What do we mean when we say "competition?" (was: Re: [Latest draft of Internet regulation bill])

Wed Nov 16 08:30:42 UTC 2005

--On November 16, 2005 1:48:39 AM -0500 Sean Donelan <sean at donelan.com> 
wrote:

> On Tue, 15 Nov 2005, Owen DeLong wrote:
>> 	areas, it's actually illegal.  Usually, municipalities
>> 	have granted franchise rights of access to right of
>> 	way to particular companies on an exclusive basis.  That
>> 	makes it pretty hard for a competitor to enter the market
>> 	if they can't get wholesale access to the existing copper.
>
> Where do you think this happens?  Federal law and FCC regulations don't
> permit exclusive franchises, and require cities to allow non-discrimintory
> access to right of ways.
>
Try to be a competing cable company in San Jose.

The city seems to have interpreted that to mean backbone rights of ways
and not last-mile rights of ways in neighborhoods.

>
>> 2.	The existing copper was actually deployed (at least in most
>> 	of the united States) using public subsidies.  The taxpayers
>> 	actually paid for the network.  The physical infrastructure
>> 	should be the property of the people.  The ownership claim
>> 	of the telephone companies is almost as baseless as the
>> 	Verisign clame that they own the data in whois.
>
> Again, where are these public subsidies?  In rural (i.e. non-RBOC) areas
> with USDA borrowing authority which I think is actually a revolving
> borrowing authority, i.e. rural utilities have to pay the money back?  I
> don't think the RBOCs ever qualified for USDA borrowering.
>
> I think you are confusing taxpayers with shareholders and ratepayers. In
> same places governments provide companies incentitives to attract
> investment in their areas, such as building new factories, etc; but
> normally people don't think that gives the government a lien on
> the factory.
>
While this is true, you will find that it is my considered opinion
that if HP wants to call it the HP arena, they should have reimbursed
me my 5% utility tax that I have been paying for years and continue
to pay towards the cost of building it.

I am actually opposed to government doing this in any form other than
a loan which is expected to be paid back.  Especially when it comes
to such things as ballparks, arenas, etc.

>
>> 	Semi-regulated monopolies that think they own an infrastructure
>> 	built with taxpayer money. (see also 2 above)
>
> Again, I think you are confusing taxpayers with shareholders and
> ratepayers.
>
>
>> Huh?  How does this favor one set of business models?  What it does is
>> take the portion of the infrastructure that was built with taxpayer
>> money and put it back in the hands of the taxpayer so that whatever
>> carrier the tax payer wants to buy service from has equal access to the
>> infrastructure.
>
> What taxpayer money, other than the government paying its telephone
> bills, do you think was used to build the RBOC or MSO infrastructure?
>
>
My understanding, as I stated, was that in the pre-Greene days, cities
actually paid AT&T a "fee" to get neighborhoods wired either retroactively,
or, as they were built.

>> Today, nobody can put CATV infrastructure anywhere in San Jose
>> if their name isn't Comcast.  Period.  The city sold us out to
>> an exclusive franchise deal.  The current bill proposed eliminates
>> that.  That's a good thing.
>
> Exclusive cable franchises were eliminated in by federal law in 1992.
>
> Comcast has a non-exclusive franchise in San Jose.  Of course, I live
> across the railroad tracks in Sunnyvale, another non-exclusive franchise
> territory dominated by Comcast.  Comcast chosen not to deploy advanced
> cable services on my side of the railroad tracks.  The original cable
> franchises were often divided up into multiple areas in a city, e.g.
> Philidelphia has four different franchise areas, City of Los Angeles has
> 14 different franchise areas.  Cable companies had a phased roll out of
> services in different areas over many years.  Even today, cable companies
> don't have DVR, HDTV, Voice or Video on Demand rolled out to 100% of their
> service areas.
>
So... Who besides Comcast is operating in San Jose?  Nobody.  Why?  Because
whether you consider their deal an exclusive franchise or not, for
all practical purposes, it is.  Comcast got very favorable rates from
the city on a number of things in exchange for promising to build out
a certain level of infrastructure.  As I see it unless the city is
obliged to provide the same deal to any other company, that's effectively
a subsidy supporting a Comcast monopoly.

> Currently cable companies do not need to obtain a state license to offer
> voice or telecommunication services over its facilities.  Telephone
> companies, and other cable competitors, still need to negotiated
> individual municiple franchises in order to offer video services of
> its facilities.

In any case, the bottom line is that whether through subsidy, "deal",
or other mechanism, the "last-mile" infrastructure tends to end up being
a monopoly or duopoly for most terrestrial forms of infrastructure.
As such, I think we should accept that monopoly and limit the monopoly
zone to that area (MPOE<->B-Box or MPEO<->MDF) and prevent an unfair
advantage by separating the management of that section of infrastructure
from the service providers offering services which use said
infrastructure.

This, at least on a theoretical level creates a carrier-neutral
party managing the monopoly portion while maximizing and levelling
the playing field in all other areas.

Owen

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