Before the
FEDERAL COMMUNICATIONS COMMISSION
Washington, D.C. 20554
In the Matter
of
)
Inquiry Concerning the
Deployment of
)
Advanced
Telecommunications Services
)
CC Docket No. 98-146
Capability to All
Americans in a Reasonable
)
and Timely Fashion,
and Possible Steps
)
to Accelerate Such
Deployment
)
Pursuant to Section
706 of the
)
Telecommunications Act
of 1996
)
REPLY COMMENTS OF THE
COMMERCIAL INTERNET EXCHANGE
ASSOCIATION
The Commercial Internet eXchange Association ("CIX"), by its
attorneys, files these comments on the Second Notice of Inquiry
into the deployment of advanced telecommunications capability (Second NOI) pursuant to
Section 706 of the 1996 Telecommunications Act (1996 Act). CIX is a trade association
that represents over 150 Internet Service Providers (ISPs) who
handle over 75% of the United States' Internet traffic.
Internet service providers, including CIX members, promote
the availability of efficient, innovative and market-based Internet
services to the public.
In its comments filed in this proceeding, CIX urged the
Commission to continue to implement Section 706 in a careful,
thoughtful manner, guided by Congress’s clear support for
competition in the local telecommunications market, and the
Commission’s policy of “unregulation of the Internet.”
In these reply comments, CIX reiterates these points and
specifically focuses upon the incumbent local exchange carriers’
(ILECs’) arguments that amount to no more than a thinly veiled
attempt to avoid the requirements that Congress placed on them in
Sections 251 and 271 of the 1996 Act. By making these arguments,
the ILECs essentially request that the FCC contradict the
Congressional intent embodied by the 1996 Act by permitting the
ILECs to avoid truly opening their markets to competition.
According to the Chevron doctrine, federal regulatory actions must comport with
Congress’s intention for the underlying statute: "the plain
meaning.” The plain
meaning of Section 251 indicates a clear congressional intent to
develop a competitive market for all forms of
telecommunications. In
Section 271, Congress clearly enunciated the only permissible means
of ILEC entry into interLATA services.
ILEC promises of good behavior do not overcome a clear
statement by Congress.
Moreover, the FCC does not have the authority to make
regulatory changes that contradict a clear statement of
Congressional intent.
CIX believes that so long as ISPs, CLECs, and
end-users lack real alternatives to the ILEC’s local network
facility, the Commission must ensure that ILECs do not leverage
their dominance in the voice telecommunications market to capture
the advanced telecommunications market. Specifically, the FCC must
not permit ILECs to steer or force consumers to accept ILEC and
ILEC-affiliates services, including ISP services. Moreover, the FCC must not
be coerced into adopting the policies proposed by the ILECs and
their affiliated associations that will ultimately restrict the
number of competitors in the industry, consequently restricting
consumer choice of internet and advanced telecommunications service
providers. The FCC must
prevent ILECs from discriminating in favor of their affiliated ISPs,
deploying network architecture that will increase the barriers to
CLEC entry, misusing their access to customer propriety network
information (CPNI) to gain competitive advantage, or taking
advantage of their market position to restrict competitive access
and use of the public switch telecommunications network.
CIX attaches, in Appendix I of this reply, the New Networks
Institute’s Summary Report of the ISP Survey (New Networks
Survey).
The data in this report directly contradicts ILEC arguments
that ILEC ownership of local exchange facilities awards “no
competitive advantage” in providing advanced services.
The New Networks
Survey details the problematic and anti-competitive ILEC
behavior that is still occuring. The Survey indicates that these
problems are not isolated and that there is a clear pattern of ILEC
abuse throughout the country.
New Networks’ findings indicate that small ISPs are receiving
substandard customer service from the ILECs. In addition, the New Networks Survey
indicates that the majority of small ISPs in secondary and rural
markets do not have a choice of service providers and are being
squeezed out of the market by the ILECs’ affiliated xDSL and ISP
offerings. The survey
also indicates that state and local public service commissions have
been so far unable to prevent ILEC abuses. Residential and small
business internet users, in particular, are suffering harm as a
result of the ILECs’ intransigence with regard Sections 251, 271,
and the FCC’s Local
Competition regulations.
Thus, in contradiction to the ILECs’ arguments that the
regulatory requirements of Sections 251 and 271 ultimately delay the
widespread deployment of advanced telecommunications capability, the
attached New Networks
Survey indicates it is actually the ILECs’ own behavior that
frustrates the deployment of advanced telecommunications services to
all Americans.
I.
The Meaning Of
"Advanced Telecommunications Capability."
CIX agrees with the majority of commentors that
the definition of advanced telecommunications capability should
embrace services such as asymmetric digital subscriber line (ADSL)
transmission service, as well as those provided through cable and
satellite transmission systems.
CIX strongly disagrees
with ILEC and ILEC-oriented association arguments that there is an
imminent backbone shortage.
As the balance of the comments convincingly argue, not only
is there no shortage of fiber backbone throughout the country, but
within the next few years, that backbone will be augmented by
coast-to-coast satellite transmission systems. ILEC arguments to the
contrary are merely self-serving attempts to avoid the requirements
imposed upon them by Sections 251 and 271 and have no factual
justification.
The reports and arguments contained in
iAdvance’s comments are particularly misleading. Specifically, iAdvance
purports that allowing ILECs to invest and compete in the interLATA
data market, without requiring their compliance with Section 271,
will somehow “help close the rural-urban broadband digital
divide. iAdvance’s
comments also imply that there is a looming “bandwidth
crises” that can only be forestalled by excepting the
ILEC provision of advanced telecommunications capability from the
pro-competitive requirements of the 1996 Act. The concept of an impending
“bandwidth crisis” is no more than a Trojan Horse. As the balance of the
comments clearly indicate, the backbone market is already fully
competitive. Moreover,
ISPs themselves are increasing their backbone capacity in
anticipation of growing demand.
Thus, there is little likelihood that ILEC entry into the
backbone facilities market will have a positive effect.
Attached to its comments, iAdvance submitted a
report entitled Breaking the
Backbone: The Impact of
Regulation on Internet Infrastructure Deployment, containing a
lengthy statistical analysis in support of the argument that, but
for pro-competitive regulation, advanced telecommunications
capability would already be widely available. This report is based on
flawed assumptions and generally outdated data.
Specifically, iAdvance’s Breaking the Backbone report
argues that geographical proximity to a backbone hub, or the lack
thereof, is a gating factor currently affecting accessibility to
advanced telecommunications capability. This is flatly untrue. End users generally access
ISPs through local connections to the ISPs’ points-of-presence, and
do not connect directly to hubs. Thus, Breaking the Backbone’s
central premise, that permitting ILECs to engage in interLATA
service will promote end-user access to advanced telecommunications
capability, is faulty and misleading. Moreover, the New Networks Survey does not
even indicate that ISPs perceive a problem accessing hubs or
backbone infrastructure.
If the ILECs want to promote end-user access to the Internet
and other advanced telecommunications capabilities, they need only
cooperate in the provision of the unbundled network elements
necessary for the competitive deployment of xDSL and other new
services.
In addition Breaking the Backbone
utilizes out of date, consequently inaccurate, data. Specifically, the data
regarding personal income per capita and cities with 100,000 or more
inhabitants dates to 1996.
More importantly, iAdvance founds its analysis on the
available quality of independent LEC access lines, but relies on
data dating to December 31, 1996 - merely months after Congress
enacted the Telecom Act of 1996. Thus, the study ignores the
effects of four years regulatory development and burgeoning
competition.
Upon this faulty statistical foundation,
iAdvance basis its argument that federal restrictions on ILEC
interLATA transmissions have a chilling effect on local broadband
deployment and investment.
Essentially, iAdvance argues that ILECs would be more likely
to invest in advanced telecommunications capability if they did not
have to comply with Congress’ intention to develop a competitive
telecommunications market.
CIX agrees with the majority of commentors that support the
opposite proposition: that it is only in response to competition,
whether by congressional initiative or the deployment of alternative
technologies such as cable and satellite, that the ILECs have
finally relented and have begun to deploy networks that can support
advanced telecommunication capability. The FCC should not accede to
ILEC and ILEC-oriented association arguments that the absence of
competition and government support for competitive entry into the
telecommunications market will increase the quality and quantity of
deployed advanced telecommunications capability.
In the second report submitted by iAdvance,
entitled A 21st
Century Internet for all Americans. iAdvance actually makes
arguments that undermine its theory that federal regulations,
specifically Section 251 and 271 of the 1996 Act, impede the
deployment of advanced telecommunications capability. iAdvance notes that “it
costs significantly less for [ILECs] to make the incremental
investment to extend the backbone network to rural
communities.”
Undoubtedly, the economies of scale available to ILECs
providing service to vast regions of the country dictate that they
can procure equipment on terms that are more favorable than those
available to smaller CLECs.
iAdvance does not, however indicate why the ILECs will have
an incentive in the absence of competition to pass their equipment
savings on to consumers in the form of lower prices, greater
functionality, or more widespread deployment, rather than to extract
monopoly rents without concern for competition.
Secondly, iAdvance notes that ILECs have a
“unique strategic imperative for building these networks in rural
communities.”
Undoubtedly, ILECs do have a unique and strategic imperative,
at the present time.
Their desire to protect their market share compels them to
deploy advanced telecommunications capability ahead of their
potential competitors.
One must wonder, however, what happens to this argument if
the FCC or Congress no longer supported competitive entry. Specifically, without the
possibility of competitive entry enabled by Sections 251 and 271,
there would be nothing left to compel ILECs to deploy advanced
services or minimize the consumer prices for advanced
telecommunications capability in rural and less profitable
markets.
Finally, we emphasize that ILECS can free
themselves from the requirements of Section 271 by complying with
the requirements of Section 251, in accordance with the regulations
enacted by the FCC in the Local Competition
proceedings. Thus,
ILECs “hold the key to their jail cell in their pocket” and need
only agree to compete on an equal footing with their fellow
competitors in order to attain comparable regulatory treatment.
CIX believes that, despite the ILECs and their
affiliated associations’ protests to the contrary, advanced
telecommunications capability is being deployed to all Americans,
and there is no impending backbone shortage. So long as Congress and the
FCC continue to support the establishment of competitive markets by
enforcing the regulations currently in effect, further regulatory
changes will not be necessary to support the deployment of advanced
telecommunications capability to all Americans.
CIX agrees with the
majority of commentors that advanced telecommunications capability
is being deployed in a reasonable and timely manner. CIX emphasizes that the only
factor apparently inhibiting the deployment advanced
telecommunications deployment is the ILECs’ stubborn refusal to
fully comply with the requirements of Section 251 and to remove the
barriers to competition.
Moreover, the ILECs purporting to deploy network capability
in support in the deployment of advanced telecommunications
capability may actually be attempting to leverage their current
control over network architecture to foreclose the opportunity for
competitive carriers to enter the market. Specifically, SBC with its
Project Pronto is attempting to deploy proprietary architecture for
their digital loop carrier (DLC) deployment that could foreclose the
opportunity for competitors to utilize transmission technology
alternatives that are not compatible with the specific type of
equipment that SBC has chosen to deploy. We recognize that the FCC
has undertaken this issue in a separate proceeding. We recommend that the FCC
utilize this proceeding to demonstrate that it will not support the
ILECs’ efforts to utilize their current control over network
technology to create a new barriers to competition.
Finally, CIX reiterates
its recommendation that the FCC not submit to the ILEC’s arguments
that they should be permitted to bundle advanced telecommunications
capability with other products and services. Doing so will create new
opportunities for anti-competitive behavior that will undermine the
FCC’s and Congress’ support for CLEC and ISP market entry.
As discussed above, CIX opposes any ILEC effort
to subvert Section 706 into a means of avoiding their unbundling and
pro-competitive obligations pursuant to Sections 241 and 271. The
FCC need not support the weakening of those requirements in order to
induce the ILECs to do what they are already free to do. Moreover, we note that ILECs
can retain their ability to act in an anti-competitive manner, even
after they receive Section 271 approval. The FCC’s willingness to act
swiftly and firmly in response to anti-competitive behavior on
behalf of the ILECs, regardless of Section 271 approval, is the best
defense against a resurgence of market domination by monopolistic
telecommunications carriers.
We recommend that the FCC continue to develop its enforcement
mechanisms, and diligently monitor the development of a competitive
market for advanced telecommunications capabilities.
CIX urges the Commission to continue to support
the deployment of advanced telecommunications capability ensuring
freedom of ISP and carrier choice for consumers, by insuring that
ILEC local facilities are fully opened for competition, and remain
so.
Respectfully submitted,
COMMERCIAL INTERNET EXCHANGE ASSOCIATION
Barbara A. Dooley
President
Commercial
Internet eXchange
Association
April 4, 2000
APPENDIX I
New Networks Institute
Summary Report of the ISP
Survey
SUMMARY REPORT
OF THE ISP SURVEY
Presented by
New Networks
Institute
4/4/00
Executive Summary
Internet Service Providers (ISPs) are mostly
comprised of a rare breed of entrepreneurs who, at their own
expense, clearly saw the need to supply customers with the
foundations of the Digital Age -- Internet and web service provision
and everything from e-mail to the creation of web sites.
With more than 7,000 providers throughout the US,
small and mid-sized ISPs represent almost half (46%) of all online
customers (source: Washington Post), and it has been this group that
has been the real innovators of our Digital Future, not the
monopolies who supply local phone service, such as the Bell
companies or GTE.
However, based on the findings of this survey,
the local Bell Companies and GTE are causing serious harm to the
Internet Providers and their customers. This is causing not only a
loss of revenues to competitors, but is also stifling competition
and the growth of America's Digital Future.
Primary
Findings:
·
SMALL ISPs Are
Receiving Substandard Customer Services From The Local Phone
Company. Across the board, the ISPs rated their services as
“sub-standard” in virtually all categories, and there was only 8% of
ISPs who gave the Bell an overall passing grade (above 6.5 out of a
possible 10). And though the highest scores were for the
“friendliness of telephone representatives”, on a scale of one to
ten, the survey respondents gave the Bells an overall average of
just 3.7, a seriously failing grade.
·
There is a Litany of Problems Being Created by Bells According to the respondents,
62% of ISPs claim that phoneline problems happen frequently or
continually, 57% state that trying to have orders fulfilled takes
months, and this includes even get a straight answer about the
installation or the price of service, while 46% believe that even
when something is advertised, there is no guarantee that the ISP can
order it. And of the phonelines that are already installed, 46%
state it can take days for repairs.
·
These Problems
Are Not Isolated. There is a Clear Pattern of Abuse Throughout The
Entire Bell System And GTE. From Texas to California, New York
to Florida, of the 50 states represented, the problems encountered
are happening throughout the Bell System and GTE
·
ISPs That Are
Using CLECs (Competitive Local Exchange Companies) Feel That The
Competitors Deliver Better Services, But That They Are Also Hampered
By The Bell Companies Who Supply The CLEC Access As Well.
Throughout the responses, those who use a CLEC gave the companies
almost double the rating of their LEC counterparts. However, as most
of the ISPs point out, the CLEC still has to interface with the Bell
company and this still causes many problems.
·
The Majority
Of Small ISPs In Secondary Markets Across America Do Not Have A
Choice Of Providers, And Are Being Priced Out Of The Bell’s DSL.
In many states, non-urban ISPs are still totally dependent on the
local Bell to provide services and the majority point out that the
Bells has either freezed them out of the market by offering services
below cost, or they are not giving the ISP adequate services. (NNI
has filed a separate complaint with the New York Attorney Generals
office demonstrating that Bell Atlantic (like the other Bells) are
subsidizing their DSL services and offering the service below the
costs to competitors.
·
The Majority
Of ISPs Are NOT Receiving Adequate Help From Their Local Public
Service Commissions To Stop Bell’s Abuses, Even Though The Bells are
Violating The Telecom Act of 96 And State Laws. Almost 75% of ISPs have
attempted to get help from their state Commissions regarding their
problems with the local Bell. However, the majority, 63% of those
who approached the Public Service Commission to get help got no
results. However, it should
be noted that these violations cost the Internet providers both a
loss of revenues, including the loss of customers, as well as the
damaging of the company’s reputation.
·
Customers of
the Internet Providers are Being Harmed by the Bells Actions.
When phonelines aren’t working or the phone company doesn’t show
up for an installation, this has a direct impact on the customers
who are using the ISPs’ services. (NNI has filed a separate
complaint with the New York Attorney Generals office about the Bells
impacts on DSL customers who use an independent ISP.
Conclusion: With 89% of
ISPs believing (and documenting) that they are being harmed, NNI believes that the FCC
and the states should immediately create a “code of standards and
conduct” that protects Internet Providers and their customers from
harm. This includes the enforcement of laws currently in place, as
well as the payment of penalties and fines that compensates the ISP
and their customers for the harm the Bells are creating with their
sub-standard customer services and phone provisioning.
The
History And Reason For This Survey
In 1998, New Networks Institute launched a pilot
survey to determine the relationship between Internet Service
Providers and their local phone provider-- the Bell companies and
GTE. Based on the disturbing findings from this pilot, the
Commercial Internet eXchange (CIX) on behalf of the United States
Internet Service Providers Alliance (USISPA) sponsored a survey with
additional questions at the end of 4th quarter 1999.
Survey
Methodology
The survey was based on a random mailing from the
USISPA to Internet providers, November 1999,
requesting them to fill out an online survey. Also, to increase
response rates, the USISPA posted an invitation to online lists as
well as state Internet Provider Associations.
This method helped to make the response process
random, therefore representing an accurate sample of the entire
industry. However, there are always caveats to any survey, including
those that are “self-selecting”, meaning that decision to take the
time to fill out a survey is left up to respondents themselves.
Based on other interviews with other ISPs who did
not complete the survey, as well some industry findings about the
Bell’s treatment of competitors, we believe that the survey mimics
the overall Internet Service Provider industry’s relationship with
the Bell companies.
Survey
Details
Appendix 1 highlights the survey details,
including number of respondents, size of the companies, states
covered and representation of the Bell companies (and GTE).
1.0
Overall Ratings of the Bell Phone Companies and Service
Quality Issues
1.1
The Bells are Delivering Sub-Standard Customer Services
Across the board, the ISPs rated their services
as “sub-standard” in virtually all categories, and only 8% of ISPs
gave the Bell an overall passing grade (above 6.5) on a scale of one
to ten. And though the highest scores rated the telephone
representatives as “friendly”, the survey respondents gave the Bells
an overall average of just 3.7, a seriously failing grade.
Summary of Ratings By ISPs for
their Local Bell Company
(1 is
lowest, 10 is highest)
|
Overall
Rating |
3.7
|
|
Cost Is Fair
|
3.0
|
|
Bills are easy to
Understandable |
3.2
|
|
Bills are
Accurate |
3.5
|
|
Easy to reach
when problems occur
|
4.2
|
|
They do a good
Job fixing problems
|
3.4
|
|
Friendly Customer
Service and Sales reps.
|
5.7
|
|
Services Lived Up
to Promises |
3.6
|
|
|
|
|
|
|
|
|
|
|
Based on the survey, the primary findings of
general customer services are clear. Across the board, ISPs responded that:
·
Phonebills are unreadable
·
Bills are rarely accurate
·
The company rarely fixes problems in a “timely and
reasonable” fashion and they are hard to reach.
·
The Bells do not keep promises, especially on
installation appointments and deadlines.
A NY state ISP who uses Bell Atlantic
stated:
“Customer service and callbacks are
non-existent and frequently the contact on the phone cannot provide
the name of a rep who handles problems, orders or billing and then
we never receive a callback. We still have not had a customer
service rep assigned after nearly a year without one. . . Constantly
shuffled to various different people when trying to get information
or order status. Bell Atlantic just sucks.”
A Washington state ISP who uses US West
stated:
“Lack of
interest in resolving billing disputes; overall communication;
cancellation of line(s) order with no apparent reason or
communication; etc.”
Meanwhile, another ISP from Washington state
added.
“…it is
an endless cycle. NOT ONE installation in the past two plus years
has been done correctly or on time. Not one. Out of at least 20
orders of various types"
1.2
Service Quality Issues
This next set of questions asked about the
specifics of service quality. Do lines go in and out of service?
Does the local company fix the problems immediately or take months,
and does the ISP experience line problems of various sorts? The
exhibit below highlights the various problems encountered, and the
ISP was asked to assign one of four choices:
·
Never happened
·
Happened a few times
·
Happens frequently
·
Continuous problems
Using this scorecard for the questions,
we present the data as two sets of information. Column A gives the
number of ISPs who found the problems as “never happened” or
“happened a few times”, while Column B combines “happens frequently”
or “continuous problems.” We’ve also ordered the material showing
the most problematic areas at the top of the exhibit.
According to the respondents, 62% of ISPs claim
that phoneline problems happen frequently or continually, 57% state
that trying to have orders fulfilled takes months, and this includes
even getting a straight answer about the installation or the price
of service, Meanwhile 46% believe that even when something is
advertised, there is no guarantee that the ISP can order it. And of
the lines that are already installed, 46% state it can take days for
repairs.
A Litany of Problems from the
Bells
|
|
Column A
|
Column B
|
|
|
Never/Few Times |
Frequent/Continuous
|
|
Line problems of
numerous sorts |
38%
|
62%
|
|
Trying to order
services takes months |
43%
|
57%
|
|
Can't get a
straight answer about price or installation
|
44%
|
56%
|
|
Services are
advertised but can't be ordered
|
54%
|
46%
|
|
It takes days
for repairs.
|
54%
|
46%
|
|
They rarely
return our calls.
|
63%
|
37%
|
|
Rates charged to
you are higher than the tariffs |
73%
|
27%
|
|
Phonelines go in
and our of service for no apparent reason
|
74%
|
26%
|
|
Phonelines won't
hunt
|
84%
|
16%
|
A Washington ISP states that they have missed
installation and billing problems:
“Serious
missed due dates, service billings a nightmare. Billed for
discontinued services, adjustments made then unmade without
notice."
In Minnesota, an ISP finds that US West’s bills
are ‘always wrong”.
“Frame
relay billing always wrong, Disconnects rarely processed completely.
Disconnects not always removed from bill, Bill for new service
starts months before circuit is up."
A Texas ISP using SBC communication has similar
problems with our other ISPs
“Billing irregularities, Unknown charges,
Unknown/unexplained outages frequent”
Meanwhile, a Colorado ISP states that US West
can’t supply adequate line quality for 56K modems, and calls just
hang up for no reason.
·
“Bad trunk quality, unable to connect with modems
·
56K modems connect as low as 16.8K
·
Fast busy when customers call between Cos (Central
Offices, which are part of the phone and data networks)
·
Data calls dropped for ' No' apparent reason”
As one Texas ISP using GTE put it, it can take
months just to get basic services that should take a week:
“Over 2
months for a new Channelized T1, finally installed 1 month after due
date. Still waiting on 'EXPIDITED' install of fractional T1 to
replace lines which go out of service because the GTE switch has a
problem that they can not seem to correct. (ISDN LINES)” (EDITORS
NOTE: Channelized T1 and Fractional T1 are basic network business
services.)
Though the other problems mentioned, including
“rates charges are higher than the tariffs”, or “phonelines go in an
out of service for no reason”, are not “continuous problems”,
virtually ALL ISPs experience these problems, though less frequently
than the other problems mentioned.
2.0
Using a Competitive Local Exchange Company (CLEC)
One of the primary changes brought on by the
Telecom Act of 1996 has been the creation of the competitive local
phone companies, known as CLECs. These companies offer a variety of
services, but for the most part have focused on delivering data
services that are sold to Internet Service Providers.
The Survey found that:
1/3 of
ISPs are Using CLECs -- Approximately 1/3 of the respondents are
using a CLEC for their services, mostly focused on data and DSL
services. However, over ½ of the ISPs do not have a CLEC available
or view them as a worse solution, mainly because the CLEC still has
to purchase service from the local Bell.
2.1
CLECs Are Rated As A Better Choice Over The Bells.
The ratings for CLECs, based
on ISPs that use CLECs, are almost double compared to the
Bells.
CLEC Ratings
(On a
scale of 1 to 10)
|
CLEC Overall
Rating |
5.7
|
|
CLEC Cost Is
Fair |
6.9
|
|
CLEC Bills
Understandable |
6.0
|
|
CLEC Bills
Accurate |
4.8
|
|
CLEC Easy
Access |
5.4
|
|
CLEC Fixing
Problems |
4.8
|
|
CLEC
Friendly |
6.6
|
|
|
CLEC Kept
Promises |
5.5
|
|
However, there is a dark side to this story. As
pointed out by numerous ISPs, the CLEC is beholden to the Bell to
deliver services in most territories and so, in many cases, the
CLEC’s rating also reflects the complications created by the
Bells.
A Kentucky ISP states that the problems they
encounter with their CLEC could be BellSouth’s fault.
"Our
CLEC pricing is great but the service is horrible. We're not sure,
however, if the CLEC is truly to blame or if the problems occurring
are caused by the Incumbent (BellSouth)."
An
ISP in Texas mentions that the CLEC is dependent on Southwestern
Bell (SBC) and coordination between the two is “impossible."
"Better
prices, harder working people, however, a CLEC must work with SBC to
gain access to the network, and when SBC screws them, they become
another layer of confusion. To coordinate both large companies into
a cohesive troubleshooting team, in a crises, is impossible."
Two
other ISPs stated that this dependence of the CLEC to the Bell holds
the CLEC and the ISP "hostage."
An
ISP in Kentucky using BellSouth states:
"Most
(95%) of CLEC work is resale from ILEC (Incumbent Local phone
company), they (CLEC) are held hostage"
While
in New Mexico, an ISP wrote:
"Since
the CLEC depends on US West for many services, and since US West
would like the CLEC's to go away, the CLEC in turn faces many US
West problems."
And the
majority of ISPs state that they have no alternative but to use
their local monopoly phone company for all services.
A Washington
state ISP states:
“There are no other choices at all!
”
Another
Washington state ISP:
“US West is the ONLY LEC here.”
Or another
ISP from Maine, using Bell Atlantic:
" There are no other choices,
period."
Or yet
another from Texas using GTE:
“There are NO CLEC CHOICES!”
In some cases, the ISP has found that the CLEC
will have the same or worse problems in dealing with the Bell and so
a CLEC just “adds a
layer of abstraction and confusion.”
As one ISP from California put it about Pac
Bell:
"There are
other choices but because the CLECs don't necessarily get any better
service out of the ILEC than we do directly, going to a CLEC just
adds a layer of abstraction and confusion. This is largely due to
the ILECs inability to do things efficiently in the first place but
it also functions nicely as monopoly reinforcing behavior so the
ILEC is seen as having little incentive to provide quality service
to the CLEC."
"Failed to
offer DSL in our primary market area despite early promises to do
so. We had a DSL connection and essentially NO customers for more
than a year. I would not in good conscience advertise DSL when it
was not available. More than a year later, after canceling our
service and getting a full refund, US West is beginning to offer DSL
in a limited area in our primary service area. Our experience with
US West and DSL has been uniformly AWFUL. I currently do not offer
DSL because the phone company (in my view) has made it deliberately
uneconomical to compete in this arena. We have reports from a former
US West employee that US West, by policy, is not making their
internet arm pay their bills to US West, although they are being
billed. She was told ‘don't worry about it’ and to ‘ignore it’ when
she brought this to the attention of her supervisor. Part of her
job, by the way (if I recall correctly), was collecting delinquent
accounts.”
But this is only one of the majority of ISPs who
can’t get DSL from the Bell.
An ISP using GTE states:
“Currently
GTE has suspended all new ATM connection for DSL.” (EDITOR NOTE:
“ATM” is a network component vital to DSL services)
A
Tennessee ISP using Sprint found that Sprint is only using their own
product and won’t sell it to the ISPs.
“Sprint
says it will be a year before DSL is available in our area. That is
a lie because they already have it!”
An ISP in Utah states:
“USWest
promised Local DSL service by August 1998 and it's still not here
and is no longer even forecasted in our area.”
An ISP in rural Texas using Southwestern Bell
states:
“DSL not available.”
And an ISP in New Mexico states:
“US West
lacks facilities throughout the 25% of the state that it services.
We can rarely place an order that is not put on hold because the US
West network is at capacity.”
3.2 Predatory
Pricing By The Bell Company Is Another Inhibitor To ISPs Offering
DSL
In
December, 1999, New Networks Institute filed a Complaint with the
Attorney General’s office pertaining to the Bells predatory pricing
of DSL. Based on data from two New York ISPs, Bwaynet and Panix, as
well as using industry standards, we found that the Bell Atlantic’s
wholesale pricing for competitive ISPs is below cost, and there is
virtually no way an ISP can sell the product and be profitable. The
Complaint can be read at: http://newnetworks.com/baadslscrewisp.htm
Another New York ISP
talking about Bell Atlantic DSL pricing found that it was not
competitively offered to ISPs for resale:
"We have
not even tried to do anything with DSL because not only can Bell
Atlantic not provide DSL to 80+% of the area, but their pricing
keeps us from being able to be competitive. So we can't say anything
else about DSL.”
This exact same theme was echoed by a Washington
ISP who uses US West.
Another ISP using a competitive CLEC, Covad, had
the same problem.
“The Bell
installer will talk up the Bell DSL service over the Covad service
and gives unnecessary and confusing information to the
end-user.”
“US
West uses monopoly to compete for Internet customers. The repair
department tries to sell US West services to our customers. The New
Mexico network lacks facilities for virtually every expansion that
we attempt to initiate. Meanwhile, US West does everything in its
power to woo the Legislature to support whatever it proposes.”
One ISP from Utah stated:
“When complaints are filed,
USWest uses their power to get the complaints ignored or totally
thrown out.”
“We can't
file a complaint against them since the service in question is
delivered by the CLEC. So we filed against them, so they would get
on BellSouth's case . . . but instead we got a hysterical fit from
the local CLEC manager who said, I quote ‘you don't understand who
and what you're dealing with. . .you should just leave it all
alone!’.”
In New Mexico, the same exact problem
exists.
“US West recently chose to
ignore a request for service and then when I filed a complaint with
the NM Public Regulatory Commission they said that I was not their
customer MCI was and they could not talk to me. They refused to
install the lines for me and without the copper they provide I could
not provide a service.”
“The: PUC ["UTC"
Utilities and Transportation Commission] told me, "take a number; we
have more complaints in here than we have room for.”
Or as one ISP from New Mexico put it:
5.5
In Most Cases It Simply Isn’t A Fair Fight. The Bell
companies have vast resources compared to the small ISP or the
customer. One ISP from
New York stated:
And one ISP fears retribution.
“When Complaints are
made to state PUC, you end up in big trouble.”
“We can't afford to. We are
not a big company. We believe they have intentionally caused us to
have substandard service in the past, we are terrified of
retribution.”
Appendix 1:
Definitions and Abbreviations
Bell Company
In 1984, AT&T was broken up and seven large holding
companies were created to control the original Bell phone companies. They
were:
·
Ameritech
·
Bell Atlantic
·
BellSouth
·
NYNEX
·
Pacific Telesis
·
SBC Communications (originally Southwestern Bell)
·
US West
Bandwidth
Bandwidth is a term that is used to describe how much or how
fast content can be received or sent. Think of it as a pipe
carrying water. The larger the pipe, the more water it can
deliver.
CLEC
“Competitive Local Exchange Company” is a local phone company that
offers a competitive local phone service. This includes data and or
voice services.
CO
“Central Office” is an aggregator of local phone lines in a
neighborhood.
DSL
“Digital Subscriber Line” is a generic term for many types of
services. For example, ADSL is the most common. Asymmetric DSL is a
service that is most one-directional, i.e., from the outside world
to the user is much faster than a customer sending information.
ILEC or LEC
An “Incumbent Local Exchange Company” is a term to describe any
monopoly local phone company, including the Bells. However, there are over 1300+ non
Bell local phone companies in America, accounting for approximately
20% of local phone services. GTE and Sprint are two of the largest
LECs.
ISP
“Internet Service Provider” is a company that offers
Internet service or web provisioning to ‘end-users’ (i.e.,
customers) and who maintains phone/data lines.
Local Reseller
A company that purchases local phone service at a discount
and resells it to customers.
Long Distance
A Long Distance company sells long distance services, which
is a phone service that crosses state lines. A call from New York to
New Jersey is Long Distance.
Network Switch
When calls are transferred between Central Offices or
connected to long distance or data services, they go through some
sort of network switch, a device that routes calls.
T1
Pronounced “Tee One”, this is a standard business service
that gives 24 lines of service in a bundle. However, this service
can also be used as having the capacity of these 24 lines
simultaneously. It can be sold as “fractional”, meaning that
the customer buys a smaller percentage of the packaged lines.
Toll Call
A Toll Call is a phone call that stays within a geographic
boundary, known as a “LATA”, which is similar to an ‘area code’, or
In-state, which is a
call that doesn’t cross state lines.
Appendix 2 THE SURVEY DETAILS
1)
Total Respondents: The survey garnered 84 useful and completed
respondents.
2) The
Respondents were ALL SMALL INDEPENDENT ISPs. The breakout: 67%
of the respondents worked for small ISPs who have under ten
staffers, 27% were under 50 staffers, (The remainder didn’t answer
the question.)
3) States
Covered: Two ISPs use national networks that give them access to
48 states, continental US and approx. 25% offer service in multiple
states. However, the most accurate assessment would be that the
survey covered 34 states and most companies are only doing business
in a specific state.
States Covered
|
Tennessee |
North Dakota |
New Mexico |
|
Oregon |
New York |
|
|
Washington |
California |
Montana |
|
Nebraska |
Kentucky |
Minnesota |
|
Wyoming |
Colorado |
Indiana |
|
Maine |
Oklahoma |
Kentucky |
|
Louisiana |
Minnesota |
Florida |
|
Arizona |
Massachusetts |
Virginia |
|
South Dakota |
Georgia |
Illinois |
|
Nebraska |
Massachusetts. |
South Dakota |
|
Michigan |
Connecticut |
New Jersey |
|
Nevada |
|
|
Some ISPs have multiple states listed: One claims
“California, Oregon, Washington, Nevada, Indiana, Illinois,
Florida.”
4) RBOC
and GTE Representation: All Regional Bells are represented.
However, the survey drew the most response from US West and SBC.
RBOC REPRESENTATION, adding
Multiple listings
US
West |
50 |
|
SBC |
27 |
|
GTE |
17 |
|
BellSouth |
7 |
Bell Atlantic |
7 |
|
Ameritech |
5 |
Pac
Bell |
3 |
NOTE: 17
companies use GTE, but only 5 have them as the exclusive local phone
company.
5)
Largest State Accounting:
US West has the most states represented
especially counting multiples. Texas had the largest response.
Largest State Accounting
|
23 |
Texas |
|
12 |
New Mexico |
|
11 |
Washington |
|
7 |
Utah |
|
4 |
Wyoming |
