 AM EDT
To: CYBERTELECOM-L () LISTSERV AOL COM
Subject: FCC kills mandated DSL wholesale and sanctifies a wireline  
duopoly as vibrant competition - Gone is Muni FTTH?
Reply-To: Telecom Regulation & the Internet <CYBERTELECOM- 
L () LISTSERV AOL COM>


FCC kills mandated DSL wholesale and sanctifies a wireline duopoly as  
vibrant competition - Gone is Muni FTTH?
by François at 02:31AM (CDT) on August 6, 2005  |  Permanent Link
http://tim.blogware.com/blog/_archives/2005/8/6/1112664.html

In a press statement issued today, the FCC commissionners have agreed  
that the future of broadband in the US was better left in the hands  
of market forces.

Commissionner Copps however concedes that what the FCC has chosen to  
do today amounts to prospective regulatory making on a purely  
theoritical basis.  That has not stopped him however from concurring  
with the other Commissionners with the only announced accountability  
of the FCC being that he says he intends to keep tabs to see if what  
is supposed to happen truly does.  But just who will be there to keep  
tabs when the term of Commissioner Coops expires on May 1, 2006?

In the same statement, the FCC annnounces that it intends to issue a  
public inquiry in which it will begin to investigate issues  
associated with the walledgardenization of broadband access and by  
interence, must now look into intercarrier compensation in the  
context of broadband peering at public Internet NAPs which to this  
date has remained free from FCC investigations.

While ISPs in Canada can behave like ostriches and duck their heads  
in the dirt and avoid thinking about the ripple effects of the FCC  
continuing to push the limits of the impossible in avoiding to  
consider the impact of their policies on the survival of the same  
independant ISPs which have created the market of retail internet  
services, we can bet that the ILECs in Canada will take advantage of  
the Telecom Review and start pointing out to the grand canyon  
emerging between CRTC policies and the FCC policies.

In analyzing regulatory policies from the perspective of a regulatory  
framework which is supposed to lead to sustainable competition by  
remaining conducive to further facilities-based entry, consequences  
of the disappearance of mandated wholesale of DSL facilities are  
evident, that is, no more reasons for retail price discipline, thus  
no more price floors, which will arguably lead to foreclosure of  
further entry by other entities than the incumbent Telco's and cable  
carriers.

Consequently, the risks of Municipal FTTH entry have just been  
quintupled - do it and the ILECs and the Cable Carriers will   
immediately react by way of targeted decreases of DSL and cable modem  
services only for as long as necessary to kill Municipal FTTH while  
still  in the eggshell.

While the FCC is surely not foolish enough to believe that the public  
interest will be served by targeted price decreases of ILEC and MSO  
fat wasteband, the FCC seems to believe that they are acting in the  
public interest in making it more difficult to make a business case  
for municipal FTTH.

Unlike the CRTC, the actions of the FCC remain elusive as to whether  
the FCC truly believes that its prospective regulatory theories are  
compliant with the FCC's statutory obligation to administer a  
regulatory framework conducive to sustainable competition by ensuring  
that regulatory relief will exist for other carriers than ILEC and  
MSOs interested in making investments into their own facilities.

It is frustrating to see the American public endorse the fact that  
the FCC will be leading another 7 year market experiementation cycle  
in total disregard for the lessons supposed to be learned from the  
previous experiementation cycle with telecom competition concluding  
today.

With today's FCC action, it seems a safe bet that in 7 years, there  
will be no more wireline providers serving homes of Americans than  
their are today with only some exceptions coming to mind, Lafayette,  
being the latest one.

It is sad to see the FCC officialize new rules that will allow  
targeted below cost pricing by incumbent Telco's and MSO's with no  
systematic regulatory relief before the FCC.  This could hardly be  
construed as a positive thing.

-=Francois=-
819 692 1383

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