4 ms·

So we had this in the Florida Keys with AT&T who is the service provider of our area. I live 2 miles out on a peninsula of an island named Summerland, anyway I

by kls 7y ago

So we had this in the Florida Keys with AT&T who is the service provider of our area. I live 2 miles out on a peninsula of an island named Summerland, anyway I bought my house and AT&T assured me that I could get DSL but fiber would not be an option. I knew it was copper all the way to my home so I figured it would be the case. Anyways, I buy said house AT&T comes out and tried to get DSL working, and the lines have been so patched and spliced that they cannot even get 1mbps, so they basically tell me I am screwed that it would not be cost effective to run new copper down a 2 mile stretch and that my only option would be to pay (or band my neighbors together to pay -- All 2 of them) for them to string fiber the whole way. I think it would be something like 70k. 2 Months later Hurricane Irma hits and rips down every poll down our street, and AT&T is forced to restring the whole street due to the fact that they are legally required to provide phone service to every customer in their "exclusive" area or they loose said exclusivity. Fortunately for me they opted to string it with fiber, and provided fiber to the home. My point is, I don't see how allowing these "exclusive" coverage monopolies does anything but harm the consumer. I imagine a community based provider like the one in the article would be met with a host of legal challenges here.

foobarian 7y ago
> My point is, I don't see how allowing these "exclusive" coverage monopolies does anything but harm the consumer. I imagine a community based provider like the one in the article would be met with a host of legal challenges here. I think the problem that was trying to solve is to avoid the Comcast poles, AT&T poles, Verizon poles, RCN poles and probably others, all strung up with their own networks of cables and wires.
- josh2600 7y ago
  It’s precisely due to the fact att destroyed competitive telecom equipment and infrastructure at every turn for the last 150 years that we have exclusivity agreements. Att has threatened to break domestic telecommunications over and over again if they couldn’t have monopolies (although now Comcast exercising those same monopolies is hurting att).
- kls 7y ago
  Funny parts is we actually have that here, the next island over (Ramrod Key), is exclusively Xfinity/Comcast and I believe Key West is split between AT&T, Comcast and Verizon (but most of it is underground there). I am not sure what the upper islands are but I would assume a mix of at least AT&T and Comcast.
millisecond 7y ago
Without the exclusivity agreement, it sounds like you wouldn’t have been reconnected. A community provider probably wouldn’t allocate 70k in capital to bring 3 (potential) customers online. So you’re benefitting by the subsidy of users in denser areas being forced into exclusivity.
- smolder 7y ago
  How much of that is also a tax write off for the Telco?
- dd36 7y ago
  It’s not really 70k. It’s probably 15-20k.
- snowwrestler 7y ago
  Consider what the community is already investing in these people. The street along which those lines were strung probably cost a lot more than 70k to construct and maintain; why would the municipality draw the line at Internet?
throw0101a 7y ago
> My point is, I don't see how allowing these "exclusive" coverage monopolies does anything but harm the consumer. I imagine a community based provider like the one in the article would be met with a host of legal challenges here. This is a holdover from the early days of the phone systems, i.e, 1920s. It is extremely expensive to string cables, and so a whole bunch of companies would install stuff to the most lucrative markets (big cities), go bankrupt, and then there would be all of these cables would be left hanging causing a hazard. So it was decided that only one company would string cables... but that company would have its prices regulated. Fast forward a few decades, and those incumbent telco/cableco companies still had monopolies (or huge advantages because they had infrastructure built back in the day), but the price regulations were rescinded. IMHO the solution is either: * bring back price controls (with infrastructure upgrades and a modest profit margin taken into account) * force the incumbents to allow ISO Layer 2 access to other companies so there is competition at Layer 3 (IP) The latter is: * https://en.wikipedia.org/wiki/Open-access_network https://en.wikipedia.org/wiki/Open-access_network
Bartweiss 7y ago
> My point is, I don't see how allowing these "exclusive" coverage monopolies does anything but harm the consumer. I imagine a community based provider like the one in the article would be met with a host of legal challenges here. I'm not sure I understand what you mean here. I think the confusion is over exactly what exclusivity AT&T holds? (I don't intend this as a lecture since you may well know all of this, I just want to include the full picture.) In theory, exclusivity is a tradeoff to make regulated markets work. Given a market where they'll be legally required to accept loss-making projects like running service 2 miles for 3 customers, AT&T is persuaded to join by the offer of legally-guaranteed exclusivity. Without that, someone would come and undercut their price in town while refusing high marginal cost customers service altogether. So the idea is that you get access to wiring, in return for AT&T charging higher prices to population-center customers than a competitor might. This works pretty well for some markets. The USPS is required to offer service everywhere, inflicting much higher operating costs than e.g. FedEx, but it gets a partial monopoly via government mail. ILECs did a decent job of getting everyone telephony access, despite later monopoly issues. And regulated utilities (water, gas, sometimes electrical) provide access consistently without extreme pricing abuses. But the mess of internet is that unless the Keys have something strange in place, AT&T is an exclusive telephony exchange there. So they're obligated to get you telephone service, but don't actually have to sell you internet - they just do it when the telephony rules make adding internet affordable. Instead, AT&T has a non-regulated coverage monopoly on internet access. Their telephony monopoly gives them a reason to run wires of some kind to every house, at which point providing internet access is fairly cheap. And while competitors can access their poles, the combination of delays and cabling costs means it's rarely cost-effective to do so. Verizon, Frontier, CenturyLink, and Windstream are all inheritors of telephony monopolies, too. The only major broadband providers who aren't started life as cable companies (e.g. Comcast, CableOne, Altice), which weren't regulated monopolies, but still developed natural-monopoly ownership over large areas, and still create an added reason to run cabling. (Of course, that's enough to create a few large natural monopolies, but it doesn't explain just how crappy things are. ILEC phone carriers should compete with cable ISPs, but outside of Fios intruding on Comcast that's been rare. And ISP pricing/quality is so terrible that in some regions it should still be profitable to eat the fixed costs and compete. As far as I know, that's a story of informal cartel pricing, "make ready" wiring issues, and anti-competitive practices like paying landlords for monopolies. Plus pocketing a small fortune in government funds for network improvements that never came to pass.)
lonelappde 7y ago
How is paying ATT 70k to string fiber different from your city paying 70k to string fiber? That the city can make people who don't live on your peninsula pay for the lines to your house?
- kls 7y ago
  The difference is that ATT owns the fiber after I pay for it and I have no rights or ownership of said fiber. If it has been a municipal endeavor or a non-profit endeavor I would have gladly paid the 70k and wrote off the amount as charitable contributions or state taxed write-offs. Granted I could have written it off as a one time business expense but AT&T still owned what I would have paid for. I get that it is not cost effective, I have no problem with that, and am not under the impression that I am owed service, rather I just find the exclusivity agreements to be restricting competition and locking anyone out of the market that would have been willing to provide me with service at a more affordable rate. Comcast may have quoted me 20k to run the lines, I will never know, as it was not an option.

by kls 7y ago

foobarian 7y ago

> My point is, I don't see how allowing these "exclusive" coverage monopolies does anything but harm the consumer. I imagine a community based provider like the one in the article would be met with a host of legal challenges here. I think the problem that was trying to solve is to avoid the Comcast poles, AT&T poles, Verizon poles, RCN poles and probably others, all strung up with their own networks of cables and wires.

josh2600 7y ago
It’s precisely due to the fact att destroyed competitive telecom equipment and infrastructure at every turn for the last 150 years that we have exclusivity agreements. Att has threatened to break domestic telecommunications over and over again if they couldn’t have monopolies (although now Comcast exercising those same monopolies is hurting att).
kls 7y ago
Funny parts is we actually have that here, the next island over (Ramrod Key), is exclusively Xfinity/Comcast and I believe Key West is split between AT&T, Comcast and Verizon (but most of it is underground there). I am not sure what the upper islands are but I would assume a mix of at least AT&T and Comcast.

millisecond 7y ago

Without the exclusivity agreement, it sounds like you wouldn’t have been reconnected. A community provider probably wouldn’t allocate 70k in capital to bring 3 (potential) customers online. So you’re benefitting by the subsidy of users in denser areas being forced into exclusivity.

smolder 7y ago
How much of that is also a tax write off for the Telco?
dd36 7y ago
It’s not really 70k. It’s probably 15-20k.
snowwrestler 7y ago
Consider what the community is already investing in these people. The street along which those lines were strung probably cost a lot more than 70k to construct and maintain; why would the municipality draw the line at Internet?

throw0101a 7y ago

> My point is, I don't see how allowing these "exclusive" coverage monopolies does anything but harm the consumer. I imagine a community based provider like the one in the article would be met with a host of legal challenges here. This is a holdover from the early days of the phone systems, i.e, 1920s. It is extremely expensive to string cables, and so a whole bunch of companies would install stuff to the most lucrative markets (big cities), go bankrupt, and then there would be all of these cables would be left hanging causing a hazard. So it was decided that only one company would string cables... but that company would have its prices regulated. Fast forward a few decades, and those incumbent telco/cableco companies still had monopolies (or huge advantages because they had infrastructure built back in the day), but the price regulations were rescinded. IMHO the solution is either: * bring back price controls (with infrastructure upgrades and a modest profit margin taken into account) * force the incumbents to allow ISO Layer 2 access to other companies so there is competition at Layer 3 (IP) The latter is: * https://en.wikipedia.org/wiki/Open-access_network https://en.wikipedia.org/wiki/Open-access_network

Bartweiss 7y ago

> My point is, I don't see how allowing these "exclusive" coverage monopolies does anything but harm the consumer. I imagine a community based provider like the one in the article would be met with a host of legal challenges here. I'm not sure I understand what you mean here. I think the confusion is over exactly what exclusivity AT&T holds? (I don't intend this as a lecture since you may well know all of this, I just want to include the full picture.) In theory, exclusivity is a tradeoff to make regulated markets work. Given a market where they'll be legally required to accept loss-making projects like running service 2 miles for 3 customers, AT&T is persuaded to join by the offer of legally-guaranteed exclusivity. Without that, someone would come and undercut their price in town while refusing high marginal cost customers service altogether. So the idea is that you get access to wiring, in return for AT&T charging higher prices to population-center customers than a competitor might. This works pretty well for some markets. The USPS is required to offer service everywhere, inflicting much higher operating costs than e.g. FedEx, but it gets a partial monopoly via government mail. ILECs did a decent job of getting everyone telephony access, despite later monopoly issues. And regulated utilities (water, gas, sometimes electrical) provide access consistently without extreme pricing abuses. But the mess of internet is that unless the Keys have something strange in place, AT&T is an exclusive telephony exchange there. So they're obligated to get you telephone service, but don't actually have to sell you internet - they just do it when the telephony rules make adding internet affordable. Instead, AT&T has a non-regulated coverage monopoly on internet access. Their telephony monopoly gives them a reason to run wires of some kind to every house, at which point providing internet access is fairly cheap. And while competitors can access their poles, the combination of delays and cabling costs means it's rarely cost-effective to do so. Verizon, Frontier, CenturyLink, and Windstream are all inheritors of telephony monopolies, too. The only major broadband providers who aren't started life as cable companies (e.g. Comcast, CableOne, Altice), which weren't regulated monopolies, but still developed natural-monopoly ownership over large areas, and still create an added reason to run cabling. (Of course, that's enough to create a few large natural monopolies, but it doesn't explain just how crappy things are. ILEC phone carriers should compete with cable ISPs, but outside of Fios intruding on Comcast that's been rare. And ISP pricing/quality is so terrible that in some regions it should still be profitable to eat the fixed costs and compete. As far as I know, that's a story of informal cartel pricing, "make ready" wiring issues, and anti-competitive practices like paying landlords for monopolies. Plus pocketing a small fortune in government funds for network improvements that never came to pass.)

lonelappde 7y ago

How is paying ATT 70k to string fiber different from your city paying 70k to string fiber? That the city can make people who don't live on your peninsula pay for the lines to your house?

kls 7y ago
The difference is that ATT owns the fiber after I pay for it and I have no rights or ownership of said fiber. If it has been a municipal endeavor or a non-profit endeavor I would have gladly paid the 70k and wrote off the amount as charitable contributions or state taxed write-offs. Granted I could have written it off as a one time business expense but AT&T still owned what I would have paid for. I get that it is not cost effective, I have no problem with that, and am not under the impression that I am owed service, rather I just find the exclusivity agreements to be restricting competition and locking anyone out of the market that would have been willing to provide me with service at a more affordable rate. Comcast may have quoted me 20k to run the lines, I will never know, as it was not an option.