US/ND-1: Re: universal service vs. public sector service
Re: universal service vs. public sector service
Rex Buddenberg (budden@nps.navy.mil)
Wed, 28 Aug 96 14:30:32 -0700
>
> Also I haven't noticed a difference when referring to the ISPs and the
> telephone company connections. My undertstanding is that while the telcos
> are regulated by the FCC, an ISP that isn't a telco company doesn't have
> any regulatory agency at all.
>
> Sally Hawkes shawkes@comp.uark.edu
Sally,
This is an important distinction in the discussion.
The telcos are indeed regulated ... at least some of them
are. MCI and Sprint don't fall under the same set of rules
as AT&T does ... that's one level of complexity.
Worse, just because things get deregulated at
the federal level (and there's some debate whether the
Act does/will indeed do that) doesn't have any effect
whatever on the 51 state PUCs that set rates for the RBOCs.
Now, a bunch of extra-telco externalities that have everything to
do with the issue of getting economical internet access
widely proliferated:
- ISPs are indeed unregulated and the Dereg Act doesn't
change that at all. ISPs resell telco connectivity plus a bunch
of other services. Most of the RBOCs now have ISP subsidiaries,
but they are set up as separate corporate entities _outside_
the regulatory PUC framework. So they are free to compete with
the independent ISPs (that shakeout is going to be bloody and
it's not at all clear who will win out).
- technologically, cable TV is likely to be a major competitor
for Internet access. With the exception of @Home, none of
the CATV companies that I've seen have a clue on what internet
services are. Access yes, services ... hardly. The federal
regulatory structure for CATV regulates television provision
rates, not 'value added services' which is where Internet access
would fall.
- terrestrial wireless providers like Metricom appear
to be focussed on urban markets (which are the easiest places
to get copper or fiber to), so their value for applications
not specifically mobile aren't clear. But these are entirely
unregulated industries (aside from the issue of FCC providing
some unlicensed spectrum).
- a whole bunch of Internet infrastructure for school,
library, ... and commercial installations ... is owned by the
user. LAN cabling, usually the router, local management, ...
and all the services you hang off your local network (WWW servers,
for instance). None of this part is regulated ... this is
the product end of a highly competitive industry.
All this makes me wonder at how much leverage we think we can
get by diddling with the tariffs. No amount of fiddling within
the Telecom Dereg Act can have any effect on the discounts we
might get for routers or domain name service from an ISP or
Cat5 cable we get from an electrical contractor.
And the leverage decreases as we get rural. Radio-WAN
service from the likes of Low Earth Orbit satellite vendors
will be reality in a couple years as Loral, Motorola and TRW
bring their systems on line ... and very practically within
5 as Teledesic comes up. These guys are already bandying
about their rates and their marketing departments are busily
undercutting each other -- as long as there are >2 vendors out
there they won't ever get regulated in the tariff notion like
the existing common carrier telcos (and also INMARSAT).
In short, the regulatory lever simply has no purchase on some
of the larger running costs.
What does appear doable within the latitude of the Act
is a transfer payment scheme whereby one component service
(common carrier tariffs) subsidizes other unregulated parts.
Not exactly what Judge Green had in mind when he ordered the
telcos to stop subsidizing local service with long distance
rates.
So this leads me to this question (for which the WWW pages
we've got on this 'seminar' seem to be of no help):
Is our effort
1) an attempt to put an economic foundation under
Internet services to schools (et al) or
2) an attempt to provide some social engineering
regulations as fine print for the Telecom Deregulation Act?
Rex Buddenberg