Subject: fyi, FC: Do we need the FCC? Responses to PFF book
Curtiss Priest (cpriest@juno.com)
Date: Fri, 8 Dec 2000 13:04:48 EST
To: tpr-ne@mitvma.mit.edu, ROUNDTABLE@CNI.ORG, boc@csus.edu, dvial@pacbell.net, geller@apt.org, mgjones@cqi.com, pws@afb.org, Date: Fri, 8 Dec 2000 13:04:48 EST Subject: fyi, FC: Do we need the FCC? Responses to PFF book Message-Id: <20001208.130517.7823.6.cpriest@juno.com> From: Curtiss Priest <cpriest@juno.com>
--------- Begin forwarded message ----------
From: Declan McCullagh <declan@well.com>
To: politech@politechbot.com
Subject: FC: Do we need the FCC? Responses to PFF book
Date: Fri, 08 Dec 2000 09:13:25 -0500
Message-ID: <4.3.0.20001208091218.01506370@mail.well.com>
************
>Date: Thu, 7 Dec 2000 17:31:12 -0500
>From: "J. Lasser" <jon@lasser.org>
>To: Declan McCullagh <declan@well.com>
>Subject: Re: FC: PFF book says technology reduces need for FCC
regulation
>
>In the wise words of Declan McCullagh:
>
> > [The Progress and Freedom Foundation is releasing a book at its=
conference
> > at the Renaissance Hotel in Washington, DC tomorrow. (Fee is $95,
> > http://www.pff.org/Dec.8%20TCom%20Conferencereg.htm) The intro
chapter=
is
> > below. --Declan]
>
>Bah. Double Bah.
>
>Since 1996, cable TV has gotten more expensive, and the increased
>"offerings" are mostly just the same old channels time-shifted for four
>or more time zones.
>
>Since 1996, FM radio has become almost totally consolidated, with two
>firms (Infinity and Clear Channel, IIRC) now owning the lion's share of
>stations in the states.
>
>In Baltimore, at least eight radio stations are owned by one company.
>They have two 'radio strip malls,' one downtown and one in Towson, each
>holding four stations. That represents a significant proportion (the
>majority, perhaps, though I haven't counted recently) of radio stations
>I can receive in my car, and a significantly larger majority of those
>stations with the megawattage to be received across the whole metro
>area. But even the tiny little stations (including WRNR 103.1, long my
>favorite station) have been bought by these behemoths, and the
>programming is noticably more commercial.
>
>The 1996 telecommunications act is not all bad, but it's destroyed the
>listenability of FM radio almost entirely, and has done little to help
>cable TV consumers, even in urban markets.
>
>--
>Jon Lasser
>Work: jon@skynetweb.com 410-558-2787 jon_lasser on Yahoo! IM
>Home: jon@lasser.org 410-659-5333 http://www.tux.org/~lasser/
> Buy my book, _Think_Unix_! http://www.tux.org/~lasser/think-unix/
************
>From: "Justin Peterson" <justin.peterson@worldnet.att.net>
>To: <declan@well.com>
>Subject: RE: PFF book says technology reduces need for FCC regulation
>Date: Thu, 7 Dec 2000 17:18:46 -0500
>
>Declan:
>Along these lines, I think your readers would find this piece
interesting=
as
>well.
>
>Justin Peterson
>TechcentralStation.com
>---------------------------------------------------
>Is Telecom=92s Future The Bells, The Bells, and Only The Bells?
>
>By: James K. Glassman, Host, Tech Central Station
>(www.TechCentralStation.com)
>
>Where=92s the competition? Nearly five years after passage of the
>Telecommunications Act of 1996, it=92s fading out of sight.
>
>In long distance, competition is hotter than ever. Consumers are getting
>huge breaks on their national and international long-distance calls.
Price
>pressures have reduced profits, spurred a 60 percent decline in stock=
prices
>for long-distance companies and forced major carriers AT&T and
MCI/WorldCom
>to restructure.
>
>At the local level, though, the story is very different. The Telecom
Act=92=
s
>key purpose was to open up the local phone loop and end the monopolies
of
>the regional Bell operating companies, the RBOCs or Baby Bells. But=
Business
>Week may have been prescient last year in labeling one of the Baby Bells
>leaders, SBC Chairman Ed Whitacre, =93The Last Monopolist.=94 For this=
market
>has turned away from competition. It=92s moving toward a
remonopolization=
of
>all telecommunications services from the bottom up.
>
>Where in 1996, there were eight local companies =AD the seven Baby
Bells=
plus
>GTE, the giant non-Bell local and long-distance company -- there now are
>only four. Verizon is a combination of BellAtlantic, Nynex and GTE. This
>year, it will have $65 billion in revenues =AD up from $13 billion in
1996.
>SBC Communications =AD formed from Southwestern Bell, PacTel and
Ameritech,
>the Bell of the Midwest -- has a market capitalization of more than $160
>billion =AD or twice that of AT&T. These companies are behemoths.
>
>Make no mistake. These companies are monopolies. They control the last
mile
>of telecommunications into the home. Their status is protected and=
regulated
>by state officials, often captive and generous. As a result, the Bells
have
>steadily increased their returns. Even a relative laggard like Bell
South
>had a return on equity in 1999 of 26 percent =AD compared with 13
percent=
as
>recently as 1993. The stock markets have rewarded these firms with
strong
>valuations, even as the competitive long-distance companies have
suffered=
in
>the market.
>
>The competition that Congress and President Clinton envisioned with the
>Telecom Act just hasn=92t happened. The Bells first filed lawsuits, then
>dragged their feet. Now, they have appealed to politicians. As they
drag=
out
>the deregulation process, smaller companies that had hoped to compete
are
>dropping by the wayside.
>
>Further evidence that the Bells are winning a war of attrition came
after
>the Thanksgiving weekend.
>
>Covad Communications Group, one of the largest upstarts (called C-LECs,
or
>competitive local exchange carriers) competing with the Baby Bells in
the
>area of high-speed Internet data transmission, announced not only that
it
>was laying off 400 workers but also that it would stop building out its
>digital subscriber line (DSL) network. It can=92t raise the money to go
on.
>The one-time darling of investors has seen its stock plunge 93 percent
in
>the last year.
>
>But why? Analysts are predicting that data communications will grow at
an
>annual rate of 70 percent over the next few years. The kind of
high-speed
>service Covad provides would seem just what people want.
>
>Even so, Covad now joins Rhythms Connections, NorthPoint Communications
and
>numerous other competitors to the local Bells in cutting back expansion
>plans and seeking partnership with the Bells to stay afloat. Covad, in
an
>attempt to stay in business, has sold a 6 percent stake to SBC.
NorthPoint
>has agreed to merge into Verizon.
>
>Such deals violate the intent of the Telecom act and the rules for its
>implementation. Those rules, written by the Federal Communication
>Commission, required the Bells to unbundle their networks and sell
>components to C-LECs at discounted rates so they could compete. The
carrot
>for the Bells was that when there was sufficient competition, they=92d
be
>allowed into the long distance business.
>
>Only the Bells have sidestepped those rules to get what they want. As
>Jennifer Files wrote last week in the San Jose Mercury news:
=93Dependent=
on
>networks owned by the phone companies they compete against, [C-LECs]
wound
>up stuck in legal and lobbying fights for fairer access to the larger
>companies=92 systems.
>
>The markets recognize what=92s going on. The low stock prices for the=
stocks
>of Bell competitors reflect the reality that they don=92t have a chance
to
>succeed =AD given the Bells=92 continuing grip on the politicians and
their
>unwillingness to offer proper discounts or even, for that matter, to
pay=
the
>bills they owe C-LECs that complete their calls.
>
>After the would-be competitors have invested more than $100 billion and
>spent nearly five years trying to break into the market, the Bells
continue
>to control 95 to 98 percent of local access lines. No wonder competitors
>want to give up or join up rather than fight, especially when regulators
-- >despite the lack of local competition -- have granted Verizon the right to >long-distance service in New York and SBC a similar deal in Texas. > >With almost breathtaking audacity, the Bells are now trying to gut the >Telecom Act entirely. They have pursued federal legislation that would= allow >them immediately to get into the long-distance data business (soon the= large >majority of all long distance, and the most lucrative part) without >fulfilling their obligation to open up local service to competition, under >the Internet Freedom and Broadband Deployment Act =AD a true misnomer. > >Meanwhile, the Bells are creating a thicket of new problems for their >biggest potential competitors for both local and Internet services =AD the >cable television industry. > >Arcane cable restrictions on ownership already make it impossible for >potential cable competitors to the local phone monopolies to provide phone >service to anywhere near the percentage of households that the Bells do. > >Still, the Bells propose to hobble them some more. They have funded >campaigns to force cable companies to open up their lines to all Internet >Service Providers (or ISPs). Such =93open access=94 =AD which is actually= forced >access =AD has not even been shown to be technically feasible yet. But >regulators are going along. The Federal Trade Commission, which previously >had been a staunch opponent of such policies as undue government >interference in private enterprise, has held up the merger of America= Online >and Time Warner in an attempt to require Time Warner=92s cable operations= to >open up to ISPs on politically mandated terms. William Kennard, the FCC >chairman, now appears to have reversed the stance that both he and his >predecessor, Reed Hundt, had taken against just such intervention. > >All of this gives the Bells more time to roll out and improve their own DSL >service, locking in their captive audience. > >Congress and the regulators need to wake up. The reason American consumers >do not have the best telecommunications possible is simple: The local >monopoly lives. And it grows. With firm action to enforce the Telecom Act, >consumers will soon find that the promises of choice, made back in 1996, >will come down to this =AD The Bells, the Bells, only the Bells.************
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--------- End forwarded message ----------
W. Curtiss Priest, Director, CITS Center for Information, Technology & Society 466 Pleasant St., Melrose, MA 02176 Voice: 781-662-4044 BMSLIB@MIT.EDU Fax: 781-662-6882 WWW: http://Cybertrails.org
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