[IP] SBC in state-level takeover of high speed services

[David Farber <farber@tmail.com>]

-----Original Message-----
From: David S. Isenberg <isen@isen.com>
To: dewayne@warpspeed.com, Dave Farber <dave@farber.net>
Subject: SBC in state-level takeover of high speed services
Date: Thu, 16 Jan 2003 11:25:34 -0500

Dave,
Dewayne,

Below please find two news articles that document a systematic SBC
campaign to pass state laws that would exempt it from opening its high
speed network to competitors. SBC slipped its bill through the 
Oklahoma
legislature 90-2 last year while AT&T's lobbyist position was 
temporarily
unstaffed (not that I am any big friend of AT&T).  It has similar 
bills
in Missouri and Kansas -- the Kansas bill will be heard next 
Wednesday,
Jan. 22 at 9AM in the State Capitol Room 526-S, in Topeka.
(Is SBC aiming at more states?  I do not know.)

I had email correspondence with one Kansas State Senator yesterday who
thought that the bill would only affect DSL competition.  If that was 
its
only effect, it'd be anti-competitive, but relatively benign.  The 
larger
danger is that the bill would give SBC a lock on *all* future 
services.
That is, because fiber carries "DC to daylight" there'd be no economic
motivation for a competitor to build a second fiber.  Thus, sharing
of monopoly-built fiber becomes critical to establishing a robust
competitive marketplace.  Once built, the fiber even has the potential
to supplant existing cable TV service.

Here's a plausible scenario:  Want to have direct access to your ISP?
Sorry, you have to accept the "bundled" SBC ISP.  Want to add a 
wireless
access point that your neighbors might use?  Sorry, prohibited under 
SBC
terms of service.  Want to host content from your home?  Sorry.  Fixed
IP address?  It'll cost you.  Peer-to-peer file sharing?  
Fuggedaboudit.
100 megabit connectivity?  Gigabit maybe?  Sorry, you're using ADSL 
sucka.

Now, none of these things are, of themselves, necessarily bad -- if 
they
can fly in a competitive marketplace.  But without competition, SBC 
will
restrict service to preserve its vertical value chain.
That is, the SBC bills under consideration in Kansas and Missouri, and
passed in Oklahoma would ensure SBC's future as a monopoly --
because it would render further competition in underlying connectivity
economically impractical.  And if you don't have a competing fiber, 
SBC
functions as gatekeeper for all service-level competition.

Here are the critical words from the Kansas bill:
> New Sec. 2. (a) Notwithstanding any ruling or order to the contrary,
> the state corporation commission shall not, by entering any order, 
> adopting
> any rule or otherwise taking any agency action, impose any regulation
> upon a provider of high speed internet access service or broadband 
> service
> in the provider’s provision of such service, regardless of 
> technology
> or medium used to provide such service.

The full bill is here:
http://www.kslegislature.org/bills/2004/2019.pdf

Here's a story about the three-state campaign
http://tinyurl.com/4iqg

And here's a story about Missouri
http://tinyurl.com/4is7

And here's one that captures the CLEC and ISP view
http://tinyurl.com/4isb

David I
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-- Dave

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