Response to the FCC DSL Order

August 5, 2005

I spoke with Peter Radizeski, executive director of Independent ISPs for America, today regarding the FCC's Order eliminating the mandate that ILECs must share their DSL lines with competing ISPs.� Radizeski said that the Order essentially makes an already�bad competitive environment worse for ISPs.� The future looks pretty bleak.

Specifically, Radizeski said that two major things will shakeout of today's new rule.� First, according to Radizeski, communities will lose their local technology experts - the people who know how to set up wireless LANs and other networks.� How, you ask?� Radizeski said that smaller ISPs�normally also serve as your local small computer retailer.� Business owners provide both services as a matter of survival, as neither the ISP nor the computer retail side can stand alone.� Today, the FCC essentially put these people out of business, according to Radizeski.

Second, and perhaps even more insidious to consumers, is that today's ruling opens the door�for a "metered" Internet.� Radizeski said that telcos�have been�green with envy�over how cell phone companies get away with�charging consumers for every text message that they send and receive.�

"You don't think it drives them crazy that you can IM all day for just�$14.95 per month?" Radizeski asked rhetorically.

That explains why�companies such as Google and Yahoo�opposed deregulating DSL.� After all, who is going to pay a per minute fee to shop online?� Well, Radizeski said, there�may be a future�for that as well.

There are three groups of consumers that are affected here, Radizeski said.� The older crowd, whose members don't�access the Internet.� They obviously won't feel the change a bit.� The 30+ crowd, who will �probably revolt.� The twenty-something crowd, however, have already bought into the per-transaction relationship with their cell phones.

"While I was waiting for Chinese food the other day, there was an 18-year-old girl sitting next to me who was text-messaging with one hand the whole time," Radizeski said.� "I said to myself, 'Wow, this is it.'� It's all digital and they're already conditioned for it."

The future also looks bleak for anyone looking for the mythical third pipe to the home.

"WiMAX has been the buzzword to use to talk about anything Wi-Fi," Radizeski said.� "WiMAX is not the answer."

Indeed, Radizeski said that there is a big problem with packet loss from interference from other LANs.

BPL looks even worse, considering that utilities with whom Radizeski has spoken have said that it would cost billions of dollars to upgrade their power grids to deliver the service.� Not to mention the interference problem with other signals.

"The facilities can barely handle [delivering] electricity," Radizeski said.� "Nevermind the interference [issue]."

Radizeski also said that cable companies, who�currently have the largest market share for broadband access,�could find themselves in hot water with the amount of debt that they are carrying for building out to deliver triple play.

Cable companies are limited by the amount they can charge (about $100 a month) before consumers "freak out."� With a price war with telcos pending, cable companies are going to have a hard time paying back the $50 billion they owe to creditors.

"I try to look for some kind of positive spin [regarding today's FCC Order], but I just can't find it," Radizeski said.