[Nolug] Cable companies

Hi Ron.

> Why does everyone rag on Cox?

Everyone, everywhere rags on their local cable company. :-)

> Remember, also, that Cox *does* have competition: xDSL!!!!

[soapbox mode on!]

Yes, at the "higher" level (a different type of service), they do. But there
is no competition within the cable service. Why not? Cox manages to carry
more than one TV network, don't they?

How would you feel if tomorrow Cox told you that no longer would they be
carrying any network other than CBS. Or, worse yet, just their own network!
You could claim that they compete with Broadcast TV, but that is only partially
true.

Yes, some cable companies actually tried this sort of thing early on but the
FCC forced them to allow access to at least all of the local stations.

Why should it be any different for the Internet? Yes, there is a need for a
"natural monolopy" when it comes to running the cable and phone wires, but
that's all. The gradually growing competition between multiple local phone
companies was something that the courts and the FCC pushed hard for. As a
result, you can choose your ISP. You aren't limited to just BellSouth.

There is no reason, technical reason that is, why there shouldn't be multiple
ISP's allowed on the cable system. Indeed, if this were so then @Home going
under wouldn't have been anywhere near the "event" it was. But even then,
rather than delivering on their promise to allow open access after the initial
contract with @Home was up, Cox took it a step further and took over the
service themselves.

A phone company posts a bond with the State to ensure that they will perform.
Last I heard, cable companies don't. Phone companies pay for the wiring
right-of-ways. Cox does to - but only for TV. In Jefferson Parish, for
example, they are being sued by the parish because (among other things) they
aren't paying for using the parish's right-of-ways to distribute phone and
Internet services. So they are making money off the parish's resources with no
payback to the parish.

Besides the revenue, the parish realizes how many people would be upset with
the (the Council) if Cox were to close up shop. They are under contract to
provide TV but not phone and Internet. So what would stop them from dropping
these services - leaving a lot of people with nowhere to turn. Some people
here said how upset they were when @Home when under. How upset would they be
if Cox said "no more Internet" tomorrow? What would stop them?

By the way, price Cox's Internet service if you do not get TV service from
them. Or, if you are a business, try getting Cox to run a line to your
business for just Internet service. Cox does what is most profitable for them.
 This makes sense - for Cox, but not necessarily for you and me.

Thus the sticky question of letting a for-profit company function as a
monolopy. They don't act in the public's interest, unless it happens to
benefit them too. Open-access would allow multiple ISP's to service cable
customers. It would provide competition which usually helps the comsumer in
the long run.

Note: I don't blame Cox. They are acting just as a for-profit business
should. I blame the Council for not anticipating this.

> In this case, BS doesn't think
> that my [and all the people near me] business is worth it enough to
> build out another CO nearer to a neighborhood ...

DSL is still a realatively new technology. BellSouth has been right up front
as one of the leaders in the field, I think. ADSL service started just over 3
years ago. New Orleans was one of the first 6 cities in BellSouth territory to
have ADSL.

It takes time and money to add ADSL equipment to the Central Offices. They
also had to add capacity to their ATM backbone to carry the DSL traffic between
the CO's and the ISP's. ISP's had to set up, too. Bell South is very close
(if not there already, I'm not sure...) to having 100% of it's CO's equipped
for ADSL.

Other suppliers have tried and generally gone belly-up, with Covad being the
big exception in this area. Even so, Covad's coverage does not include all of
the BellSouth CO's.

Yes, that still leaves some areas (about 35%) without ADSL coverage. BellSouth
has gradually been deploying remote DSLAMs in those areas. Again, it takes
time. The wiring in the field was not put in with ADSL in mind. Installing a
remote DSLAM is not a trivial thing. In spite of this, there are hundreds of
them around the state already.

I just saw a report from BellSouth yesterday. It said that their overall ADSL
coverage was 76%. Going from 0% to 76% in 3 years isn't bad. Do you know how
long it took to implement ISDN? About 20 years. But that was before
competition in the phone industry.

Sure, BellSouth did the most profitable part first. That meant that they
started with CO's in big cities. Then they did the rest of the CO's because
it's cheaper to install a DSLAM inside an existing CO than to build a remote
DSLAM (which only services a small group).

Unfortuanately, the FCC has not seen fit to push for open-access in the cable
industry. Indeed, just the opposite! Toss in some well-meaning, but totally
misdirected legislators like Tauzin, and you might see the phone industry
reverting to less competitive days too. I hope not, but that's what is going
on in the FCC and Congress right now.

btw - It took Cox a few years to replace cable so that they could offer
Internet service, too. :-)

I'm a one-man ISP yet I compete with BellSouth, AOL, MSN, etc for dial-in, ISDN
and ADSL customers and I do OK. I can't compete on the cable system which my
taxes made possible, however. Simply put, it isn't fair.

[soapbox mode off]

John

John Souvestre - Southern Star - 504-888-3348 - http://www.sstar.com
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Received on 12/15/02