The California Public Utilities Commission says it can regulate DSL

April 3, 2002 4:27 PM

The California Public Utilities Commission says it can regulate DSL In what is being hailed as a victory by the California ISP Association, the CPUC has ruled that it will regulate DSL providers similar in manner to the state's power and telephone utilities. While this move could certainly curtail the big boys like PacBell from running roughshod over their smaller competitors, it seems like small, locally-owned ISP's may not have the resources to withstand state scrutiny. Of course, the CPUC could handle this issue as well as they handled the so-called power 'crisis' in the state last year. Is more regulation better than less?
posted by WolfDaddy (8 comments total)

ive had two experiences with DSL here in California: my first was glorious, i signed up with a provider that didnt charge me once in the 14 months that i was with them.

strangely, they went out of business, along with a bunch of dsl providers, who, i imagine, did charge their customers.

now i have PacBell and for the exception of one very dark weekend, all has been well.

i have not heard any complaints from other PacBell customers here in LA, and i wasnt aware that there was any need for a commission to regulate this industry.

in the wake of all of the other smaller DSL companies that bit the dust, I wonder if this will hurt this market or help it.
posted by tsarfan at 4:51 PM on April 3, 2002

Is more regulation better than less?

My guess: probably no. Prices will probably go up, and a few small businesses will go out. Maybe then they will be compelled to atone for their sins and start subsidizing DSL as well as regulating it.
posted by insomnyuk at 6:01 PM on April 3, 2002

And I might add that this regulation is only necessary because of the government granted local phone company monopoly.
posted by insomnyuk at 6:11 PM on April 3, 2002

Good, interesting post!

Here in NY, I don't think there are any "little boys" to be affected by such a ruling, should it come.

What was the premise by which DSL wasn't regulated?
posted by ParisParamus at 6:22 PM on April 3, 2002

What was the premise by which DSL wasn't regulated?

ParisParamus, the CISPA filed a class-action lawsuit on behalf of its ISP membership claiming that PacBell uses unethical business practices that make it impossible--or at least very, very difficult--to move one's DSL service from one ISP to another. CISPA claims that if DSL were a regulated utility, that wouldn't happen.

However, DSL is already, in theory, regulated by the FCC. The transmission of information via DSL through federally-regulated and subsidized telecommunications networks made FCC regulation of DSL almost a no-brainer. The CPUC doesn't want the responsiblity of ensuring that customers are getting their promised bandwidth, nor do they want to handle price-gouging or bait-and-switch claims, they're more than happy to leave that stuff to the Feds. The CPUC just wants to monitor 'service levels'...whatever that means.

This, to me, isn't replacing one bureaucracy with another, it's inserting yet another layer of bureaucracy into the whole mess. Information may want to be free, but it sure must have a hard time moving through all the red tape.
posted by WolfDaddy at 6:38 PM on April 3, 2002

Cable is not an option on my side of the street (I mean that literally), so I was thrilled when DSL (Yahoo BB) finally came to Kyoto in November.

Funny thing is, like Tsarfan above, they didn't bill me until February. Still, they only bill me ¥3166/mo. ($24) including tax. They haven't charged me the ¥500 monthly router rental yet.

Service has been trouble-free, and $24 is a lot cheaper, for 24/7 broadband, than the typical $100-175 I was paying NTT for a few hours of 56kdialup.

YahooBB, which is in partnership with Softbank, got the government to force NTT to lease its lines outright, whereas with other DSL providers NTT was able to bill each subscriber something like ¥800/mo. for use of the line for BB (in addition to basic telephone charges). So I don't pay NTT at all for BB, but most telecom industry analysts estimate that BB providers are losing money and their business will eventually be re-absorbed by NTT when they eventually fold. So they say.
posted by planetkyoto at 11:02 PM on April 3, 2002

I am an ISP, though not in California. I can't buy a point to point DSL line that connects my office to my home. If I want DSL in my home I have to buy IP transit from the phone company.

DSL is the only phone company service that doesn't have point-to-point service available. I can put a phone line in my office, and dial up, or put in an ISDN line in both places, and digitally dial in(which is what I do), or I can get a fraction or full T-1 at either end and connect point-to-point. But I can't do that with DSL, I'm required to buy the IP service and route through the phone company's IP network.

The only solution to the failure of the '96 Telecom Act is structural separation; a separate company manages local loops, and people offer services like IP and dial-tone and long-distance voice from a common CO.

And the companies managing local loop are spun off, retaining shareholder value, just like the Baby Bells did, and the local loop is a regulated monopoly, while services are completely de-regulated.

Then you have choice in voice and IP, just like you do in long distance now.

But that's not going to happen, even though it would create a better public communications network. Care to guess why?
posted by dglynn at 11:38 PM on April 3, 2002

I used to be rather involved in the world of DSL when I worked for Covad, and I can tell you that getting state regulators involved is, believe it or not, a good idea.

The real impetus for this action are the negative effects that Californians suffered when companies like Northpoint and Rhythms went under, cutting off what is to some people (and numerous businesses) an essential utility with hardly any warning time. When this happened with Northpoint, the California P.U.C. tried to block Northpoint's immediate shutdown so that their customers could transfer to another provider, but it was already too late.

There are other very good things that California's P.U.C. can do for its citizens that the FCC hasn't been willing to do... perhaps the biggest of these is actually insisting that closed monopolies open their lines/cables to competition.

In other words, if there is going to be a defacto monopoly (or even a largescale competitive advantage) established over a given area, such as those which are given to phone and cable companies, that given area should have the right to set the policies under which such a competitive advantage... in other words, they should insist on allowing some degree of competition... which tends to mean that the consumer saves money.

In other words, the state is doing something right for a change.
posted by insomnia_lj at 3:33 PM on April 4, 2002