Competition

Content tagged with "Competition"

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Free Press Responds to 'Sloppy' Incumbent Broadband Arguments

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The American Recovery and Reinvestment Act of 2009 directed the Federal Communications Commission (FCC) to develop a national broadband strategy. FCC invited comments and then invited replies to those comments in summer 2009. The Free Press Reply Comments deserve to be singled out for revealing some of the lies of large telecommunications companies like Verizon, AT&T, Comcast, Qwest, and others. It also describes many of the ways that these companies harm the communities that are dependent on them for essential services. I've highlighted some passages below that show the ways in which these companies put profit above all else. These companies claim that regulation discourages investment and deregulation (allowing a higher degree of concentration or larger monopolies) encourages increased investment in better networks - an incredibly self-serving claim that Free Press shows to be false on pages 13-29.

Competition -- meaningful and real competition -- and not regulation is the primary driver behind investment decisions. Where meaningful competition exists, incumbents are compelled to innovate and invest in order to maintain marketshare and future growth. Where competition is lacking -- such as it is in our broadband duopoly -- incumbents will delay investment, knowing full well they can pad their profits on the backs of captured customers who have no viable alternatives. (Page 14)

Regulations like open access and non-discrimination encourage competition and should be strengthened. Free Press offers an in-depth explanation of how Verizon has dumped millions of customers on other companies that clearly could not handle the burden.

Verizon began the purging of less lucrative areas with the sale of Verizon Hawaii to the Carlyle Group in 2005, a company that had no previous experience in operating telecommunications services. By Dec. 2008, the company, now called Hawaii Telecom, had lost 21% of customers and filed for bankruptcy. (Page 26)

Verizon then sold most of their New England lines to Fairpoint, which is currently heading for bankruptcy. Fairpoint's customers are not the only ones suffering - the independent companies that resell services over that infrastructure are also suffering because Fairpoint is utterly unable to meet its obligations.

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NOFA Reactions: a Mini Round Up to Broadband Stimulus Rules

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I have been digesting the NOFA (the rules for broadband stimulus projects) and I am stunned at just how much I disagree with them. I think the National Telecommunications and Information Administration, a branch of the Department of Commerce in D.C., and the Rural Utilities Service have really done a disservice to this country. Before I highlight some commentaries that I have found most interesting thus far, I want to note that this is why we take a bottom-up approach. In talking to many people working on community networks, most everyone is frustrated and the rest are really angry. It sure seemed like the feds were heading in the right direction, but the broadband stimulus rules show just how out of touch they are. We advise communities to find ways of being self-reliant. If they are able to get help from D.C., that is great; but they should never depend upon it. We will have some more details of our reaction to the rules soon, but for now I wanted to highlight some of the folks that reacted quickly and offered interesting thoughts. Starting on the positive side, Andrew Cohill at Design Nine thinks the encouragement for open access networks and transparency could ultimately be the defining characteristic.
This means networks that offer competitive pricing from more than one provider get preference--this is huge, and could have important long term consequences. The rules also do something else quite important on the same page (page 66, line 1463), where there is explicit preference for open access transport, which in telecom jargon is "interconnection." The rules say that companies that post their interconnection fees publicly and agree to nondiscrimination will get preference.
If he is correct, the implications are great. However, the rules certainly could have demanded open access as a condition of public money being used rather than a limited form of extra credit for those who will encourage competition in a market suffering the utter lack of it. Harold Feld, who rightly noted that good people struggled and worked on this, saw both positives and negatives in the rules. He defends the "broadband" speed definition from the FCC (768kbps down and 200kbps up):
I am in the minority in thinking they played this right.
Read More

NOFA Reactions: a Mini Round Up to Broadband Stimulus Rules

By on
I have been digesting the NOFA (the rules for broadband stimulus projects) and I am stunned at just how much I disagree with them. I think the National Telecommunications and Information Administration, a branch of the Department of Commerce in D.C., and the Rural Utilities Service have really done a disservice to this country. Before I highlight some commentaries that I have found most interesting thus far, I want to note that this is why we take a bottom-up approach. In talking to many people working on community networks, most everyone is frustrated and the rest are really angry. It sure seemed like the feds were heading in the right direction, but the broadband stimulus rules show just how out of touch they are. We advise communities to find ways of being self-reliant. If they are able to get help from D.C., that is great; but they should never depend upon it. We will have some more details of our reaction to the rules soon, but for now I wanted to highlight some of the folks that reacted quickly and offered interesting thoughts. Starting on the positive side, Andrew Cohill at Design Nine thinks the encouragement for open access networks and transparency could ultimately be the defining characteristic.
This means networks that offer competitive pricing from more than one provider get preference--this is huge, and could have important long term consequences. The rules also do something else quite important on the same page (page 66, line 1463), where there is explicit preference for open access transport, which in telecom jargon is "interconnection." The rules say that companies that post their interconnection fees publicly and agree to nondiscrimination will get preference.
If he is correct, the implications are great. However, the rules certainly could have demanded open access as a condition of public money being used rather than a limited form of extra credit for those who will encourage competition in a market suffering the utter lack of it. Harold Feld, who rightly noted that good people struggled and worked on this, saw both positives and negatives in the rules. He defends the "broadband" speed definition from the FCC (768kbps down and 200kbps up):
I am in the minority in thinking they played this right.
Read More

NOFA Reactions: a Mini Round Up to Broadband Stimulus Rules

By on
I have been digesting the NOFA (the rules for broadband stimulus projects) and I am stunned at just how much I disagree with them. I think the National Telecommunications and Information Administration, a branch of the Department of Commerce in D.C., and the Rural Utilities Service have really done a disservice to this country. Before I highlight some commentaries that I have found most interesting thus far, I want to note that this is why we take a bottom-up approach. In talking to many people working on community networks, most everyone is frustrated and the rest are really angry. It sure seemed like the feds were heading in the right direction, but the broadband stimulus rules show just how out of touch they are. We advise communities to find ways of being self-reliant. If they are able to get help from D.C., that is great; but they should never depend upon it. We will have some more details of our reaction to the rules soon, but for now I wanted to highlight some of the folks that reacted quickly and offered interesting thoughts. Starting on the positive side, Andrew Cohill at Design Nine thinks the encouragement for open access networks and transparency could ultimately be the defining characteristic.
This means networks that offer competitive pricing from more than one provider get preference--this is huge, and could have important long term consequences. The rules also do something else quite important on the same page (page 66, line 1463), where there is explicit preference for open access transport, which in telecom jargon is "interconnection." The rules say that companies that post their interconnection fees publicly and agree to nondiscrimination will get preference.
If he is correct, the implications are great. However, the rules certainly could have demanded open access as a condition of public money being used rather than a limited form of extra credit for those who will encourage competition in a market suffering the utter lack of it. Harold Feld, who rightly noted that good people struggled and worked on this, saw both positives and negatives in the rules. He defends the "broadband" speed definition from the FCC (768kbps down and 200kbps up):
I am in the minority in thinking they played this right.
Read More

NOFA Reactions: a Mini Round Up to Broadband Stimulus Rules

By on
I have been digesting the NOFA (the rules for broadband stimulus projects) and I am stunned at just how much I disagree with them. I think the National Telecommunications and Information Administration, a branch of the Department of Commerce in D.C., and the Rural Utilities Service have really done a disservice to this country. Before I highlight some commentaries that I have found most interesting thus far, I want to note that this is why we take a bottom-up approach. In talking to many people working on community networks, most everyone is frustrated and the rest are really angry. It sure seemed like the feds were heading in the right direction, but the broadband stimulus rules show just how out of touch they are. We advise communities to find ways of being self-reliant. If they are able to get help from D.C., that is great; but they should never depend upon it. We will have some more details of our reaction to the rules soon, but for now I wanted to highlight some of the folks that reacted quickly and offered interesting thoughts. Starting on the positive side, Andrew Cohill at Design Nine thinks the encouragement for open access networks and transparency could ultimately be the defining characteristic.
This means networks that offer competitive pricing from more than one provider get preference--this is huge, and could have important long term consequences. The rules also do something else quite important on the same page (page 66, line 1463), where there is explicit preference for open access transport, which in telecom jargon is "interconnection." The rules say that companies that post their interconnection fees publicly and agree to nondiscrimination will get preference.
If he is correct, the implications are great. However, the rules certainly could have demanded open access as a condition of public money being used rather than a limited form of extra credit for those who will encourage competition in a market suffering the utter lack of it. Harold Feld, who rightly noted that good people struggled and worked on this, saw both positives and negatives in the rules. He defends the "broadband" speed definition from the FCC (768kbps down and 200kbps up):
I am in the minority in thinking they played this right.
Read More

UTOPIA's Roller Coaster Ride Continues

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Anyone who tells you that UTOPIA is a "success" or that it is a "failure" is probably minimizing important problems or victories for the network. The Utah Telecommunication Open Infrastructure Agency, like so many other things in life, is a mixed bag. For those new to UTOPIA, it is a large multi-community full fiber network that operates by only selling wholesale access to service providers. Due to a law designed to protect incumbent service providers under the guise of protecting taxpayers, UTOPIA cannot offer any services itself and is strictly open access. For a variety of reasons - that have not and likely will not be repeated by other communities - the network has not yet met expectations. The costs have been greater than expected and the network does not yet cover its entire intended territory (some 16 communities and 140,000 people). However, where it does operate, it is blazing fast. The service providers offer the fastest speeds at the lowest prices (see a service comparison). It has offered a tremendous competitive advantage to the businesses and communities in which it operates. Last year, Lawrence Kingsley wrote "The Rebirth of UTOPIA" that explored where the network went wrong and how it has also succeeded. Perhaps most notably, he notes that the churn rate (people switching to other networks) is ridiculously low at .5% - a common trait to community owned networks. Last month, Geoff Daily reported on how UTOPIA is "Transforming Failure Into Success." They have greatly improved their marketing practices - which has historically been a large barrier to success. This is an important lesson for all - even though there are very few competitors in the broadband market, they do fight fiercely for subscribers. Broadband is competitive like boxing, not like a marathon. But the news coming out of Utah is not all cheery. Jesse, the resident UTOPIA expert, has recently explained some of the current financial problems and their origin. Perhaps the most important lesson to take away from UTOPIA is that plans always go awry. I have yet to find a community that did not have unexpected problems along the way to building their networks.
Read More

UTOPIA's Roller Coaster Ride Continues

By on
Anyone who tells you that UTOPIA is a "success" or that it is a "failure" is probably minimizing important problems or victories for the network. The Utah Telecommunication Open Infrastructure Agency, like so many other things in life, is a mixed bag. For those new to UTOPIA, it is a large multi-community full fiber network that operates by only selling wholesale access to service providers. Due to a law designed to protect incumbent service providers under the guise of protecting taxpayers, UTOPIA cannot offer any services itself and is strictly open access. For a variety of reasons - that have not and likely will not be repeated by other communities - the network has not yet met expectations. The costs have been greater than expected and the network does not yet cover its entire intended territory (some 16 communities and 140,000 people). However, where it does operate, it is blazing fast. The service providers offer the fastest speeds at the lowest prices (see a service comparison). It has offered a tremendous competitive advantage to the businesses and communities in which it operates. Last year, Lawrence Kingsley wrote "The Rebirth of UTOPIA" that explored where the network went wrong and how it has also succeeded. Perhaps most notably, he notes that the churn rate (people switching to other networks) is ridiculously low at .5% - a common trait to community owned networks. Last month, Geoff Daily reported on how UTOPIA is "Transforming Failure Into Success." They have greatly improved their marketing practices - which has historically been a large barrier to success. This is an important lesson for all - even though there are very few competitors in the broadband market, they do fight fiercely for subscribers. Broadband is competitive like boxing, not like a marathon. But the news coming out of Utah is not all cheery. Jesse, the resident UTOPIA expert, has recently explained some of the current financial problems and their origin. Perhaps the most important lesson to take away from UTOPIA is that plans always go awry. I have yet to find a community that did not have unexpected problems along the way to building their networks.
Read More
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