Re: U.S. Finance Sector Weighs In on Net Neutrality

[Kevin McAleavey <kevinmca () nsclean com>]

 Heh. There's several issues at play with telcos here in "Los Estados Unidos" ("Mi Casa es su casa" says fearless 
leader) ... they are what is called "regulated monopolies" and as such are entitled to a regulated "guaranteed rate of 
return" and therefore not subject to the usual marketplace forces. Deregulation has been a miserable failure as well as 
most other aspects of "free marketplace" have proven over the last 25 years ... wonder why petrol costs what it does? 
Speculators on the U.S. Commodities exchange who, when they get a whiff of "instability" bid up the prices on "crude" 
... nevermind that the shortages here are the result of a lack of refining capacity and NOT a shortage of crude ... 
they stain their drawers every time Osama puts a videotape on Al Jazzy and bid the price up.

 Same deal with the telcos. They're back, hat in hand, before the regulators looking for some additional "rate of 
return." REAL problem is that residential DSL is WAY below fair market value (called "dumping" in international trade 
circles) and are now trying to make up the difference as folks use the "cheap oil" of below-cost DSL services to make 
phone calls which was before their "cash cow." I've said before, I worked in a regulatory agency in telecoms as an 
engineering type - my job was calling "bullsquirt" when the telcos said that a toll or number 5 switch could not be 
expanded and that there was less than 24 64k muxes on a T-1 and such.

 To ANYONE with a clue (which kinda leaves US government out of the picture entirely) what they're attempting to do 
here is a "cost reallocation" (there's an official word for this, but I've been out of the "rocks float by edict" world 
for ten years now) by trying to move these costs from their landline telephone business onto their "below cost" DSL 
services to the masses. Since DSL is now replacing "local plus long distance revenues" for their "nut," what would be 
more economically valid is going to "full cost-based market rate" on DSL, but they're loathe to. And to further 
complicate matters, the "regulated" part of their business is standard telephony which is now in decline.

 But there's the problem, it's all about them stockholders and trying to explain why the dividends are down and the 
costs are up. Regulators on the other hand are perfectly willing to ensure that "rate of return." The alternative is 
deregulation WITH OVERBUILDING so that you can sign up with any of multiple telcos with "FACILITIES-based competition." 
That was the original plan of deregulation, but it never really happened. Same for the cable TV industry. You don't see 
one company overbuilding another there either. And I don't want to hear "but I can get AT&T on my Bellsouth or another 
telco if I want." Who owns the WIRES? That's what's regulated. The current argument is "telcos and cable companies and 
satellite all compete and have practically overbuilt one another for goods and services." When I can get TV from 
Verizon here where I live, or the cable company is willing to wire up the woods, I'll buy that. I get my TV from a 
pizza pan and I'm on dialup. Bottom line, bend ove!
 r, here come the politicos and combined together, their IQ is below their hat size. All for sale!   :)

At 02:09 PM 5/3/06, Drsolly wrote:
> On Wed, 3 May 2006, Greg Poirier wrote:
>
> > On Wed, 2006-05-03 at 14:32 +0100, Drsolly wrote:
> > > So, if you take Sourceforge, for example. If ATT (or whoever sells them
> > > packets) decide to bump up their hosting cost substantially, they'll look
> > > around for a competing provider, and they'll find one, even if they have
> > > to relocate. And on the internet, relocating isn't difficult.
> >
> > I think I've been thinking of this the wrong way.  It isn't about
> > increasing the cost of bandwidth, really.
>
> Well, that's a pity. I'd quite like to buy bandwidth at the same price 
> that Google pays.
>
> > I think what is at stake here are provisions made in Part II of the
> > Communications Act of 1934 (as ammended by the Telecommunications Act of
> > 1996) that provide for non-discriminatory charging practices by Local
> > Exchange Carriers and Common Communication Carriers (phone, cable
> > companies and other bandwidth providers I believe are included in the
> > definition of these terms).  
> >
> > > But this is already in place. What I find hard to fathom, is what *change* 
> > > is proposed.
> >
> > Currently, I believe communications providers are prohibited from using
> > equipment or any other means to purposefully slow down access to
> > competitors.  
>
> So all the people selling "packet shaping" equipment better make sure they 
> don't sell to ISPs, right? 
>
> No - if I buy 1 megabit, I don't really expect to get more than 1 megabit, 
> even though it means that when my pipe is saturated, access to my server 
> will get slower.
>
> > Without these provisions, there is nothing stopping Bell South from
> > disallowing access to Yahoo or Google's portal pages for all of its
> > customers.  I think Bell South may lose customers if they did something
> > like that, but right now that's what they can't do and what they'd be
> > able to do should Net Neutrality(tm) be abandoned.
>
> I'm still having trouble understanding this whole issue. If its about 
> banning discriminatory pricing, then it flies in the face of all normal 
> commercial practice. You simply do not charge everyone the same price. 
> For example, people who buy big volume, usually get offered a better 
> price.
>
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----------------------------------------------------
 Kevin McAleavey at your service
 Privacy Software Corporation
 http://www.nsclean.com
 kevinmca () nsclean com


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