NoChokePoints Coalition Slams AT&T for Rate Hikes

Last-mile access is about to become a bit more expensive for businesses and wireless carriers.  The real solution here is not more regulation, but competition.  Allow cities and service providers to build their own infrastructure.  Frankly I agree with Frank Simone’s question asking why service providers are not building more fiber access to customers.  The answer is simple.  It is cost prohibitive in most cases.  A carrier could spend more than $10,000 pulling a fiber pair to a building.  They have two options, charge an up-front fee or try to amortize it over a few years.  Most customers will stick with an incumbent carrier rather than pay an up-front fee, and if the carrier amortizes the costs they have no guarantee that the customer will stick with them long enough to make laying the fiber profitable.

I have asked several Tier 2 service providers whether they support municipal broadband networks and they typically state that telecommunications is not a governmental function.  I agree with them, but there is an important difference here.  First of all the government is just leasing last-mile access to the service provider in my model.  They are not actually selling services to customers.  Second I only see these carriers pulling fiber to only the most profitable buildings because of the dilemma I mentioned above.  What about the small independent insurance agent or rural physician that has broadband needs as well?  A few years ago, I worked for a public company with 125 people in a facility and no carrier would bring fiber to our building without a $35,000 initial payment even though fiber ran right down the street we were located.  Perhaps letting the price-cap expire will initiate the deployment of more fiber.

WASHINGTON, June 30, 2010 – AT&T’s special access lines are set for price hikes, and the NoChokePoints Coalition says FCC regulation of this “is essential to the health of our information economy.”

The coalition held a teleconference panel discussion Tuesday to call on the FCC to take action and regulate what it says is a rapidly developing monopoly.

“Move special access back to the front burner,” said coalition Executive Director Colleen Boothby.

When SBC merged with AT&T in 2005 for $16 billion, it became the largest phone company in the United States. When AT&T spent $67 billion to acquire BellSouth in March 2006, it became a telecom giant. As part of the BellSouth merger, AT&T agreed to offer reduced rates on interstate special access services until June 30, 2010. The rates will now return to the original pre-merger rates.

Article Continued on BroadbandBreakfast.com…

About Mark Milliman

Mark Milliman is a Principal Consultant at Inphotonics Research driving the adoption and assisting local governments to plan, build, operate, and lease access open-access municipal broadband networks. Additionally, he works with entrepreneurs and venture capitalists to increase the value of their intellectual capital through the creation of strategic product plans and execution of innovative marketing strategies. With more than 22 years of experience in the telecommunications industry that began at AT&T Bell Laboratories, Mark has built fiber, cable, and wireless networks around the world to deliver voice, video, and data services. His thorough knowledge of all aspects of service delivery from content creation to the design, operation, and management of the network is utilized by carriers and equipment manufacturers. Mark conceived and developed one of the industry’s first multi-service provisioning platform and is multiple patent holder. He is active in the IEEE as a senior member. Mark received his B.S. in Electrical Engineering from Iowa State University and M.S. in Electrical Engineering from Carnegie Mellon University.

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