-----BEGIN PGP SIGNED MESSAGE----- Declan McCullagh wrote:
From: "Dave McClure" <dmcclure@usiia.org> I fear that in the current environment, the answer will be to allow all networks to be closed to competition. That scrunching sound you hear is the door slamming shut on 7,000 independent ISPs. . .
Regards, Dave McClure
[Dave and I generally agree, but we may part paths here. We justify keeping telco lines open because of the ex-monopoly status of the RBOCs, but in the long run hope that those regulations can fade away. --Declan]
I'm afraid I have the numbers to back up Dave.... That's fine in theory, but in your "long run", we are all dead. I'm a partner in an ISP in rural northern Mississippi. We were the first in the region, 7+ years ago, and have been offering DSL about a year. Bellsouth charges ISPs $40 per month, plus $375 installation, for a "dry pair" (alarm equivalent), or $91 per month, plus $2,000 installation, for the "unloaded" version (needed for DSL over more than a few hundred feet of distance). That's a pair with no switch, no user billing, nothing. We have to provide both ends of the equipment, switching, and Internet service from a backbone. Bellsouth went to court to overturn the original FCC determination that a fair price for an unbundled pair would be $15 per month in rural Mississippi (less in more urban states). Bellsouth.net, the unregulated subsidiary, just showed up in several of our towns offering ADSL for $40 per month at 1.5M/256K bps, with higher fees for "business" rates. Calculating costs for upstream, amortizing costs of equipment, and assuming that a T3 will support about 900 DSL users, unregulated Bellsouth.net would have to pay regulated Bellsouth less than $8 per line per month to break even. Since we "know" that Bellsouth.net has very few customers as yet, we can understand that they might operate at a loss for awhile. Still, it would take pretty deep pockets.... But, assuming that they are being charged the tariffed rate for wiring that Bellsouth swore in court papers was needed as a base price, they can NEVER MAKE MONEY. Remember, the Bells were highly subsidized when they started up. They've leveraged that subsidized monopoly into owning all the rights of way, and by statute are exempt from paying to install their lines. We have to pay a monthly fee to the cities per pole and linear foot where we run our lines in parallel, although there is a court case over that in some states. Our barriers to entry are huge. Sorry, but the unregulated regime is killing ISPs, and the tenor has drastically changed now that the baby bells know that the new administration is unlikely to rein in anti-competitive behaviour. -----BEGIN PGP SIGNATURE----- Version: PGP 6.5.1 iQCVAwUBOoLaQ9m/qMj6R+sxAQG0GwQAxIbwK2XfZWABlqcX6k1HvJjiaXDCL+xh 2z2RHcJmG5ZJZdbhKZkaX8VNHvfnrSr04l7uKM9Gge4GgtpwM16ioxm8lVPW+qZT UbY/fE+tjnOEDXEbjLV/dOdZ7IOdrn9uF942VU1h9oXttfKsVku326bl8djS4elQ GMN3bWFWXNw= =rCSF -----END PGP SIGNATURE-----