[comp.dcom.telecom] LEC Monopoly and Cable TV

jackson@ttidca.tti.com (Dick Jackson) (08/05/89)

Is anyone else in this group interested in the *future* of the telephone
system?  There are lots of topics that might be discussed, but just to test
the waters let me try just one -- the continued monopoly of the LECs for
basic plant and services.

Its clear that the LECs really want to make a pile of money out of
providing enhanced services but are not really willing to do what the FCC
and the other players want in order to ensure fair competition.

An example of the LEC's bid for more revenue is their request to be
allowed to operate cable TV, i.e. to deliver entertainment to the home.
In my, opinion to permit this at the present time would be ludicrous given
the operating companies non-clean record on cross subsidies and trampling
on smaller companies they perceive as competitors.

HOWEVER, and this is the point I would like to see discussed, it seems to
me fine to allow the local carriers to deliver cable TV as long as the
CATV companies are allowed to offer dial tone.  Is this feasible?  I
guess, for a start that the cable systems would have to be re-engineered,
probably with fiber, and there might not be enough money in the (phone)
business to make it a good investment.  But it is going to take something
extraordinary to get fiber into homes, since telephone service alone can't
justify it.

Dick Jackson

[Moderator's Note: I am not quite clear on your use of the abbreviation
'LEC'. Would you explain the abbreviation, please? But to provide one opinion
to your question, I think the telcos should stay in the phone business
and out of the cable TV business.  Let's see what others here think.  PT]

ellisond@ncar.ucar.edu (Dell Ellison) (08/09/89)

In article <telecom-v09i0275m02@vector.dallas.tx.us>, jackson@ttidca.tti.com
(Dick Jackson) writes:
> Is anyone else in this group interested in the *future* of the telephone
> system?  There are lots of topics that might be discussed, but just to test
> the waters let me try just one -- the continued monopoly of the LECs for
> basic plant and services.

> An example of the LEC's bid for more revenue is their request to be
> allowed to operate cable TV, i.e. to deliver entertainment to the home.
> In my, opinion to permit this at the present time would be ludicrous given
> the operating companies non-clean record on cross subsidies and trampling
> on smaller companies they perceive as competitors.

> [Moderator's Note: I am not quite clear on your use of the abbreviation
> 'LEC'. Would you explain the abbreviation, please? But to provide one opinion
> to your question, I think the telcos should stay in the phone business
> and out of the cable TV business.  Let's see what others here think.  PT]

Actually, I would like to see the phone company provide cable TV, etc...
Because:

   1.  The Cable TV companies in many cases are 'trampling' on the
       consumers, because they have no competition (many times) in
       a particular area.  Many times they have little selection,
       poor service and high prices.  This solution would provide
       some competition for them.

   2.  I am very much in favor in the development of new technologies
       and higher efficiency.  This would be a much more efficient
       and feature-rich system.  (Not to mention the great benefits
       of direct digital connections to our home computers.)

I would like to see this happen.  (This would also bring picture
phones a lot closer to reality.)

rv01@gte.com (Robert Virzi) (08/10/89)

> In article <telecom-v09i0275m02@vector.dallas.tx.us>, jackson@ttidca.tti.com
> (Dick Jackson) writes:
> > Is anyone else in this group interested in the *future* of the telephone
> > system?

Very much so, both professionally and as a consumer.

> > An example of the LEC's bid for more revenue is their request to be
> > allowed to operate cable TV, i.e. to deliver entertainment to the home.
> > In my, opinion to permit this at the present time would be ludicrous given
> > the operating companies non-clean record on cross subsidies and trampling
> > on smaller companies they perceive as competitors.

As witnessed by the increasing interest in video from all the phone
companies, I suspect they think they can make Big Money in video to the
home.  They are probably right.  I would like to see the LECs given the
Greene light (;-) to provide video to the home, with one caveat.  They should
be required to give equal access to other CATV and video providers on
a home-by-home basis.  I picture a plan similar to that for long distance
telephone where the user selects a primary video provider and might even
have access to other video providers through access codes.

This does several things.  First, it opens the doors to competition and
increases my choices as a consumer.  Don't like your towns current CATV
company -- scrap 'em and pick another.  This should make video providers
more sensitive to the need to provide high levels of service.  (Ever
wonder why your cable TV offices are closed nights and weekends?)

It also makes narrowcasting more attractive.  I can start a business
delivering special interest videos to left handed albinos and still make
money because I would have access to all the left handed albinos in the US.
Groups of similar minded people can get the sort of programming they want.
A parallel argument is that this type of system would free us from the
tyranny of democracy.  As long as their are multiple conduits, there is no
need to make them all attractive to the majority.

I say let the LECs provide content, as long as they provide comparable
transport for other content providers.

DISCLAIMER: These views are in no way representative of the official
company line, at least to my knowledge.  I'm not even sure they fairly
represent what I think.

--

-Bob Virzi                    | Innuendo ...
 rv01@gte.com                 |
 ...!harvard!bunny!rv01       | ... and out the other.

deej@bellcore.bellcore.com (David Lewis) (08/10/89)

In article <telecom-v09i0275m02@vector.dallas.tx.us>, jackson@ttidca.tti.com
(Dick Jackson) writes:
> An example of the LEC's bid for more revenue is their request to be
> allowed to operate cable TV, i.e. to deliver entertainment to the home.
> In my, opinion to permit this at the present time would be ludicrous given
> the operating companies non-clean record on cross subsidies and trampling
> on smaller companies they perceive as competitors.

> HOWEVER, and this is the point I would like to see discussed, it seems to
> me fine to allow the local carriers to deliver cable TV as long as the
> CATV companies are allowed to offer dial tone.  Is this feasible?  I
> guess, for a start that the cable systems would have to be re-engineered,
> probably with fiber, and there might not be enough money in the (phone)
> business to make it a good investment.  But it is going to take something
> extraordinary to get fiber into homes, since telephone service alone can't
> justify it.
>
> Dick Jackson
>
> [Moderator's Note: I am not quite clear on your use of the abbreviation
> 'LEC'. Would you explain the abbreviation, please? But to provide one opinion
> to your question, I think the telcos should stay in the phone business
> and out of the cable TV business.  Let's see what others here think.  PT]

LEC == Local Exchange Carrier.  A.k.a. Exchange Carrier.  Encompasses
Bell Operating Companies and "Non-Bell Operating Companies" (a terribly
biased term...).  Bells+Independents.  The guys who provide intra-LATA
service.

My opinion -- the LECs are common carriers.  They move information from
one place to another for anyone who desires, at a common price.  If a
LEC can figure out a way to provide video distribution as a common
carrier -- and make money at it -- more power to 'em, let 'em in.

Realize, of course, that common carriage means that the LEC charges the
same price to NBC and to Joe's Video for carrying an hour of
programming -- regardless of the demand for NBC versus the demand for
Joe's Video.  It could be run as pay-per-view -- the customer pays ten
cents an hour for NBC and one cent an hour for Joe's video -- but in a
market used to grazing through 35 channels, don't count on much
market penetration pricing this way.

Beyond the questions of "should telcos be allowed to offer cable" and
"should cable companies be allowed to offer dialtone", keep in mind that
there is also the fact that in the majority of this country, both telcos
and cable companies have exclusive franchises (read: regulated
monopolies) in either the municipality or state.  Before you can start
talking about cable/telco competition, you have to talk about
competition period...

Disclaimer: Bellcore doesn't pay me to have opinions about cable TV.

--
David G Lewis				...!bellcore!nvuxr!deej

			"If this is paradise, I wish I had a lawnmower."

lars@salt.acc.com (Lars J Poulsen) (08/12/89)

In article <telecom-v09i0289m05@vector.dallas.tx.us> nvuxr!deej@bellcore.
bellcore.com (David Lewis) writes:
>there is also the fact that in the majority of this country, both telcos
>and cable companies have exclusive franchises (read: regulated
>monopolies) in either the municipality or state.

Unfortunately, an exclusive cable franchise does not always imply that
the service is regulated. In Santa Barbara, the city and the county
both signed exclusive franchise agreements with Cox Cable. The
agreement gives exclusive rights to Cox, and sets technical standards
for the service while requiring the municipal authority to review
rates. Two years into the agreement, the FCC came out with a ruling
that disallowed the regulatory oversight if the cable system was not in
a monopoly position. The cable company promptly produced a study
showing that the average household can receive 6.2 channels off the
air, and thus there is no monopoly. At this point, the cable company
sets rates without review, and they grant themselves waivers from the
technical standards based on economic viability. Public and government
access channels and the exclusivity of the franchise are about the only
provisions that are upheld.

I do not know of ANYONE here who can receive 6 channels off the air. To
receive anything other than the local ABC affiliate would require a
significant amount of rooftop gear; probably enough that a sattelite
dish would be cheaper. The "local" outlets of the major networks are
as follows (distances very approximate):

	3  - KEYT Santa Barbara ABC - local
	6  - KSBY San Luis Obispo NBC - 60 miles
	12 - KCOY Santa Maria CBS - 45 miles
	28 - KCET Los Angeles PBS - 120 miles
	63 - KADY Oxnard Independent (Riklis) - 40 miles

I would be happy to see the exclusivity clause go; then I could put up a
pair of sattelite dishes and share the signal with my neighbors.

I must admit that I am fairly satisfied with the programming that the
cable company provides (though I'd like to get them to carry NASA
Select during major space missions) but then I don't watch more than
about an hour per month total. It just bugs me that they entered into a
contract which was then turned on its head.

Followups are unlikely to be relevant to be relevant to telecom.
/ Lars Poulsen <lars@salt.acc.com>   (800) 222-7308  or (805) 963-9431 ext 358
  ACC Customer Service              Affiliation stated for identification only
                My employer probably would not agree if he knew what I said !!

dave@uunet.uu.net (Dave Levenson) (08/13/89)

In article <telecom-v09i0281m03@vector.dallas.tx.us>, asuvax!gtephx!ellisond@
ncar.ucar.edu (Dell Ellison) writes:
> In article <telecom-v09i0275m02@vector.dallas.tx.us>, jackson@ttidca.tti.com
> (Dick Jackson) writes:
> > Is anyone else in this group interested in the *future* of the telephone
> > system?
 ...
> > An example of the LEC's bid for more revenue is their request to be
> > allowed to operate cable TV, i.e. to deliver entertainment to the home.
 ...
> > [Moderator's Note: I am not quite clear on your use of the abbreviation
> > 'LEC'. Would you explain the abbreviation, please?
 ...
LEC usually refers to the Local Exchange Carrier
 ...
> Actually, I would like to see the phone company provide cable TV, etc...
> Because:

>    1.  The Cable TV companies in many cases are 'trampling' on the
>        consumers, because they have no competition (many times) in
>        a particular area.  Many times they have little selection,
>        poor service and high prices.  This solution would provide
>        some competition for them.

>    2.  I am very much in favor in the development of new technologies
>        and higher efficiency.  This would be a much more efficient
>        and feature-rich system.  (Not to mention the great benefits
>        of direct digital connections to our home computers.)

> I would like to see this happen.  (This would also bring picture
> phones a lot closer to reality.)



I'm a bit curious:  Why do you think that replacing the existing
Cable TV monopoly with the local Telco monopoly is going to change
anything?  Or are you suggesting that the local cable company could
continue to do business in the face of competition from the local
telco?


I would expect to see the telco undercut the cable company through
cross-subsidization from telephone rate-payers, until there's only
one utility left, providing both TV and phone service.


If you _really_ want to make it competitive, let's discuss allowing
the present Cable TV companies offer point-to-point voice
communication -:) !


--
Dave Levenson                Voice: (201) 647 0900
Westmark, Inc.               Internet: dave@westmark.uu.net
Warren, NJ, USA              UUCP: {uunet | rutgers | att}!westmark!dave
[The Man in the Mooney]      AT&T Mail: !westmark!dave