Generous by your definition means a quick ride to bankruptcy for
most ISPs. Looking at your
past ridiculous claims and the literature of Free Press, you define “cost”
as marginal costs while ignoring all other costs that are substantially larger.
According to one of Free Press’ papers, Cable broadband should be faster
and slashed to a fraction of the cost while still allowing them plenty of gross
margin profit. But based on the current sub 10% net margins the ISPs live
with, that means they’ll eventually get run out of business.
From: nnsquad-bounces+george_ou=lanarchitect.net@nnsquad.org
[mailto:nnsquad-bounces+george_ou=lanarchitect.net@nnsquad.org] On Behalf Of
Dave Burstein
Sent: Sunday, August 29, 2010 4:00 PM
To: Richard Bennett
Cc: tongia@cmu.edu; nnsquad@nnsquad.org
Subject: [ NNSquad ] Unbundling rates
Richard wrote: "They want
cable and telco to pull fiber and then wholesale it to ISPs at or below
cost." Every unbundling proposal I can think of, specifically including
U.S. UNE's, is defined with a generous return on capital.
I'm not very optimistic about unbundling affecting
most U.S. consumers because I think the scale the carriers now have in
TV,voice, Internet connectivity, and operations make it extremely difficult for
unbundling to work in the U.S.
but the specific question Richard - and Jules Genachowski - have
to answer is, "If we find monopoly like-pricing unacceptable, what
alternative do you offer?"
Currently, Verizon, Comcast and their peers are charging $100 for
high speeds that cost $50 and less in France, England, and Vermont. To
me, that is pretty good evidence competition is weak and prices could be much
lower.
I'm willing to accept that competition might work in low
speeds/wireless, because 300 megahertz is enough for 10 networks like Verizon's
LTE. V & T are pulling away from the others so successfully it will
probably require strong government action to protect competition for that to
work, and at least through 2013-2015 U.S. wireless prices will be somewhat
higher than if we had strong competition. I'm not happy, but waiting that long
is not off-the-wall.
But unless someone sees something that will bring prices for
highspeed/wired connections, I feel something must be done.
Richard, are you really an advocate of strong regulation and
probably price-fixing for high speeds? Or do you have a better way to reduce
monopoly-like prices?
db