Sleepycatz

I sold my soul to the company store

A few days ago Senator John Ensign (R-NV) introduced a b ill which would eviscerate the ‘96 telecommunications act, eliminate local cable franchises, and ban municipal networks - Reuters.com. Ensign’s bill is perhaps the greatest gift to the ILECs that any corporation could receive — an unregulated, unfettered monopoly.

In today’s Washington climate of graft and backroom bids one might ask “What’s the big deal? Just another senator helping out a major corporation or two — no different then Haliburton or Boeing.” In fact it is an enormous deal. Contracts to Haliburton and others can be viewed as a kind of one-off corruption. Ensign’s bill, on the other hand, is more akin to systematic and permanent corruption. At a time when the US manufacturing base is disappearing and Internet and telecommunications knowledge is becoming a required job skill, it is unconscionable that a member of the US Senate would seek to limit access and innovation.

Yes, Ensign and the executives of SBC and Verizon, et. al, all say they need to eliminate the open network access provisions of the ‘96 law in order to invest in new technologies. But history has shown that monopolies, particularly in telecommunications, have never pursued innovation unless forced to by competition. We need only look back 10 years at the history of high-speed Internet access to see this is true. In the mid-90s the newly evolving CLECs (competitive local exchange carriers) saw a way to bring high speed, low cost, data access to small businesses and residences through DSL. The technology of DSL had been around for over 20 years, but none of the major carriers saw any need to deploy low cost data transport — after all they were making good money selling digital service circuits, like DS0 and DS1 lines. Why innovate if you don’t have to? Because telecommunications drives other markets. Without the low cost data transport of the mid-90s, we would not have had the birth of the Internet economy; cable carriers would not have had as much demand to add DOCSIS services to their networks, and Apple and others would have had little reason to push development of new consumer goods, such as the iPod.

Now is the time for the next round of innovations, and the major carriers want to make sure they have no competition this time. At SuperComm this year it was estimated that we are less then one year away from seeing a large scale deployment of IPTV. IPTV is the short hand way of saying televised video content which will be provided over an IP network (ie. the Internet). By using this technology, the ILECs believe they can crush the cable operators — who have taken away their data business. IPTV will require more bandwidth then currently available to the average home, thus enter ADSL2+. ADSL2+ is a method which will allow very hi-speed data service to the home — in excess of 20Mb/sec. The problem with ADSL2+ is that it is very limited by distance — thus the October ‘03 gift to SBC.

So what the hell does all this have to do with Sen. Ensign’s bill. Simple, the ILECs want a complete monopoly over all voice, television, and data services — and Ensign’s bill gives them the first and most important steps towards it. By eliminating the shared network provisions, the bill guarantees that the ILECs have no competition on the common copper networks that feed 99% of the homes in America. By eliminating local control and bypassing cable franchises, the bill allows the carriers to service only those neighborhoods they find profitable. Cable providers, on the other hand, would have to continue to negotiate easements and access from cities, and from the ILECs (as they own around half of the poles and aerial feeds in most cities). Thus a city could, and would demand, that high-speed Internet access be available to low income areas from cable providers, but now from the local phone provider. Finally, Ensign’s bill ensures that no municipality could compete with the ILEC. Many cities, having felt poorly served by their local carriers, have been investigating locally owned and operated data and voice networks — these would be illegal under Ensign’s bill. All and all, these provisions will create a television, voice, and data network without competition or regulation. In the end this means that telecommunications technology will stagnate and consumer pricing will increase, and consumer choice will decrease.

Why would Ensign introduce such legislation now? Who knows — perhaps it has something to do with the $30,000+ given to him by SBC for his ‘06 reelection campaign(note: AT&T wireless is part of Cingular, which is part of SBC). Perhaps not. I always find it odd that those who always stand and cry out in praise of the free market are always the ones who want to eliminate the competition of large corporations.

In the end it’s hard to tell if Ensign’s bill will pass. If it fails, it won’t be because congress finds some mystical connection with consumer choice or the need to encourage telecommunications competition and diversity; rather, it will be the pressure brought by the cable operators claiming that congress is giving their competition an unfair advantage. Congress can eliminate that concern, of course, by nullifying all local cable franchise agreements, which would leave many cities in financial trouble. But, hey, in the pursuit of a monopoly who are we to stand in the way as two giant industries battle it out.

This entry was posted by steve on Sunday, July 31st, 2005 at 4:30 pm and is filed under Internet, Politics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.