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.

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Hoyle to municipal broadband: Drop dead

Last Wednesday, state Sen. David Hoyle, D-Gaston, unveiled a bill that if passed, would severely restrict North Carolina municipalities attempting to build their own broadband network. Supported by the powerful telecommunications companies, the bill would interminably delay or even halt public broadband projects.

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FCC Chairman Genachowski expected to leave broadband services deregulated

Washington Post Staff Writer
Monday, May 3, 2010

The chairman of the Federal Communications Commission has indicated he wants to keep broadband services deregulated, according to sources, even as a federal court decision has exposed weaknesses in the agency’s ability to be a strong watchdog over the companies that provide access to the Web.

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