6 ms·

"there will be no rate regulation, no tariffs, no last-mile unbundling" Translation?

gergles 12y ago
Title II as written requires that rates be filed with the FCC and approved by the FCC (tariffs & rate regulation, respectively). Last-mile unbundling would force the people who currently run lines into your house to let other providers sell services over those lines. These regulations that are part of the law are all going to be removed as part of a process called "forebearance", where the FCC can basically not enforce those parts if they feel it would be contrary to their overarching goal of increased broadband adoption in the country.
- jonny_eh 12y ago
  "removed … not enforce … contrary", I am so confused. So does this mean that the FCC will force Comcast to allow competition to operate on the existing last mile of cable for broadband?
  - robkix 12y ago
    No, it means the last mile remains exclusive to the provider.
rayiner 12y ago
Title II includes several sorts of provisions that apply to "common carriers" very similar to, e.g., how railroads were regulated back in the day. The government sets the prices for carriage (rate regulation), and carriers have to lobby the government to change prices (tariffs). Last-mile unbundling means that carriers must lease out their physical infrastructure to competitors at some wholesale price. These things are bad, which is why the FCC is saying it will not apply these provisions. For example, even today most municipalities set a regulated rate for basic cable service. It averages about $20/month nationwide, and doesn't come close to covering the cost of actually building a modern cable network out to a neighborhood. Unbundling kills investment into the network, because why spend billions of dollars on infrastructure that you'll have to lease out at wholesale prices to your competitors?[1] My theory is that unbundling is what killed DSL as a competitor to cable here in the U.S. FTTN has been quite successful in the U.K.,[2] as a gradual scheme for building fiber further into the network, with a last-hop of VDSL that can get faster as it gets shorter. There has been little FTTN deployment here in the U.S., because there's just no way for telcos to recoup the billions of dollars spent on fiber if they're forced to lease the VDSL at the other end to competitors for a song. [1] See this Brookings Institute (not exactly a conservative hotbed) analysis, which calls the U.S. experiment with unbundling "disastrous" and concludes that it reduces capital investigate. http://www.pff.org/events/eventpowerpoints/022207BrusselsComm/Crandall.ppt http://www.pff.org/events/eventpowerpoints/022207BrusselsCom.... [2] Unbundling is part of the strategy in the U.K. too, but it's structured so that the prices BT charges to competitors are guaranteed to generate a substantial profit.
- angersock 12y ago
  You appear to be quite against this (judging by your other posts on the matter). The fact remains that the current system is not going to hold, and that left to its own devices will end up with a bunch of walled gardens and other issues. I agree that it is wise to be wary of regulation in this case--but honestly, I think it's time we at least experiment. The market and regulatory forces at play have basically forced themselves into this position.
  - rayiner 12y ago
    My complaint is that everyone's ignoring the economics of the situation. What becomes apparent if you dig into the numbers is that there's no money in building these networks, at least at scale--they are justified only when there's a money-making opportunity with respect to the content flowing through them. Historically, this has been the cable video service that brings in the lion's share of revenue. Even with Google--I have yet to see a story for the profitability of Fiber that isn't predicated on the nexus with Google services. You can't legislate-away economics. If you make cable and fiber networks into an unattractive investment, nobody will invest in them, and they'll go on life-support just like the phone network. Cable companies will pivot to content, like Comcast is already doing with its purchase of NBC. The vacuum won't be filled, because at the end of the day no VC is going to put up billions of dollars to eke out shit returns on a heavily-regulated service.
    - angersock 12y ago
      Now, what is the way we've historically dealt with goods that aren't worth money but are required to for the general welfare...a sort of public good, if you will. What was the organization usually tasked with public goods, again? The way we got the buildout of the telephone networks was the creation of the AT&T monopoly by the government, and they took their job seriously. An alternate approach would be nationalizing it and forcing the government to take care of it. Free market isn't likely to fix the problem.
    - OrwellianChild 12y ago
      I understand that there may be some "hidden costs" that current consumers of broadband in the US don't see. I can also imagine the possibility that un-bundled broadband may be more expensive than current rates (though I can imagine other possibilities as well). What I have a hard time understanding is your implied argument here: that by forcing a bundle on consumers that includes a high-margin product (cable TV) as well as a low-margin one (broadband), we're doing those consumers a favor. How do I benefit from a subsidized broadband service if I also have to participate in the over-priced and unwanted service that is allowing the subsidy?

Title II as written requires that rates be filed with the FCC and approved by the FCC (tariffs & rate regulation, respectively). Last-mile unbundling would force the people who currently run lines into your house to let other providers sell services over those lines. These regulations that are part of the law are all going to be removed as part of a process called "forebearance", where the FCC can basically not enforce those parts if they feel it would be contrary to their overarching goal of increased broadband adoption in the country.

jonny_eh 12y ago
"removed … not enforce … contrary", I am so confused. So does this mean that the FCC will force Comcast to allow competition to operate on the existing last mile of cable for broadband?
- robkix 12y ago
  No, it means the last mile remains exclusive to the provider.

rayiner 12y ago

Title II includes several sorts of provisions that apply to "common carriers" very similar to, e.g., how railroads were regulated back in the day. The government sets the prices for carriage (rate regulation), and carriers have to lobby the government to change prices (tariffs). Last-mile unbundling means that carriers must lease out their physical infrastructure to competitors at some wholesale price. These things are bad, which is why the FCC is saying it will not apply these provisions. For example, even today most municipalities set a regulated rate for basic cable service. It averages about $20/month nationwide, and doesn't come close to covering the cost of actually building a modern cable network out to a neighborhood. Unbundling kills investment into the network, because why spend billions of dollars on infrastructure that you'll have to lease out at wholesale prices to your competitors?[1] My theory is that unbundling is what killed DSL as a competitor to cable here in the U.S. FTTN has been quite successful in the U.K.,[2] as a gradual scheme for building fiber further into the network, with a last-hop of VDSL that can get faster as it gets shorter. There has been little FTTN deployment here in the U.S., because there's just no way for telcos to recoup the billions of dollars spent on fiber if they're forced to lease the VDSL at the other end to competitors for a song. [1] See this Brookings Institute (not exactly a conservative hotbed) analysis, which calls the U.S. experiment with unbundling "disastrous" and concludes that it reduces capital investigate. http://www.pff.org/events/eventpowerpoints/022207BrusselsComm/Crandall.ppt http://www.pff.org/events/eventpowerpoints/022207BrusselsCom.... [2] Unbundling is part of the strategy in the U.K. too, but it's structured so that the prices BT charges to competitors are guaranteed to generate a substantial profit.

angersock 12y ago
You appear to be quite against this (judging by your other posts on the matter). The fact remains that the current system is not going to hold, and that left to its own devices will end up with a bunch of walled gardens and other issues. I agree that it is wise to be wary of regulation in this case--but honestly, I think it's time we at least experiment. The market and regulatory forces at play have basically forced themselves into this position.
- rayiner 12y ago
  My complaint is that everyone's ignoring the economics of the situation. What becomes apparent if you dig into the numbers is that there's no money in building these networks, at least at scale--they are justified only when there's a money-making opportunity with respect to the content flowing through them. Historically, this has been the cable video service that brings in the lion's share of revenue. Even with Google--I have yet to see a story for the profitability of Fiber that isn't predicated on the nexus with Google services. You can't legislate-away economics. If you make cable and fiber networks into an unattractive investment, nobody will invest in them, and they'll go on life-support just like the phone network. Cable companies will pivot to content, like Comcast is already doing with its purchase of NBC. The vacuum won't be filled, because at the end of the day no VC is going to put up billions of dollars to eke out shit returns on a heavily-regulated service.
  - angersock 12y ago
    Now, what is the way we've historically dealt with goods that aren't worth money but are required to for the general welfare...a sort of public good, if you will. What was the organization usually tasked with public goods, again? The way we got the buildout of the telephone networks was the creation of the AT&T monopoly by the government, and they took their job seriously. An alternate approach would be nationalizing it and forcing the government to take care of it. Free market isn't likely to fix the problem.
  - OrwellianChild 12y ago
    I understand that there may be some "hidden costs" that current consumers of broadband in the US don't see. I can also imagine the possibility that un-bundled broadband may be more expensive than current rates (though I can imagine other possibilities as well). What I have a hard time understanding is your implied argument here: that by forcing a bundle on consumers that includes a high-margin product (cable TV) as well as a low-margin one (broadband), we're doing those consumers a favor. How do I benefit from a subsidized broadband service if I also have to participate in the over-priced and unwanted service that is allowing the subsidy?