Tuesday, April 06, 2010

Phone Neutrality

For decades, the AT&T monopoly was regulated with an ideal that could aptly be described as "phone neutrality." In the name of social justice, phone service was ruled with the notion that everyone must have the same service at roughly the same price.

ehe system placed heavy taxes on urban areas to pull wires to rural areas.

The great beneficiary of phone neutrality was the monopoly which used the ideal to cap demands for better services, and provided a mechanism to keep long distance prices high.

In hindsight, we see the era of phone neutrality led to technological stagnation.

Notably, farms and rural communities would have been better served by development of wireless technology. Unlike urban areas, rural areas have ample bandwidth for the community's communication needs.

The cost of phone neutrality wasn't just stagnate service. The ideal led to unnecessary environmental damage. The phone company disrupted ecosystems to string wires. They cut down numerous trees and did damage mining copper for the wires, and released chemicals into the environment to encase the wires in plastic.

For that matter, if we had a free market, we would have seen the emergence of cellular phones and complex networks sooner than we did in a regulatory climate ruled by the dictates of phone neutrality.

Quite frankly, the mass media internet would not have existed if not for the breaking up of AT&T and elimination of the ideal of phone neutrality.

From a historical perspective it is odd that Congress is even considering shoving a new ideal of internet neutrality down our collective gullets. The only need that the power grab seems to be fulfilling is never-ending need of the political elite for more power.

Just as phone neutrality was a bad idea that created artificially high prices and stagnated development, net neutrality is likely to set the internet in a negative direction.


RD said...

"phone neutrality"?

Common carrier is still in place and the law of the land.

Just imagine if AT&T refused to connect calls with each other, you would be unable to call anyone in 35 States of the union.

And this was the case prior to 1930's, Florida was unable to call the rest of the nation ad vise'a'versa because AT&T refused to exchange phone calls with Florida Telephone co.

Internet neutrality is about wether or not we allow Qwest to block/degrade google traffic in order to force people to use Bing or say a Qwest owned search engine. I don't have the choice of another provider as Qwest does not provision FTTN circuits to third party providers like XMISSION. (albiert I might have UtopiaNet sometime in the next 6months or so)

With any luck the FCC will reclassify broadband as a class 1 service and end the neutrality "debate" once and for all.

y-intercept said...

1935 is the year of the first transworld telephone call. The network was still in its infancy.

The problem you cite is solved easily with multiple carriers and a routing table. It is very easy to create a system of multiple routers ... unless you have regulations outlawing "dial-around" services.

The logic of routing is not rocket science. A switch gets a number then connects the call through a switch depending on the number.

The market would have quickly evolved a much more robust system than existed with the monopoly.

(Note, if small companies were competing on the efficiency of routers, we would have seen computer technoloy appear sooner.)

In the FDR era, big companies eagerly sought the regulation of big government (they still do) and big telco was happy to accept monopoly status for regulation, especially since they got to write the regulations.

The result of the regulation is that we essentially froze in the technology of 1935 for fifty years.

You are right about something being strange with this inablity to get greater bandwidth to the end user today. A carry over of regulation past is that it is illegal for you to have any type of communication wire running across property lines. If such were legal, then people would just own their own cable to a switch that would then give highspeed access to the network.

The people at Utopia want to prevent people from owning their own connections as the privately owned utilities.

Wireless technology is quite robust at the moment.

RD said...

lol this has nothing todo with routers, and trust me on this one i have setup a few in my time.

At&t refused to exchange calls with flordia bell of the time, had nothing todo with routing. They refused to exchange calls with anyone.

"A carry over of regulation past is that it is illegal for you to have any type of communication wire running across property lines. If such were legal,"

Not quiet, Its expensive to run fiber, conduit, and all of the inter connecting infrastructure. Telco's have taken advantage of this for years.

After AT&T was broken up it was legal for anyone to run wires anywhere, and in fact their are a few such third party phone providers and network company's floating around.

The problem is that Anti-trust regulations generally in this area go unenforced, If i spend a billion dollars to wire up the wasatch front with fiber to the home, Qwest will start by suing me over everything from pole attachments to right of ways to simply looking at them funny. These suites will of course all be thrown out and Qwest will even have to pay the legal fee's from them, however damage done they delayed you long enough to put in network upgrades of their own in the city's you where going to build in making the right of ways and conduit you installed worthless, Even if you continue to trudge along and start installing out to peoples homes and offering service, Qwest will undercut your price point and offer services at a rate so low you can't match it and make back the investment.

The problems with our telecommunication system is a lack of strong pro consumer, pro competition regulation. Making it harder to sue over pole attachments, making HOA's via funding from the local incumbent unable to sue over right of way, actually enforcing anti trust laws in reguards to price fixing and selling below cost, etc.

Either way Telecommunications is less profitable the more networks that install. each network incurs a fixed rate of maintenance, and the number of customers a network can potentially obtain goes down with the number of networks in the area.

Their is a reason that the Telco's are considered a "Natural Monopoly".

We would all be better off if the line connecting us was simple a city ran utility. Utopia has shown that it increase competition, provides vastly better service then Qwest's/Comcast's decaying copper wires, bring new business's and services that would otherwise never come to our community's. City's are able to install upgrades to a system without having to meet short term profit obligations or any profits at all, They can via bonding spread the cost over a 10-30 year period, where as any company trying todo pretty much has to make their money back in 3years and be making a profit with 6months or be considered a failure.

Jason The said...

RD is right.

Saying that Telco "common carrier" designation led to their stagnation is like saying your local high school football team could've played better without the burden of all those pads, and the boundaries of the field.

Telco's (and now broadband providers) have benefited greatly from the common carrier designation. They have used it again and again to protect themselves from liabilities, and to bypass local regulations to expand networks (where lucrative for them).

Also, implying that a common carrier designation for The Tubes will make the internet stagnant kind of implies you're not that familiar with how development in this medium takes place.

y-intercept said...


Judging from your comments, you have never once read a post I've written.

You spit on me for saying common carrier led to stagnation in one paragraph, then point out how telcos used common carrier to skirt liability claims and local control (which stagnated development) in the next.

Your second paragraph supports my claims that telcos used the ideal of common carrier to create a monopoly.

When one compares telecom before and after the break up of AT&T, one sees that the telco monopoly led to a stagnant network.

The ideal of "network neutrality" is another half baked ideal that will let one group dominate other groups.