ON FCC AND "NAKED DSL"

TWO STEPS BACK...

In the "will-our-regulators-ever-get-a-clue?" department (as Slashdot would put it), the FCC Friday ruled against "naked DSL", i.e., the ability for a telco customer to get DSL broadband service WITHOUT also subscribing to its phone line services.  Specifically according to the Wall Street Journal

The Federal Communications Commission, by a 3-2 vote, said states can't force the Bells and other phone companies to provide high-speed Internet service to customers who use competitive carriers for their voice service.

The agency on Friday granted a petition that BellSouth Corp. filed in December 2003 after Florida, Georgia, Louisiana and Kentucky required it to provide digital-subscriber-line, or DSL, services to customers who used competitors for voice calls or who relied exclusively on cellphones for voice calls.

Now consider the irony of the situation.  In New York City, Verizon is offering me the ability to buy internet telephony for $30/month through by DSL broadband connection, for which I'm paying $30/month.  Now, if as a rational consumer, I now wish to disconnect my analog "old phone" line from Verizon, to save anywhere from $20-30 a month, Verizon is fully empowered under the new FCC rules to disconnect by DSL broadband and internet phone!  Talk about a Catch-22 to make Joseph Heller proud!!

This is the opposite of what's going on in Canada, where Bell Canada announced its "naked DSL" offering:

Bell, in a letter dated Sept. 15 to the Canadian Radio-television and Telecommunications Commission, committed to coming out with so-called naked DSL by March of this year. It will mean that customers who want to use their mobile phone or a Voice over Internet Protocol product as their primary phone service won't have to pay $23 or more for a local line they don't plan to use.

If you have the stomach for more pain, CNET has a good article describing the machinations within the FCC and the lobbying by the telcos that went into this decision.  Kevin Werbach has a more dire prognostication which may overstate the case but captures the spirit of the issues from a consumer viewpoint.

This again highlights how telco lobbying wins it near-term dividends as Bill Gurley on his blog describes in detail how the telcos are lobbying, and in some cases winning, against state and local municipalities' ability to offer WiFi (wireless) broadband service. 

I don't know if the "naked DSL" issues cuts both ways, i.e., can a cable customer get cable broadband WITHOUT cable TV service...it's apples to oranges since you can't use cable broadband for TV service, but that day is coming soon...in any case, it'll be interesting to see if the telcos lobby against the cable industry and for "naked cable broadband", as and when they start to offer TV programming over fiber to the home connections in a few years...won't that be thick with irony?

For now, one more battle is lost, but the war will ultimately be won by technology-driven free market forces; they will make all the lobbying in the world moot over time...we'll just have to bide our time...and some may choose to do from Canada...again.

 

Comments

[robocoder]

I'm told you can get cable broadband Internet without cable TV service. The cable co. installs filters.