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October 15, 2004

Monopoly DLS Broadband Expands- Good

People who have read this blog over a long time know that I think that the Baby Bells should be able to build broadband infrastructure and not allow competitors access to those lines-- a position in opposition to many liberal consumer and technology groups.

So I was happy to see this headline- Federal regulators act to speed broadband access:

Federal regulators approved new rules Thursday aimed at making high-speed Internet available to more Americans. Critics contended the action will hinder competition in broadband services and keep prices high.

The proposal lets the major regional phone companies build fiber-optic networks to within 500 feet of a customer's home without requiring the companies to share their networks with competitors.

Currently, the former Baby Bell companies do not have to lease their networks for fiber that is installed directly to the home. The new rule extends that regulation to within 500 feet of a residence.

Why is this a good thing? Because if the phone companies have to share those lines, the competitors will cherry pick rich customers and leave the Baby Bells with the expensive, low-profit poor customers. Which meant that a lot of broadband infrastructure wasn't being built at all.

Now with the new rules, that may change:

SBC Communications Inc. said it will accelerate its plan to build neighborhood fiber-optics networks. As a result, planned deployment for broadband could take two years or three years instead of five years.
Frankly, promoting "competition" by companies that don't build new infrastructure is not real competition that benefits consumers. In practice, it just parasitic companies selling Baby Bell services-- adding nothing real of value. So little is gained other than discouraging the Baby Bells from building the infrastructure faster and more broadly.

So these changes are a good thing.

Posted by Nathan at October 15, 2004 07:56 AM