[1st-mile-nm] Fwd: 10.31.07

[Steve Ross]

It is unclear exactly what the FCC will do on exclusive 
contracts. The line among FCC staff members is that the 
agency considers telcos good, MSOs (franchise cable 
operators) bad, and PCOs (private cable operators) innocent 
children.

The column is an exceptionally idiotic one, gratuitously 
noting that PCOs have no incentive to clean up their acts, 
and that they cost more. There's NO FCC data to support the 
idea PCO fee schedules are high -- the FCC did study MSOs 
that had no competition versus those that did -- including 
competition from DBS and PCOs -- and of course found that 
competition lowers prices. PCOs also tend to offer better, 
localized and ethnically tuned channel lineups.

PCOs also have plenty of incentive. PCOs can, of course, be 
kicked off the property for not maintaining proper service 
-- SLAs are normally included in PCO contracts -- and the 
contracts themselves are usually for 8 or 10 years. 
Landlords hate to lose a tenant because of poor cable service.

what's more, property owners cannot ban individual satellite 
dishes unless they are unsafe -- that's federal law. So they 
have incentive to provide good alternatives.

I live in Massachusetts, which has long banned exclusive 
contracts. As a member of my condo board, I'd love to get a 
PCO into the building -- Comcast, the MSO, provides rotten 
service. With no chance for at least short-term exclusivity, 
there's no way a PCO would come in. Verizon gets here in 
about 18 months, so we'll have to wait. Our building is not 
safe for DBS dishes, thank goodness.

In greenfields, much of the fiber is being laid in by 
"amenity providers" (sorta CLECs rather than the PCO 
corporate form, but not always) who need guarantees in the 
form of an agreement with the HOA or MDU building owner to 
attract capital. FCC does not want to cut that off. "Amenity 
providers" may not be subject to FCC overview (no case law yet).

One thing is clear (and the column got it right): THE FCC 
has murky authority in this area, guaranteeing a long court 
process and a long delay -- but not long enough to keep 
investment flowing to overbuilding CLECs and PCOs. Hence, 
the ruling will probably weaken competition.

Steven S. Ross
Editor-in-Chief
Broadband Properties
steve at broadbandproperties.com
www.bbpmag.com, www.killerapp.com
SKYPE: editorsteve
+1 781-284-8810
+1 646-216-8030 fax
+1 201-456-5933 mobile

Marianne Granoff wrote:
> Edited for interest.  FYI.
> 
> 
>> FCC To Ban Exclusive Broadband Deals - New rules to be
>> handed down on Wednesday…, DSLreports, 10/31/2007
>> For months, AT&T and Verizon have been asking the FCC
>> to ban cable operators from maintaining exclusive
>> service contracts with the owners of apartment
>> buildings, developments and MDUs (multiple dwelling
>> units). When the phone company asks for something, the
>> FCC delivers:
>>
>> http://www.dslreports.com/shownews/FCC-To-Ban-Exclusive-Broadband-Deals-88914
>>
>> Commerce Committee Approves Bill to Make Broadband
>> Access More Affordable, Senate, 10/31/2007
>> No description
>>
>> http://commerce.senate.gov/public/index.cfm?FuseAction=PressReleases.Detail&PressRelease_id=248976
>>
>>
>> Billions of Reasons Not to Grant Forbearance, PK,
>> 10/31/2007
>> How many reasons are there for the Federal
>> Communications Commission (FCC) to reject the
>> deregulation petitions Verizon filed for six cities in
>> the Northeast? How about 2.4 billion? That’s not a
>> number pulled from the air. A new study, sponsored by
>> XO, Covad and other of the hardy band of surviving
>> competitive local exchange carriers (CLECs), found
>> that if the petitions are granted, consumers and
>> businesses will pay $2.4 billion more for local phone
>> service, high-speed Internet service and business
>> connections.
>>  http://feeds.publicknowledge.org/~r/publicknowledge-main/~3/176867550/1250
>>
>>
>> Net Neutrality’s Second Coming, Save the Internet,
>> 10/31/2007
>> Don’t always believe the purveyors of conventional
>> wisdom in Washington. Some of these DC pundits are so
>> steeped in their own “knowledge” that they get stuck
>> spinning their wheels when faced with evidence to the
>> contrary.
>>
>> http://www.savetheinternet.com/blog/2007/10/29/net-neutralitys-second-coming/
>>
>>
>>
>> Ban on Net access taxes extended until 2014, CNET,
>> 10/31/2007
>> House of Representatives approval means most American
>> consumers will continue seeing tax-free Internet
>> connection bills. President Bush is expected to sign
>> off before current law expires this week.
>>
>> http://www.news.com/8301-10784_3-9807418-7.html?part=rss&subj=news&tag=2547-1_3-0-20
>>
>> Covad Bought By Platinum Equity - $304 million deal,
>> or $1.02 per share…, DSLreports, 10/31/2007
>> Earlier this month, a Covad insider tipped us off to
>> the fact that the CLEC was shopping itself around to
>> potential sugar daddies, with names like AT&T, Sprint
>> and even Best Buy being tossed around as acquisition
>> partners. In the end, however, it appears that Covad
>> got the best deal from Platinum Equity, who will pay
>> $304 million (or $1.02 per share) for the CLEC. Covad
>> CEO Charles Hoffman waxes optimistic in the company
>> press release:
>>  http://www.dslreports.com/shownews/Covad-Bought-By-Platinum-Equity-88909
>>
>> Verizon profit drops one-third, Globe and Mail,
>> 10/31/2007
>> Taxes take a bite, while revenue rises
>>  http://feeds.feedburner.com/~r/TheGlobeAndMail-Technology/~3/176653624/
> 
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