IP: DSL Prime SBC to Hollywood: Pay us

[David Farber <dave () farber net>]

> > Date: Mon, 27 Aug 2001 19:30:56 -0400
> > From: Dave Burstein <dave () dslprime com>
> > http://www.dslprime.com/News_Articles/Subscribe_/subscribe_.html
> >
> > Sony and the rest of Hollywood plan to distribute movies on the
> > net. SBC plans to block anyone distributing movies without giving
> > SBC a major cut. SBC's "Contract Killer" is circulating, keeping
> > ISPs off of SBC's video speed channel to the home.  Verizon is
> > taking the opposite approach, with Tom Tauke promising "If you're
> > a content provider or ISP, you'll have open access to our
> > network, with non-discriminatory treatment, terms and
> > conditions."
> >
> > Hollywood now has extraordinary incentive to bring their lobbying
> > power into play, starting by blocking the Bells move to eliminate all
> > regulation in D.C., Tauzin-Dingell.
> >
> > Mike Powell can immediately take two actions:
> >
> >  Enforce ordinary truth-in-advertising and anti-fraud laws,
> >  requiring SBC (and the other providers) to reliably deliver the
> >  1.5 meg speeds promised.
> >
> >  Make sure ISPs and content providers can connect at those
> >  advertised speeds, without unreasonable tolls. This open
> >  access at the edge is the only practical way to have a network
> >  running at 1.5 meg. Full-screen video requires about 1
> >  meg, and that's the real definition of advanced services.
> >
> > Who controls the fast Internet will be a leading freedom of speech
> > issue for the next decade. Our report on SBC, Verizon, and how to
> > ensure the future is below.
> >
> > Verizon: We'll be open Tom Tauke, a ex-congressman, is Verizon's lead
> > in D.C. We will, of course, wait for the details, but we applaud the
> > principles he articulated:
> >
> > "As we change our networks to offer broadband, we're assuring every
> > competitive carrier that they can either resell our services or use
> > out network facilities to get access to any customer.
> >
> > - If you?re a content provider or ISP, you'll have open access to our
> > network, with non-discriminatory treatment, terms and conditions.
> >
> > · If you're a consumer, you'll have access to more affordable
> > broadband connections as mass deployment drives down the price points
> > to more reasonable levels.
> >
> > · If you?re sitting on the next great ?killer app,? you?ll have access
> > to the kind of mass market the broadband world has been waiting for.
> >
> > · And no matter who you are or what your role in the digital economy,
> > you?ll finally have access to the next generation of innovative,
> > life-enhancing services, content, software -- all made possible by the
> > power of broadband.
> >
> > Verizon wants to be part of this revolution. For millions of
> > households and businesses, our networks can be the infrastructure that
> > carries the next wave of the Internet revolution into their lives."
> >
> > SBC "Contract Killer" means they want control That is clearly their
> > strategy - block incoming video by refusing quality of service, but
> > provide that quality to controlled "value-add" services that pay them
> > well. The cable guys call this a "walled garden", but I think walls
> > like that resemble a prison - or the old East Berlin. The network
> > designs, wall street statements, public plans, official testimony -
> > and many not for attribution comments - have made the conclusion
> > unmistakable. The telcos (SBC in the lead) want to erect toll barriers
> > on the net, making "MovieFly" and other video programming impossible
> > to deliver without large payments to the telcos.
> >
> > Frontpage headlines covered when Time Warner dropped Disney from
> > cable systems, as they should, and politicians screamed. But most
> > decisions are hidden - I was the only reporter asking questions at
> > an FCC hearing where SBC claimed that projects like MovieFly were
> > economically impossible if they were to build Project Pronto. The
> > studios are big enough to fight back, but we all must fight to
> > make possible other voices who can create video channels - your
> > church, college football team, local town, professional
> > association, preferred language, political beliefs.
> >
> > Americans watch television far more than they read. As technology
> > brings down the cost of delivering video, access to the fast internet
> > pipes will become a crucial freedom of speech issue.  This is far more
> > than an obscure business dispute, although I too think it crucial to
> > keep ISPs alive. It also is essential to the business plans of anyone
> > in TV and video. Craig Barrett of Intel and Steve Ballmer of Microsoft
> > both recently identified the slow growth of the fast net in the US as
> > devastating. Korea and Canada are already far ahead, and Japan and
> > Germany look to be on track to pass us in the next year and accelerate
> > from there.
> >
> > ISPs to SBC: Let us stay alive!
> > The California and Texas ISP Associations are up in arms, as their
> > members are fighting for their continued existence. We have been
> > reporting for over a year that the bells have priced ISPs out of the
> > industry, charging them a "wholesale" rate of $30-35, more than Bell
> > Canada charges at retail, and nearly twice what Deutsche Telekom is
> > charging ($18 or less). The result has long been clear - rhetoric
> > about open access and a consumer choice of ISPs was hollow. But ISPs
> > been unable to get together to fight back - bringing them into an
> > association has been like herding cats. So they have been dying, one
> > by one, with bleak prospects for all as the Internet moves to
> > broadband.
> >
> > SBC is planning to offer services over DSL they have been
> > specifically denying to the FCC are possible. John Britton of SBC
> > told TechTV "ISPs will continue to be the access point to the
> > Web, but there are going to be emerging, non-Internet broadband
> > applications, such as entertainment offerings like movies on
> > demand and interactive games," Britton said. "The DSL customer
> > will not just have the Web Channel One, but they'll have Channel
> > Two movies on demand, Channel Three interactive games, and who
> > knows where it will all grow from there." Video, of course,
> > requires a reliable service speed - the service would be
> > unmarketable if congestion caused significant dropouts. That
> > reliable service is exactly what SBC has been telling regulators
> > it cannot provide to competitors through Project Pronto.  The
> > result - no competition in advanced services over the phone
> > network.
> >
> > In reality, today's DLC/remote terminals can be ordered with
> > enough capacity to offer reliable, non-blocking service, at
> > virtually the same installed price. SBC's Pronto suppliers could
> > easily deliver a unit that would allow competitors to also offer
> > video, high speed gaming, and voice. Their refusal to install
> > such a system will cripple their own offerings promised above,
> > per discussion with their own network people, and so we have to
> > assume they plan to upgrade. Means their current equipment
> > decisions are stupid (field upgrades are much more expensive),
> > they are lying about their service intentions, or they are
> > deliberately designing Pronto to rule out competition. We do not
> > believe SBC is stupid.
> >
> > Editorial: Powell, don't let them choke the Internet
> >
> > Mike Powell, FCC chair, last year told me he expects the net to enable
> > more program diversity and competition in the next few years. I
> > replied it won't happen if the current plans to erect toll booths on
> > the Internet are blocked, and he said he hopes that not how things
> > would work out. Video requires reliable speeds of about one meg,
> > easily delivered to most DSL customers.
> >
> > Here's some practical ways for Powell and others to make the future
> > work:
> >
> > * Enforce ordinary truth-in-advertising and anti-fraud laws against
> >   deceptive broadband providers. They all advertise and promote their
> >   internet services, and claim high speeds. In SBC's case, 1.5M or
> >   6M. Of course they can't guarantee the speed of the Internet (or
> >   break the laws of physics for long connections). They can and should
> >   be required to actually deliver those speeds through their
> >   networks. The original Pronto specifications, according to an
> >   official SBC spokesperson, were to "reliably deliver the 1.5 and 6
> >   meg"
> >
> > * Allow others to connect at their network speed. They cannot meet
> >   the legal requirement to deliver the speeds advertised without
> >   defining points at which they will accept traffic at that
> >   speed. They must define points where others - ISPs, Sony's MovieFly
> >   video service, Akamai - can provide the content at that speed. It is
> >   simply deceptive advertising to speak of high-speed Internet and not
> >   accept traffic at that speed. If the telcos create such peering
> >   points, others will bring the traffic to them - and share the cost.
> >
> > * Carefully monitor prices in near-monopolies. Enforce anti-trust. As we
> >   write above, a key obstacle to competition is the prices of the
> >   unbundled elements necessary to purchase from the phone
> >   companies. They have been set at levels that make competition
> >   difficult or impossible in most cases. This is clear in DSL, where
> >   ISPs dealing with the telcos are charged wholesale prices for DSLAM
> >   access that are twice as high as Germany and more than Bell Canada's
> >   retail charge including ISP service. Result - three years of
> >   rhetoric from the bells about "open access", but they control 90% or
> >   so of the ISP customers.
> >
> > * Hold hearings to get the hidden facts. An FCC hearing this spring
> >   provided the facts that made this reporting possible, where SBC
> >   provided answers they had previously refused to reporters. "You'll
> >   never get any information from SBC" I was told separately by the
> >   telecom reporters of two of America's most respected newspapers, and
> >   this is information we need to know to make public policy. SBC is
> >   not the only company hoping the world makes decisions based on lies
> >   in their press releases - the real information is very hard to
> >   find. SBC is not evil incarnate, nor are the other companies in this
> >   business necessarily better.
> >
> > * Reporters should do their jobs and get the information anyway. I know
> >   how hard it is to find information the companies are trying to hide,
> >   but often it's available. I found my absolute confirmation that SBC
> >   would not provide outside ISPs service at an FCC hearing on remote
> >   terminals, where they testified they could not reliably deliver even
> >   half the 1.5 meg speed advertised. A month later, SBC widely briefed
> >   the press on how they themselves would be offering video reliably
> >   delivered at rate they claimed was impossible.
> >
> > Copyright 2001 Dave Burstein. Volume 2, #40 August 24, 2001 DSL Prime
> > is free - pass it on. Brief excerpts may be reproduced if credit is
> > given and a copy sent to us. We are journalists, not investment
> > advisers; invest at your own risk and do further research.



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