IP: Re FCC appears poised to kill reciprocal compensation

[Dave Farber <dave@farber.net>]

>Date: Fri, 20 Apr 2001 09:29:57 -0400
>To: farber@cis.upenn.edu, ip-sub-1@majordomo.pobox.com
>From: "David P. Reed" <dpreed@reed.com>
>
>
>I sympathize strongly with Glass's opinion (though he puzzled my by 
>misstating the source of the political pressure - it comes from the huge 
>ILECs, not the CLECs).
>
>But keeping reciprocal compensation is only a palliative measure against 
>the more dangerous problem - the web of regulations at town, state, and 
>federal levels that limit competitors from creating new, more effective 
>local-loop access network architectures.  This creates localized monopoly 
>power that prevents innovation in the access area.
>
>Killing reciprocal compensation, while keeping these regulations in place, 
>will indeed be anti-competitive and anti-innovation, ultimately 
>anti-consumer.  But a fair trade - eliminating reciprocal compensation 
>while at the same time allowing more access for competitors into the local 
>access network as I suggest shortly - would do everybody a lot of good, by 
>stimulating innovation, unblocking new services, and eventually lowering 
>prices.
>
>As an example, if I can figure out a way to wire a neighborhood more 
>efficiently than the current phone company technology (wireless Ethernet 
>being one starting place), why shouldn't I be able to go into business *in 
>that neighborhood* and offer "first mile" connectivity to any and all 
>CLECs that want to drum up business there?  I would then create a 
>competitive structure at a much finer grain than today's "Central Office" 
>structure.  Which would give me and my technology partners a huge 
>incentive to compete against the local telco.  Besides technology, we 
>could experiment with adapting rate structures to customer needs (for 
>example, we could offer charging plans like the cellular companies do, 
>that have much more variety and customer benefit.)  And we could create 
>the economic structure that would allow much faster innovation (wireless 
>Ethernet is on a much steeper capacity growth curve than current DSL-like 
>infrastructure, just as wired ethernet is).
>
>Those are just the first of the benefits we might see.
>
>Though the current Bush administration is supposedly more oriented towards 
>free market solutions, it does not seem that it is interested in 
>entrepreneurial free markets - just free markets as long as the incumbents 
>maintain their special privileges.



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