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Open Letter to FCC Chairman Powell

CowboyNeal posted more than 11 years ago | from the pushing-for-telecom-demise dept.

The Internet 298

Adina Levin writes "An open letter to FCC chairman Michael Powell signed by internet and tech industry pioneers explains why the government shouldn't prop up the ailing telecom behemoths. Telecom companies bought expensive network technology with long bonds. That technology has been made obsolete by gear getting faster and cheaper all the time by Moore's law and Metcalfe's law. The telecom companies are asking for the equivalent of a bailout for their investments in sailing ships after the advent of steam. The way to speed the deployment of broadband to homes isn't to prop up businesses based on old technology, but to let uncompetitive businesses 'fail fast', and let new competitors play."

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Oh my god (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#4502918)

Have I finnaly achieved the ultimate?

First Post.

first insomniac post (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#4502923)

i must sleep. Lameness filter encountered.

Privatize them! (-1, Flamebait)

tobo (307569) | more than 11 years ago | (#4502930)

Nahh. Privatize everything. It works.

Government subsidies are bad.

Markets work, u know? Otherwise we'll be living in communist utopia ruled by evil old men from Moscow today.

Re:Privatize them! (0)

Anonymous Coward | more than 11 years ago | (#4502936)

Privatize everything. It works.

Like the UK railroads these days?

Re:Privatize them! (4, Insightful)

StrawberryFrog (67065) | more than 11 years ago | (#4502972)

Nahh. Privatize everything. It works.

You are trolling, aren't you. In case you don't know about it, go look up Railtrack - the UK privatised rail company that recently declared bankrupcy, leaving the UK govt with the options of a bailout of closing down the rail network. They chose the bailout. The sucessor company (Network rail) is a not-for-profit co.

Re:Privatize them! (1)

StrawberryFrog (67065) | more than 11 years ago | (#4503494)

Sorry, that should read bailout or closing down the rail network

Re:Privatize them! (5, Insightful)

RobinH (124750) | more than 11 years ago | (#4503030)

Government subsidies are bad.

Riiiight. The streets around your house will look awful funny when only 70% of your neighbours pay their road construction bills. 30% of your street will be dirt road, the rest paved?

I suppose education should be completely privatized too. That way, the only chance a child from a lower economic class has to make something of themselves will be torn away because their parents can only afford to choose two of these three alternatives: 1) feed them 2) clothe them 3) educate them.

I suppose, by your logic, that I should have to pay for my own dedicated wiring from my house to the electricity provider of my choice, right? Would we really have, like, 99% of all houses connected to the electical grid (therefore, accelerating the growth of other technologies like electrical appliances) if distribution was privatized? Would there be any incentive to have a step down station in bumsville, nowhere?

Markets work, u know?

Markets work with quite a bit of help. Do you think they'd work if we didn't have laws regulating fraud, disclosure, etc.?

Re:Privatize them! (1)

Omkar (618823) | more than 11 years ago | (#4503134)

The role of the government is primarily to establish a level playing field. The private sector, in the long term, is far more efficient than government services.

For example, the wave of privitization in the early 90's in India. Consumers benefitted tremendoulsy from the competition.

Re:Privatize them! (2)

RobinH (124750) | more than 11 years ago | (#4503390)

The private sector, in the long term, is far more efficient than government services.

I was responding to the original claim that everything should be privatized. I agree that privatization is good in some cases. However, there IS a reason for public funding of certain infrastructure.

You must admit that public education is better at establishing "a level playing field" than completely privatized education. Do you really think that the child of a wealthy person *deserves*, or has a *right* to a better education than any other child? Do you think it's acceptable that a child could miss out on an education because their parents can't afford it?

We have public funding for things we consider basic rights. We all think everyone has a right to an education, so we constructed systems to give everyone access to those services. We also think everyone should have access to clean water, so we have municipal water utilities. There is room for discussion of these issues, e.g. an American would say that health care is a priviledge, whereas a Canadian would say that access to basic health care is a right. That's why Canada has a universal health care system, and the U.S. does not.

The reasons why we choose to create public services is because of the argument that *everyone* benefits when access is available. To go back to previous examples: if you use public funds to connect everyone to the electrical grid, then you've increased the demand for electrical appliances. If you use public funds to build roads, then you make it easier for all companies and individuals to do business. If you use public funds to educate all children, then more kids will grow up to contribute to your economy, which makes everyone wealthier. So, in the long run, I would suggest that sometimes the private sector is *less* efficient.

Re:Privatize them! (0, Flamebait)

nmg (614483) | more than 11 years ago | (#4503409)

Actually, with fully privatized education, competition would likely drive prices down to levels affordable to most people. Even if it didn't, there would be plenty of charities or other private organizations willing to help out. Even so, I don't really support fully private education. It seems to me there needs to be a heavily standardized educational "base." That's another post, though.

Re:Privatize them! (1)

RobinH (124750) | more than 11 years ago | (#4503553)

It seems to me there needs to be a heavily standardized educational "base."

I agree. I think that goes along with the whole "level playing field" idea.

But if privatization always works, why are airports going back to federally employed security? It's precisely because they're trying to enforce a standardized base level of security. The private security firms are great at providing low prices, but they don't seem capable of providing adequate security at the same time. It's the whole lowest bidder problem that we tend to get into whenever the government starts asking for bids.

I agree (-1, Redundant)

Anonymous Coward | more than 11 years ago | (#4502931)

1. write a letter
2. [...]
3. [...]
4. do the hustle
5. [...]
6. PROFIT

Legitimate reason for bailout? (5, Insightful)

httpamphibio.us (579491) | more than 11 years ago | (#4502935)

Doesn't their existing infrastructure, and social dependency on that infrastructure, give them a somewhat legitimate need for a bailout? If other, smaller, more efficient companies can replace everything the telecom behemoths do, then let the big boys suffer, but is that the case? Can smaller tech savvy companies do everything the large telecoms do or are we talking strictly about broadband internet?

Re:Legitimate reason for bailout? (0, Flamebait)

tobo (307569) | more than 11 years ago | (#4502952)

Well, the point is that it is fundamentally wrong for the government to do anything to hinder the workings of the market economy.

This is why we should seriously consider abolishing the government and leaving everything to the market forces.

People like Friedman and Hayek have proved that markets are the ultimate source of truth, at least in this world.

Though it is always funny to read how commie CEO's beg for state subsidies to help their mismanaged companies.

The market economy answer is of course: sell it if it doesn't work.

Re:Legitimate reason for bailout? (4, Insightful)

evbergen (31483) | more than 11 years ago | (#4502991)

This is why we should seriously consider abolishing the government and leaving everything to the market forces.

I don't know about you, but I'd sure miss the powers granted to me by the fact that I live in a democracy right now, and the rights granted to me by my country's constitution.

Go back to the jungle, or participate in a free fight, if you think that's best for humanity. But please allow the rest of us to strive for some civilization. Thanks.

Re:Legitimate reason for bailout? (0, Insightful)

Anonymous Coward | more than 11 years ago | (#4503146)

I don't know about you, but I'd sure miss the powers granted to me by the fact that I live in a democracy right now, and the rights granted to me by my country's constitution.


You are not speaking of the United States, are you? I don't know of any rights granted to me by the constitution. If anything, the people have ceded certain rights to the government.

Re:Legitimate reason for bailout? (0)

Anonymous Coward | more than 11 years ago | (#4503223)

you were responding to was is called a troll.. the media, printed or otherwise is a powerful thing and people are actually paid to sit here and post bullshit on slashdot.. it helps form public opinion.. it's always worked this way, no big secret.. expect to see more of it as the youth come to the internet instead of being good amercians and doing the vulcan mind meld with that commie TV set

Re:Legitimate reason for bailout? (1)

evbergen (31483) | more than 11 years ago | (#4503351)

Yes, and have given the rest to the corporations for free. Because nobody bothers to limit the political power that comes with their wealth, they are virtually in complete control of what once was a democracy.

It's sad, considering the great way how it was started, but I'm glad that I was not speaking of the United States when I referred to my country.

Re:Legitimate reason for bailout? (2)

cp99 (559733) | more than 11 years ago | (#4503019)

Well, the point is that it is fundamentally wrong for the government to do anything to hinder the workings of the market economy.

Fundamentally wrong? What tablets of stone are you getting this from?

Methinks you should apply a little skeptism before making such broad statements as these.

Re:Legitimate reason for bailout? (5, Insightful)

October_30th (531777) | more than 11 years ago | (#4503084)

This is why we should seriously consider abolishing the government and leaving everything to the market forces.

Like health care? "Sorry, sir. I know there's a gaping wound in your skull and that it hurts, but your credit is no good here. Please go away and die outside in the gutter with all the other poor people."

Like law enforcement? "I'm sorry, sir, but there's nothing we can do. You have not paid for our police services. We cannot dispatch officers even if there's a murderous psychopath banging on your door with a bloody knife in his hand."

Like rescue services? "I'm sorry to hear that your house is on fire, sir, but we are a business not a charity. You should remember to pay your bills next time."

And so on...

People like Friedman and Hayek have proved

You can't really prove anything in even hard sciences like physics. Saying that something has been proven in economics or sociology is just ridiculous. Like psychology, economics and sociology are not hard, predictive sciences (some would say that they're not science at all) in the same sense as physics or chemistry.

If capitalism were a scientific theory, it would have been dropped a long time ago because it has no real predictive power and often contradicts with the real world observations.

Re:Legitimate reason for bailout? (0)

benzapp (464105) | more than 11 years ago | (#4503251)

The primary reason most people advocate capitalism is ETHICAL, not scientific. It was liberals and their endless dreams of micromanaging the perfect society that gave birth to that study.

Capitalism is by its nature free, it is how human beings behave when they are not acquiesing to the restrictive, violence backed will of the government. It is one man, exchanging value for value.

The reason statist economic policies always fail is because they turn free humans into criminals, and pursues them as such. The problem is, under statist regimes, too many people are treated as criminals. The end result is a society full of people who scoff at law, and refuse to participate in a corrupt system of government.

Capitalism will always win for this reason.

As far as your other statements, many of us wish there WAS no police force. I am perfectly capable of defending myself, and have a license to carry a Ruger .38 to do so. Health care? You have only to go to a socialist country to see how that works. They won't throw you out in the gutter, but they will make you get in line, possibly for months to remedy serious ailments such as cancer. Even dialysis machines are hardly easily accessible.

Socialism on paper provides these services, but in reality, it is plagued by shortages in materials, a dejected and lazy workforce, and a sense of entitlement that makes everyone not really want to work.

You need to open your mind and realize that government is not the solution. You need to think about more than one possibility. Chanting to yourself over and over again "Government can solve my problems, government can solve my problems" is not going to work.

Re:Legitimate reason for bailout? (5, Insightful)

October_30th (531777) | more than 11 years ago | (#4503703)

and have a license to carry a Ruger .38 to do so.

And I am happy to know that if I am burgled or mugged the criminal will rarely have a gun and that it's even rarer that the gun will be used. Regardless of whether the cops will catch the criminal, I can cope with losing some money or property.

Health care? You have only to go to a socialist country to see how that works. They won't throw you out in the gutter, but they will make you get in line, possibly for months to remedy serious ailments such as cancer.

Well, you could say I've been to a socialist country: I was born in a one with mostly state controlled economy. I am currently living abroad in a Northern European country which has had a large socialist party in the government for the last twenty decades. And you know what? The living standards are excellent in both countries. Working public transportation, no people living under the poverty line (check out the US and UK stats in the CIA worldbook for comparison), free public schooling, public libraries and goverment subsidized university level education to allow even the low wage blue collar workers' kids to have an advanced degree if they so choose. Crime is low because the social "safety net" will provide you with basic necessities even you go completely bankcrupt.

As far as your medical care argument goes, you couldn't be more wrong when it comes to Northern Europe and Scandinavia (UK public health care is in real shambles, though). As I've pointed out in one of my recent posts, I've undergone several surgeries. The latest problem with the eye was diagnosed at a private clinic (you know, private clinics are allowed even if the public health care is run by the government!), I got a referral to the local hospital (state run university hospital) and was under the knife in a week. I spent another week in the ward and paid $200 for that - the $8000 operation itself was paid by the society. I pay the progressive 28% income tax gladly for a system like that that is accessible to all citizens regardless of their income (unlike insurances).

You should know more about practical socialism before your spout nonsense like that. That's the kind of black and white reasoning that's not realistic. There is a middle ground between dog-eat-dog capitalism and total commitment to a government run economy, you know.

Re:Legitimate reason for bailout? (1)

lovebyte (81275) | more than 11 years ago | (#4503348)

Like law enforcement?
In fact it was like this in Britain with the fire brigades. Each fire brigade was owned by an insurance company and they would fight a fire in your house only if your house was insure by the appropriate insurance company, while letting the fire burn your neighbour's house. This crazy system was later replaced by local/national governement controls.

Another area where governements are necessary is pollution control. The private electricity industry in the US pollutes (proportionally) 6 times more than the (previoulsy or still) state owned electricity industry in Europe. This is a staggering number.

Re:Legitimate reason for bailout? (2, Insightful)

discipledaniel (454781) | more than 11 years ago | (#4503677)

Like health care? "Sorry, sir. I know there's a gaping wound in your skull and that it hurts, but your credit is no good here. Please go away and die outside in the gutter with all the other poor people."

It might not be that way with a head injury... but it's that way with AIDS patients in lots of cities. Not to mention those needing an organ donation. And lots of other cases since the HMO's became popular.

neo-economic-liberal bullshit (5, Insightful)

dmiller (581) | more than 11 years ago | (#4503086)

Well, the point is that it is fundamentally wrong for the government to do anything to hinder the workings of the market economy.

I sincerely hope that you are joking, or playing devil's advocate. The "market economy" is a fiction, created by government contrivance. Do you really believe that it is some sort of objective truth? or that it is the ultimate expression of human desire for advancement?

The market economy has done such an excellent job in protecting the environment and promoting individual liberty. Ironically enough, the "free market" has given us the most blatent interferences in market freedom that we have seen.

This is not to say that the market is undesirable or is not an excellent allocator of (some) resources - just that is it insufficient as a complete societal model.

Re:neo-economic-liberal bullshit (0)

Anonymous Coward | more than 11 years ago | (#4503180)

sounds like you feel passionate about something, but there seems little coherance in what you say.. certainly hayek and friedman are not "neo" anything :-) please go read "The Architecture of Modern Political Power". That'll take about a week, but might help begin to crystalize the relationship between economics, politicals, and social science. Unfortunately it's a difficult read for our US "honor students".

Re:neo-economic-liberal bullshit (1)

NineNine (235196) | more than 11 years ago | (#4503565)

I sincerely hope that you are joking, or playing devil's advocate. The "market economy" is a fiction, created by government contrivance. Do you really believe that it is some sort of objective truth? or that it is the ultimate expression of human desire for advancement?


"Markets" form with or without goverments. People naturally trade goods and service ebtween each other. Try an Econ 101 class.


The market economy has done such an excellent job in protecting the environment


That's what lawsuits are for. The areas that are badly polluted in this country are polluted because they're public areas, and the gov't never sues private, polluting entities as they should.



and promoting individual liberty. Ironically enough, the "free market" has given us the most blatent interferences in market freedom that we have seen.


Individual liberty? Like what? National tracking system? That's the US govt. Wiretapping and email cracking? That's the US govt. How exactly has your "individual liberty" been harmed by a private entity? I'm really curious.

Re:Legitimate reason for bailout? (3, Interesting)

kubrick (27291) | more than 11 years ago | (#4503105)

People like Friedman and Hayek have proved that markets are the ultimate source of truth, at least in this world.

Economic 'proofs' aren't worth the paper they're written on, which is why the Nobel Prize for Economics is a joke. They may as well have one for psychology as well. :)

The Nobel Peace Prize is ludicrous as well, but that's because it's given as an encouragement prize... maybe Arafat could give his back now, for example. Oh, and because a Peace prize funded by the estate of an explosives developer seems... erm... inconsistent at best.

Re:Legitimate reason for bailout? (0)

Anonymous Coward | more than 11 years ago | (#4503341)

Actually, there is no Nobel Prize in economics. Alfred Nobel himself is believed to have had a deep disliking of economists (who can blame him?)
The prize is actually named "The Swedish central bank award for economics in memory of Alfred Nobel". Yes, they get it at the same ceremony etc, but it's not a "true" Nobel Prize.

von Hayek (2, Insightful)

Anonymous Coward | more than 11 years ago | (#4503106)

It's nice to see people mention Hayek and proper economics (not to be confused with Keynes, and the collectivist plutocracy the Central Bankers have ushered in).

I want to mention that Hayek, at least in "The Road to Serfdom", does not call for an abolishment of government. He seems to acknowledge, as many of us do, a need for it. Our founding fathers did.

The problem is, combined federal, state and local government here now represents about 50% of the market place, as opposed to around 5% prior to 1910. Truly this is *the* metric that shows clearly the US is now a collectivist / socialist enterprise.

History shows (Russia, National Socialist Germany, etc..) us that such a model does not work. It is a non competitive model. At best it can limp along, but will not provide liberty, self determination, self actualization. It cannot provide *opportunity* for a middle class. "We're in a tight spot!" - Oh Brother.

The states now feel the pinch (punch) of this last fed induced mania. For some excellent data and commentary on the current state, see Michael Hodges "Grandfather Economic Report". Best, Dave

Re:von Hayek (1)

Dean Sas (614171) | more than 11 years ago | (#4503361)

collective/socialist? :D you've just made me fall of my chair with laughing, thank you

Re:Legitimate reason for bailout? (2)

httpamphibio.us (579491) | more than 11 years ago | (#4503109)

This is why we should seriously consider abolishing the government and leaving everything to the market forces.

Couldn't this result in massive amounts of money being invested in social engineering to get us all to like the same things, meaning huge profits for companies?

Re:Legitimate reason for bailout? (1)

evbergen (31483) | more than 11 years ago | (#4503383)

Exactly. See "A Brave New World", by Aldous Huxley.

Re:Legitimate reason for bailout? (0)

Anonymous Coward | more than 11 years ago | (#4503121)

The logical end result of laissez faire capitalism is a monopoly in every market. Eventually the monopolies in each market will merge to form one uber-corporation that provides everything. At this point, the company has more power than the government itself, so basically you have either the embodiment of a corporate state or communism - if the ubercorp has all the power, it gets to determine who gets what.

Re:Legitimate reason for bailout? (1)

salemnic (244944) | more than 11 years ago | (#4503287)

Right, but that's why there are anti-trust laws. The government will in no way, shape, or form ever give up their ability (monopoly) to tax people, nor will they allow anyone else to usurp that ability. If a corporation shows they have too much power, they get stomped like everyone else.

Cheers,

S

Re:Legitimate reason for bailout? (1)

nmg (614483) | more than 11 years ago | (#4503465)

There's nothing wrong with monopolies. The only time a monopoly becomes a problem is when the government supports it--see Standard Oil. If a monopoly got into the position it's in because it is simply by far the best provider of a product or service, there's nothing wrong with that. If the monopoly starts to become lazy, overcharge, etc., then competitors will arise and provide necessary pressure.

A monopoly like Standard Oil could never happen under lassiez-faire capitalism, because the government can't make laws with respect to the economy.

That little nugget of naivete will stay with me... (0)

Anonymous Coward | more than 11 years ago | (#4503190)

...the rest of the day, I imagine. Intelligent people recognize the validity of hybrid solutions and not putting all your eggs in one basket--neither pure communism nor pure fiscal anarchy are formulas for success. In the case of free markets, we know for a mathematical fact those systems will refute themselves without government oversight.

It is an easily-verified historical fact that the size and scope of the American economy is as much the result of governmental actions as it is reliance on so-called 'natural' market forces.

The market economy depends on a strong government. (5, Insightful)

Per Abrahamsen (1397) | more than 11 years ago | (#4503208)

It is far more profitable to either kill or join with your competitors, than to compete with them by offering better products at lower prices. This is why a strong government is needed to ensure a working market, based a continues struggle to provide better goods at lower prices than your compatitors.

Without such a strong government, producents will join force in guilds, who keep the market closed to outsiders, by force if necessary. This was the situation until the development of nation states with a strong King as the leader.

Unfortunately, this violates the foundation for the Libertarian belief, namely that all evil is created by government and all good come from the market. And as always when belief and reality slashes, the believers are unable to see the reality.

Of course, this isn't an excuse for the government to take up other tasks than ensuring that players on the market follow the rules.

Re:Legitimate reason for bailout? (5, Informative)

JaredOfEuropa (526365) | more than 11 years ago | (#4503217)

"People like Friedman and Hayek have proved that markets are the ultimate source of truth, at least in this world."

I suggest you go re-read Friedman. First off, he did not prove that free markets are the best solution, he merely made a (very compelling) argument that it is so. Second, Friedman himself pointed out various examples where 'Market failure' can occur. One example he cites is about public works, for example people might be willing to pay a fee for using properly maintained sidewalks, yet it would be economically unfeasible for a private company to collect these tolls. So instead we all pay a small amount of tax and the government takes care of the sidewalk.

There are other factors that may may prompt a government intervention: in case of the telcos, the government may decide that having a phone line is a basic right, and that telcos are supposed to hook everyone up for a basic fee, with the easy hookups subsidising the ones in remote locations. If governments did not do this, then all the telco's would tell the few customers living in the sticks to get stuffed if they wanted a phone hookup.

I am not saying any of that is right or wrong, but there is nothing fundamental about letting the market economy run its course. It may be the most efficient, and there is a strong case for any government to think twice before interfering with the free market, but not even Friedman suggested to leave everything to the market.

Re:Legitimate reason for bailout? (0)

kaworu-sama (608217) | more than 11 years ago | (#4503014)

Well, no small company can reasonably do what a large telecom has built up to over all of these years. I think it would be nice if telecoms could still do their job that satisifies their "social dependency" but also open up ways for smaller companies. On the topic of whether we should bail them out... If the company totally screwed up, it should be their fault and they should have to pay whatever consequence follows. Companies may get used to this bailing out stuff and make sloppier and sloppier decisions, thinking they can just get free money from Uncle Sam.

Re:Legitimate reason for bailout? (2)

httpamphibio.us (579491) | more than 11 years ago | (#4503073)

But when their product is *needed* to function what do you do? Hypothetically, if energy companies did something drastically wrong and were all in peril of collapsing you'd want somebody to step in and prop them up, at least as long as it took to either get back to normal or for smaller companies to fill the gaps, right?

Re:Legitimate reason for bailout? (0)

Anonymous Coward | more than 11 years ago | (#4503470)

You have it backward.

Until smaller companies could come in to fill the gaps, these ailing companies could charge enough to pay for their mismanagement.

Thus, smaller companies have the opportunity to come in with better prices and/or services.

This is what a market economy does. The only time the energy companies were in peril of collapsing without smaller companies ready to replace them is if the government is interfering and artificially damaging them. This is what happened to CA last year.

Would letters from other people help? (3, Insightful)

slattont (609768) | more than 11 years ago | (#4502939)

Would comments concurring with the opinions in this letter help? If so what email address?

Well, yes and no... (5, Insightful)

irn_bru (209849) | more than 11 years ago | (#4502941)

Who is to say we would be where we are today if these companies hadn't invested in their now obsolete hardware at the time??? It's easy to critisie this now, but would the internet have expanded so rapidly without their investment.

Would future network investment be made less attractive id this was the case. Apparently, "Moores Law" makes any investment depreciate so rapidly that all progress is futile.

This so obviously is not the case.

Re:Well, yes and no... (-1, Flamebait)

tobo (307569) | more than 11 years ago | (#4502965)

Are your talking about the former leader of the WTO?

Okay, let's talk about politics. Let's talk about economics.

Give me one good really clear example why things like market economy, globalization, international trade of foreign direct investment wouldn't work.

Let's talk economics. I dare you!

Re:Well, yes and no... (2)

cp99 (559733) | more than 11 years ago | (#4503032)

Give me one good really clear example why things like market economy, globalization, international trade of foreign direct investment wouldn't work.

Indonesia.

By all means, prop them up. (4, Insightful)

Sheetrock (152993) | more than 11 years ago | (#4502981)

As you mention, a good deal of the current infrastructure was laid by these companies and is currently being enjoyed by a much larger segment that had little or nothing to do with it. However, if government is going to pump money into the telcos, it should probably be with the expectation that the infrastructure will be upgraded to make it possible for the continuing deployment of broadband technologies by the companies who are actually trying to expand their offerings to consumers.

Re:Well, yes and no... (5, Insightful)

JPelorat (5320) | more than 11 years ago | (#4503063)

So we should reward them with welfare? Retire them on full pension? Because they 'took a financial bullet for prosperity' or some such nonsense?

You realise we're talking about corporations? Businesses. Legal entities. Not humans. They're not war veterans. They deserve no special loyalty simply because they were first or paid 'too much' for their equipment. Do we celebrate and subsidize the construction companies who laid the first interstate highways? Well, maybe, but not for that reason.

The owners and employees who started the telcos and grew them and maintained them have already been amply rewarded - they were paid while they were doing it and they got to see the value of their stocks grow. If they want more money, they have plenty of other options besides being subsidized by the Federal Govt.

Re:Well, yes and no... (3, Insightful)

Zathrus (232140) | more than 11 years ago | (#4503421)

We should (perhaps) reward them because we're the ones who put them there.

I admit that I don't know the entire picture, but I know some of it, and the fact is that the government put the Baby Bells into this situation.

How? Well, up until 1996 the telecomm industry was heavily regulated by a mishmash of federal, state, and local laws, the local Public Service Commissions, and Judge Greene. It basically meant that any and all purchasing decisions had to be approved by the PSCs, who didn't understand technology and required the RBOC's to ammortize purchases over extremely long time periods - even when the RBOCs knew that it wasn't viable. The flip side to this is that the PSCs did, by and large, fulfill their obligation to the public by keeping costs down. Mostly.

I don't know that this is what caused the RBOCs to buy equipment with long term bonds, but if it was then damn right the government is on the hook. You can't tell someone they have to buy a long term contract, then ditch them when it doesn't work out. Or maybe you'd like to see that happen. Have a home mortgage at a low interest rate right now? Want the bank to ditch you when interest rates go back up? Didn't think so.

Do we celebrate and subsidize the construction companies who laid the first interstate highways?

Apples and oranges. The interstate highways are public throughfares. They are owned by the state governments. This is not true for the telecomm network - it's owned and operated by corporations. The government licensed them, gave them some right of ways, but did not pay in whole for the network as they did for the interstate highway system. If this had occurred then we'd pay our phone bills directly to the government - what fun that would be. We'd probably be employing the rest of the world to do operator based switching still.

I'm not arguing purely in favor of subsidizing them. What I am saying is that we don't have the full picture here. But, frankly, if you think letting the RBOCs go belly up would be a good thing then you really don't understand economics or how the telecomm system works.

Re:Well, yes and no... (2)

JPelorat (5320) | more than 11 years ago | (#4503640)

"I'm not arguing purely in favor of subsidizing them. What I am saying is that we don't have the full picture here. But, frankly, if you think letting the RBOCs go belly up would be a good thing then you really don't understand economics or how the telecomm system works."

You didn't understand my point. My point was not "The Baby Bells should go away", it was "They should not be subsidized out of a sense of reward or gratefulness." If they are the only thing keeping the infrastructure available, then yes, measures should be taken to keep them going, but not because they spent a lot of money and took risks in the early days.

Re:Well, yes and no... (2)

Zathrus (232140) | more than 11 years ago | (#4503689)

You missed my point as well - if the government forced them to take long term loans, then the government is responsible for the outcome of that decision.

I don't know that this is true though, but it should be checked before saying that the government isn't responsible.

Re:Well, yes and no... (0)

Anonymous Coward | more than 11 years ago | (#4503068)

As a customer of the telecos and a former stock owner of one failed teleco (Global Crossing), I don't feel like I owe them anything. Are you saying that we all somehow owe them for the irrational internet buildout that ocurred in the late 1990's? Are you saying that we all somehow owe them for the extremely dubious accounting standards that were being used so that they could artificially pump up their stocks (and therefore acquire loans that they now can not afford to pay)? This is like saying that the public at large "owes" the organizers of a pyramid scheme. The companies that are hurting took advantage of admittedly bad laws (i.e., the so-called deregulation of the early 1990s), but I'd say that they owe the public more than vice versa.

Re:Well, yes and no... (1)

jolshefsky (560014) | more than 11 years ago | (#4503200)

Who is to say we would be where we are today if these companies hadn't invested in their now obsolete hardware at the time??? It's easy to critisie this now, but would the internet have expanded so rapidly without their investment.

That's not exactly the point--more that it is a mistake to support those practices now. Until recently, there was no way to replace the phone system and infrastructure with anything--it was just too big--but now there is. Instead of allowing phone companies to invest in expanding obsolete technologies, "encourage" them to invest in new technology that is more expandable, reliable and cheaper.

As for Moore's Law making technology obsolete too fast, that's just not the case. Networks containing a mix of old and new equipment simply needs to be designed to support regulated obsolescense. It would be silly to throw away the whole phone system every two years because processors are faster. It is equally silly to attempt to maintain compatibility with 50 year-old equipment which could be replaced by a system better in all aspects--and probably with a power savings alone that it pays for itself in the first year. The whole trick is planning ahead intelligently [ha ha.]

Re:Well, yes and no... (0)

Anonymous Coward | more than 11 years ago | (#4503277)

This gets moderated as a "5," even though it's obvious the poster didn't read the letter?

The letter criticized telcos for investing in obsolete hardware and technologies, not the fast-growing technologies that are becoming widely-used standards today. Is it smart to pour money into POTS systems on the verge of a VoIP breakout? What exactly IS the fair amount of government charity a business should receive for its stupidity?

My vote is solidly on $0 with these guys. Read the article next time.

Signed by Tech Industry Pioneers????? (2, Interesting)

gricholson75 (563000) | more than 11 years ago | (#4502960)

I haven't heard of most of these poeple, are they really tech industry pioneers. I mean really, check out this guy. [unitboy.com] The FCC isn't going to listen to anyone who isn't a big campaign contributor, these guys mostly are not, the big telecoms are, I'm predicting a telecom win here.

No bailouts (5, Insightful)

Quixote (154172) | more than 11 years ago | (#4502962)

The Congress set a bad example by bailing out the airline industry post 9/11. Even after 2 bailouts, they want more. The only airline (Southwest) that didn't ask for the bailout has been doing just fine, making a profit. The market cap of Southwest is more than that of all of the other airlines combined (I know, marketcap is just an indicator).

Companies with failed business models should be allowed to fail: that is The American Way. This economy depends on the fact that failing companies die, and in their place better/faster companies are born. Just like any other healthy ecosystem, we need a certain amount of "churning" to keep things moving. Stagnation is bad, and will only lead to long-term problems.

Re:No bailouts (0)

Anonymous Coward | more than 11 years ago | (#4503574)

Yea! Was hoping someone would say this.

However, I was reading casually that the mayor of Chicago wants to improve some of the airport runways in the Chicago area to the tune of $6B. I believe by adding one new runway (to relieve congestion) and renovating three more. Involved airlines have claimed they don't have the money to carry out such a plan. A govt bailout, by coincidence, would provide a lot of money. Note that UAL is traditionally the largest carrier at O'Hare.

I'll let the reader draw any inferences.

Can we add to the letter? (3, Interesting)

E-Rock-23 (470500) | more than 11 years ago | (#4502964)

I'd be for adding the following things to this particular letter:

1. Reverse Deregulation. Ever since deregulation occoured, our bills (phone, cable, et al) have doubled, and in some cases tripled.

2. Bring webcasting down to a tolerable level. The fees webcasters have to pay are just insane. How about listening to the people instead of just these big businesses who want to squash the small-time communications industry? It does fall under communications, after all...

3. Lay the smack down on the RIAA and MPAA. Please refer to #2. Originally, the two were created to oversee standards. Now they want to limit fair use and basically rule the industry? That's what happens when too much power is allowed to run rampant.

4. Free the Internet, or at least bring it down to a cost-effective level. We're paying entirely too much for something that could help advance all people. Why should the less-fortunate not be able to afford access?

5. This one's personal. Make MTV change it's name. It's not music television anymore, so why not change it to C(rap)TV. And for those who care, I'm not knocking rap. Just the crap (Real World, Road Rules, Jackass especially) that they put on that god forsaken channel...

Yeah, I'm asking alot of an inept Federal juggernaught. But hey, why not at least try, right?

Re:Can we add to the letter? (0)

Tuzy2k (523973) | more than 11 years ago | (#4503007)

Hells yes! Amen brutha!

Re:Can we add to the letter? (3, Insightful)

mcwop (31034) | more than 11 years ago | (#4503176)

On point #1 what is your evidence? Is this a general observation? Are you including all tha taxes on basic phone service? Do you include the fact that you now have a choice in phone services. I pay $30 a month for cell (same as land line) and that covers all my local and long distance charges in that $30. That is much better than my bills were with only a land line and long distance service. The best part is that weekends are free. I believe that you are wrong on point #1. Don't even get me started on the larger range of services we have to choose from as well since de-reg (voice mail, caller id etc..)

Re:Can we add to the letter? (2, Insightful)

Paul 03244 (220512) | more than 11 years ago | (#4503431)

You sound like your heart is in the right place, but I think you are missing the point. A truely free market has_market_mechanisims that work against the concentration of money & power by encouraging competition, not by regulation_that_picks_winners_and_losers.

1. Reverse Deregulation. Ever since deregulation occoured, our bills (phone, cable, et al) have doubled, and in some cases tripled.

Yes, but consumers have recieved increased value in a number of ways: 1)The price long distance has come down dramtically. 2)It's hard to argue that the cost of cellphone service is being entirely born by cell phone service users. 3)A lot of phone and cable companies have used increased revenues to establish Internet services.

2. Bring webcasting down to a tolerable level. The fees webcasters have to pay are just insane. How about listening to the people instead of just these big businesses who want to squash the small-time communications industry? It does fall under communications, after all...

You are right, but the solution is market_mechanisims_pricing_copyrighted_material. (See my coment below) Also, communities that grant local monopolies to cable companies should insist that monopoly holders provide public access channels and studio equipment to encourage production of independant/local content to compete with content controled by the RIAA & MPAA.

Lay the smack down on the RIAA and MPAA. Please refer to #2. Originally, the two were created to oversee standards. Now they want to limit fair use and basically rule the industry? That's what happens when too much power is allowed to run rampant.

Pray that the Supremes see the light on Eldred vs
Ashcroft, and send the case back to the lower court with instructions to phase out copyright extensions that have been granted since 1790. Ditto for patent term lengths. In this day of rapid technological change, 50 years seems to long for patent protection.

Free the Internet, or at least bring it down to a cost-effective level. We're paying entirely too much for something that could help advance all people. Why should the less-fortunate not be able to afford access?

I assume you mean deregulate the internet. There is no way to force suppliers to provide goods and services below cost; at least not in the long run. Regulation (with or without subsidies)eventually means higher prices, poorer quality, & reduced supply.

This one's personal. Make MTV change it's name. It's not music television anymore, so why not change it to C(rap)TV. And for those who care, I'm not knocking rap. Just the crap (Real World, Road Rules, Jackass especially) that they put on that god forsaken channel...

does seem personal ;)

'Little' people would suffer the most (4, Interesting)

scrod98 (609124) | more than 11 years ago | (#4502969)

The companies that go under may be the one's currently providing the 'last mile': services for millions of americans. You cannot abandon the current ability to provide reliable communication service at a reasonable price to many rural and even suburban areas. Many of these people cannot afford cell phones (if available) or obtain any other alternative to land-line. I'm sure it is not cost-effective to solely serve them, while allowing major custoemrs to go elsewhere.

This is where the government bailout would help, by allowing access to areas that would be under-served, and allow time for solutions to that problem.

Jeez, pretty hefty rant this early on a Tuesday. Must be fear of sniper-related traffic in DC.

Re:'Little' people would suffer the most (5, Insightful)

albanac (214852) | more than 11 years ago | (#4503042)

The companies that go under may be the one's currently providing the 'last mile': services for millions of americans.

Note that the companies will go under. No-one will go around digging up the fibre and copper which are already under ground. Companies that fail will have their assets bought by someone who is not failing. Control of the last-mile will move. The companies are trying to avoid corporate failure. The reason there is an argument, at a philosophical level, is not that some companies will die, but that control of the last-mile will move to companies which have a different paradigm entirely. That is what the corporates are trying to make the government fear, not the actual economics of bankruptcy for certain specific players.

~cHris

Re:'Little' people would suffer the most (1)

Marulq (619273) | more than 11 years ago | (#4503432)

Is it not simpler for the government to subsidise access in those remote areas, so they become competitive as well?

mp? (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#4502971)

more posts....?

Moore's Law & Metcalfe's Law defined (5, Informative)

slashd'oh (234025) | more than 11 years ago | (#4502973)

  • Moore's Law: "The observation made in 1965 by Gordon Moore, co-founder of Intel, that the number of transistors per square inch on integrated circuits had doubled every year since the integrated circuit was invented. Moore predicted that this trend would continue for the foreseeable future. In subsequent years, the pace slowed down a bit, but data density has doubled approximately every 18 months, and this is the current definition of Moore's Law, which Moore himself has blessed. Most experts, including Moore himself, expect Moore's Law to hold for at least another two decades." (read source [webopedia.com] )

  • Metcalfe's Law: "A theory argued by Robert Metcalfe, inventor of Ethernet, which states that the power of a network increases by the square of the number of nodes connected to it. For example, where X is the number of nodes, the power of the network is X squared. Metcalfe observed that new technologies are valuable only when large numbers of people use them -- consider how less valuable the telephone would be if only two people in the world used them. The network becomes more valuable the more nodes that are connected to it." (source [webopedia.com] )

Re:Moore's Law & Metcalfe's Law defined (0)

Anonymous Coward | more than 11 years ago | (#4503326)

Too bad no one seems to really know what Moore's law is. Slashdot approximations of Moore's law include:

Every 18 months [computer component]s get cheaper
Every 18 months [computer component]s get faster
Every 18 months computers get bigger
Every 5 days Timothy posts a story he already posted

Economics (5, Interesting)

Bocaj (84920) | more than 11 years ago | (#4502997)

IANAE, but what happens when major telcos start to go under? As they struggle to maintain profit margins, how despirate will they get? Can replacement technologies and companies absorb the workforce that will be laid off? How often will this type of thing happen? Think about it, the current plain old telephone system is no good unless it is ubiquitous. That's why the telcos are in trouble. They needed to put entire systems in place before they where useful. Fiber is fantastic except when it comes down to two little wires in the last mile. In for a penny, in for a pound. Telecommunications systems need to be complete or not at all. How do we get the technoloy in place before it's obsolete?

Short Term Impact (5, Interesting)

skroz (7870) | more than 11 years ago | (#4502999)

It seems to me that the long term goal of replacing outdated infrastructure and ancient business models may be reached sooner by this "fail fast" proposal, but the chaos produced would be devastating to customers. Service outages, price fluctuations, and provider changes could cripple customers large and small. The industry that might come out of such a proposal may be worse off for the experience.

Typical corporate behaviour... (1, Insightful)

Anonymous Coward | more than 11 years ago | (#4503008)

Capitalism one day, Socialism the next, whatever keeps the dollars rolling in, that's what they'll ask for.

Re:Typical corporate behaviour... (0)

Tuzy2k (523973) | more than 11 years ago | (#4503016)

Hells yes! Straight from the annuals of Adam Smith and John Locke :)

Think about it (0)

Anonymous Coward | more than 11 years ago | (#4503024)

How many of us have stakes in these "fail fast" companies via pension funds?

This 'Open' letter (3, Interesting)

Anonymous Coward | more than 11 years ago | (#4503039)

Seems like a self-serving whine by people with a vested interest in the 'failure' of older technology. No matter how carefully worded, I smell money in someone's pockets.

We need to remember that the internet was designed to be able to communicate with defense authorities during times of national strife, as in nuclear war. It shines because it is nearly impossible to kill all the telco communications capabilities at once. Old, yet trusty technology. Just look what YOU are doing with this technology today!

Where are the Internet pioneers (3, Insightful)

Florian Weimer (88405) | more than 11 years ago | (#4503043)

signed by internet [...] pioneers

Who are they? Is it reasonable to call someone an "Internet pioneer" even if he or she hasn't (co-)authored an RFC carrying a three-digit number?

Re:Where are the Internet pioneers (0, Flamebait)

JaredOfEuropa (526365) | more than 11 years ago | (#4503254)

Who? Al Gore of course, after all he invented the damn thing!

Bailout (5, Interesting)

Omkar (618823) | more than 11 years ago | (#4503047)

The recent spate of government bailouts (airline, steel, etc.) reminds me of the S&L scandal in the 80's. I believe Japan had a similar problem as well. Instead of letting some 'creative destruction' take place, as our govt. did, the Japanese bailed the incompetent banks out.

Result: their economy has been stagnant for a decade.

Let's hope the govt. has learned from their mistakes.

Traditional telcos aren't going bust (5, Interesting)

Cato (8296) | more than 11 years ago | (#4503062)

If you look at all the telcos of various types, it is the incumbents (RBOCs, Baby Bells, ILECs, PTTs...) who are surviving quite well and even prospering. They didn't get sucked into the IP-based boom/bust as much as others, and more importantly their legacy phone switches make significant money through well-established per-minute billing. Wireless operators who charge per-minute are also doing OK, although 3G will probably kill some of them off.

It's precisely the next-gen telcos (CLECs, ISPs, xSPs) who invested in the new IP technology that ran into the boom/bust and are struggling or going bust. WorldCom is something of a special case - it had a lot of legacy technology that should have tided it over, but the accounting shenanigans were too much to survive.

This doesn't mean that IP-based networks are a passing fad, though - all that's happened is that the pioneers have gone through the normal bleeding-edge live/die cycle. Some of them have made it, some have gone bust, and all the old-line telcos have adopted the same technologies.

I agree that failing telcos should normally not be propped up - as long as someone can step in to maintain services by buying up their assets, particularly local loops that are hard to recreate, the customer shouldn't notice that much interruption. My problem is with the analysis that the legacy technology is why telcos are going bust.

Security of Internet-based phone system (5, Insightful)

MichaelCrawford (610140) | more than 11 years ago | (#4503082)

There's a concern I have that I think I first read in one of Bruce Schneier's crypto-gram newsletters. Ah, here it is:

The problem is that if the telephone system becomes based on the Internet, there will be catastrophic security breaches in our telephone system.

This is because every node on the internet can have packets directed at it by any other node. That's the whole point of end-to-end. But that means any joker with a PC can log in to his ISP and start up h4x0r scr1pt5 to start cracking phone switches.

With the current phone system, control signaling is out of band - end users can only control the phones at each end of the connection, and cannot control the functioning of the switches in between. You can command the switches by dialing a number, but you can only route your call this way, not control the basic functioning of the switch.

To a large extent security can be maintained by keeping the telco equipment in securely locked buildings.

But the protocols used for the phone system apparently aren't designed with security in mind, so that when they are adapted to the Internet, they become gaping security holes.

Potentially someone could do some clever work and bring down a whole nation's phone system, if it were on the Internet.

The convergence of the telephone system and the Internet has already been going on for a while. It is quite common for long-distance calls to be routed over the Internet, so you get phone-to-phone VOIP without the user being aware of it.

It is also common for telcos to be ISPs, and they just use the same fiber for voice and data. It's more economical to use the same data formats and protocols for voice as well as data, so they transmit all the voice calls with the Internet Protocol.

Re:Security of Internet-based phone system (1)

LemonYellow (244336) | more than 11 years ago | (#4503182)

IIRC, this was done some time ago with the current telephone network. Something to do with convincing one exchange that it had a fault, and that took down all of the surrounding exchanges.

Re:Security of Internet-based phone system (0)

Anonymous Coward | more than 11 years ago | (#4503198)

any idiot engineer that puts a critical system onto a publically accessable network (internet) needs to be ran over with a truck several times...

only the absolute stupidest engineer or person would do that.

it doesn't need to be on the internet, and only a complete moron would give it access from the internet.

dial up modems and privatenet are 100% fine for any of these critical systems... and anyone saying otherwise is a complete and utter moron.

Re:Security of Internet-based phone system (3, Interesting)

Lumpy (12016) | more than 11 years ago | (#4503236)

Actually you are right..

Dial up modems can have a huge amount of security (dial back and wierd tones pairs come to mind.. hey we use both here!) I can make a dial up system that will keep out any cracker that has even good skills. and this isn't even the computer asking for the password... they cant even get past the modem it's self unless they social engineer enough information to hijack the phone numbers the modem automatically dials-back to. (Only 3 of them.) and then the cracker needs to modify his modem to use a different set of signalling tones.. either by hardware hacking or by social engineering me directly.

or the cracker can tap our private t1's and fiber connections to try and break in...

but only an idiot would put a critical or important system on the internet.... the worries in the parent post are unfounded unless the telcos are staffed with idiots for engineers.

Re:Security of Internet-based phone system (0)

MichaelCrawford (610140) | more than 11 years ago | (#4503412)

Um, my understanding is that they're already putting critical systems on the Internet. It's a done deal. However, it is not as widespread as it would probably become if the older businesses are allowed to fail.

Let the Baby Bells compete (4, Interesting)

anonymousman77 (584651) | more than 11 years ago | (#4503085)

Why are the Bells forced to lease out their DSL connectivity to other companies at below cost? Does this really spur investment? The reason that most people do not have access to DSL is that the Bells will NOT invest until they are allowed to compete against cable companies DIRECTLY

Do cable companies have to let the telcos use their cable at below cost?

What will happen to the parasites (CLECs) when the hosts (Bells) die?

Deregulate the Bells and let true competition take hold. You will not regret it, Mr. Powell

Re:Let the Baby Bells compete (3, Insightful)

Zathrus (232140) | more than 11 years ago | (#4503488)

To clarify what anonymousman77 said - the RBOCs are currently required to lease out DSL coloc's for the amount it costs them to deliver service.

Which sounds all fine and good, except that they're not allowed to charge for infrastructure costs. How much did it cost to upgrade the CO to DSL? To restructure wiring? To perform service upgrades? Doesn't matter, can't charge for it.

The flip side to this is that traditionally the RBOCs have used exactly these costs (and generally inflated them) to prevent competition. To put it bluntly - they fucked other companies for a decade and now they're being punished for it.

Of course, this doesn't help anyone who can't get DSL because it doesn't make economic sense for the RBOC to upgrade. Or the various telecomm supply companies who have seen their contracts evaporate because the RBOCs aren't willing to invest in infrastructure at this point.

this is not the problem... (0)

Anonymous Coward | more than 11 years ago | (#4503170)

In the USA, if you start a business and it fails you are allowed to raid it's funds to shore up your own pockets... I.E. the rich man that tried to pull a fast one get's richer while the small investors and employees get shafted. the laws need to be changed that when a business fails the executives personal finances are to be seized, audited, and if any hint of wrongdoing raided completely and distributed to the shareholders, employees and finally creditors... EVERY PENNY AND PHYSICAL ITEM IS TO BE TAKEN AND LEAVE THE CEO'S PENNYLESS.

this just might keep the scumbags from starting a business with plans to fail from the start (Loki for example.. that scumbag robbed lots of people, including his awesome employees... they need to take everyth he owns and give it to the employees and shareholders.)

and if the CEO is blameless? (0)

Anonymous Coward | more than 11 years ago | (#4503415)

What if it gets proven that the CEO was actually blameless and the fraud came from somewhere else? You already have the guy in prision before we even know the nature of the problem.

Do you believe in 'innocent until proven guilty'? Or are you like the Stalinists: arrest whoever and then kill them just because you don't like them?

Not all CEO's are evil money-mongers. The rich have a hard time to get to Heaven (eye of the needle) but that doesn't say that they can't.

It is wrong to think that all rich are bad and all poor are good. We are all BOTH.

Your plan of confiscation sounds good. I am glad that you are worrying about the obvious problem of the seemingly total corruption in our equity markets. However if you want to kill them all (metaphorically) then we won't have anyone that wants to lead.

A return to morals based business practices would be a better tact for improving the honesty on Wall Street. They should stop reading Ayn Rand and her ilk (where anything goes as long as you are happy) and start reading books like THE BIBLE, THE KORAN, THE TALMUD, THE ICHING.

Don't kill the sinner or you will kill everyone.
They can be redeemed, but not if they feel backed into a corner and hunted by envious left-wing rabble rousers.

Peace not pieces.

Telecoms provide a needed service (3, Informative)

taleman (147513) | more than 11 years ago | (#4503174)

Telecom companies provide a needed service, a phone is considered a necessary household item, and an Internet connection is becoming that.

Now, in many countries a telco has been forced to provide it's services to all parts of the country, even in sparsely populated areas, to get the telecom license. Now it is possible, with the new technologies, for startup telco replacements to start offering their services in big cities. By offering data connections and VoIP there, they can get all the traditional telco customers to switch to the new services. This may of cource take time, since big companies may have made investments in their own infrastructure and are unwilling to do a forklift upgrade.

But this leads to telecom companies going bankrupt and sparsely populated areas losing all service. A telco can easily make a profit in densely populated areas, but may run to red where there is only one customer every few kilometers.

Pumping money to failing companies is just rewarding badly run businesses, since there was no law that prevented incumbent telecoms from offering these same new technologies to their customers. They would even have been in a better position to do it, since they already had the customer base.

Sooner or later it becomes a problem when something that people need in their normal everyday life is run by market forces. Banks and railroads are good (or bad?) examples.

In fact the situation is even worse. (3, Insightful)

ahfoo (223186) | more than 11 years ago | (#4503204)

It's not just that they got caught buying the wrong equipment, the big telecoms players have specficially resisted IP over ethernet in order to keep entry costs as high as possible. The most ridiculous thing in the world is these suggestions that they had to stick with ATM and Sonet in order to cash in on the huge potential of video conferencing and video on demand and all this utter crap that only seventy year old technophobe shareholders would believe.
Compare an OC3 from a Bell -vs- an OC3 from a native ethernet provider like Cogent. These are two different worlds of cost.
But hey, let the FCC do what they will, we'll just add it to the list of criminal frauds already commited when it's time to impeach and imprison Bush and his administration.

impeach and imprison your attitude (0, Flamebait)

Anonymous Coward | more than 11 years ago | (#4503334)

Is it always about politics? What did W do now? I don't like his policies, and money monger oil people in general. But what did W do to be impeached and imprisoned?

Look at yourself. You envy the fact that he is in power, don't you? Impeach your envy, imprison your partisan attitude. We need to worry about being able to make phone calls. It isn't all a big conspiracy of the rich against the poor. It is about reliable local and long distance phone. If we let the phone companies all go out of business, how will you beable to post your hateful screes?

Re:impeach and imprison your attitude (1, Flamebait)

ahfoo (223186) | more than 11 years ago | (#4503499)

Wireless my dear AC bitch, wireless. The "phone companies" would be irrelevant if wireless would take off and guess who is trying to prevent that from happening. Yeah, that's right big Dubya.
And as for what he did to be impeached and imprisoned, don't you read the news? The Enron kids are confessing that the "California Energy Crisis" was all a big hoax perpretrated not just by Enron but by a whole consortium of Energy traders based in Houston with ties to both Bush and Cheney. I don't make the news, I just read it. That's stealing and possibly murder. People lost their lives because of those outages.
And on a personal note, I can't stand to use the damn telephone. I leave mine unplugged most of the time.

Re:impeach and imprison your attitude (0)

Anonymous Coward | more than 11 years ago | (#4503525)

We need to worry about being able to make phone calls. It isn't all a big conspiracy of the rich against the poor.

Bravo!! Spoken like a true dependent! There's a good sheep.

Jr.:"Mommy, how come daddy hasn't raised my allowance?"

Mommy: "Jr. You'll understand someday, daddy has to save money to send you to harvard to buy you a position in the new national socialist party."

Jr.: "I don't get it?"

Mommy: "You wont have to sweety, don't worry. Now eat your kipper treats, and I'll fix you a hot bath"

Jr.: "Yah!! OK"

The problem.... (2)

AtariDatacenter (31657) | more than 11 years ago | (#4503234)

is that the technology changes TOO FAST. Normal depreciation cycles just don't work well for the way things have been changing. Assets go to zero worth in a very short amount of time. This means a constant investment cycle is needed.

This doesn't mean that you should have one group of companies, and then start to die off as you have the next group of companies invest in the next wave of technology. Later, rinse, repeat.

Of course, this doesn't mean that they don't have things to fix. They most certainly do!

Re:The problem.... (1)

AtariDatacenter (31657) | more than 11 years ago | (#4503275)

This is what I get for typing a response while I'm on the phone with Veritas' technical support in UK. Their bogon emmissions must have worked itself all the way into my fingers. (sigh)

exisiting infrastructure! (1, Interesting)

Anonymous Coward | more than 11 years ago | (#4503284)

The falacy that 'faster and cheeper' is better is what got us into the telecom disaster in the first place. If a new type of sewer pipe is devised, do we dig up every old sewer and replace it with the new? The old one still works fine (unless it is leaking).

Faster faster faster. The trend mongers in the telecom industry kept making bigger and bigger pipes. But they can't combine and break up the packets correctly. Thus they can pass one million gig of data, but they can't pass and deliver a million separate gigs to and from different places.

That is the scam. They kept saying faster cheeper. But they couldn't say better.

As an analogy: You don't need a ten inch pipe into your shower. You don't need a fire hose on your water cooler. You don't need a 1/2 inch pipe into your refridgerator.

It is too bad that the people who dole out the venture money don't actually know anything about technology (ok, they must know something).

If something works, you don't replace it. We don't need 1 gig into our house. We do need reliable phone and reliable power.
I don't need streaming video. If I want to watch a movie I will rent a tape or go to the cinema.

Exisiting infrastructure has the advantage of already being there.

I have to wonder... (4, Insightful)

AtariDatacenter (31657) | more than 11 years ago | (#4503293)

...if some of the (hidden) corporate interest behind this goes something along the lines of:

"Please, please, don't bail out Worldcom! We all want to grab a piece of that 50% Internet backbone share for ourselves! Don't bail them out!" ?

It's Called Retirement Through Attrition (5, Insightful)

Timinithis (14891) | more than 11 years ago | (#4503355)

Following the Sailing to Steam Power analogy:

Government's do not scrap entire fleets when a new technology improves over what is in existance, they strat building new ships and as the older, obsolete ships either sink, are lost in battle, or are too old to maintain they are replaced.

There is some old technology out there, and anyone seeking a bailout on that should be denied. Airlines should be denied bailouts, unless the money is used to go toward improved tech. The $100,000 switch of yesteryear can be replaced with a more relaible $25,000 switch that can handle more traffic, then that is what the money should go for -- improvements.

If their business model is failing, many airlines are in this boat only because of the lessed travel, then they need to adjust..close hubs, discontinue routes, etc. Yes, it would suck for the people that are affected, but what is to stop them from forming a local company to fill the void? It may be too expensive to run a daily flight from Los Angeles to San Francisco for a major airline using a big jet, because there are only 30 people wanting to go each day on average, but a smaller company with a 10 passenger leer could make 3 trips a day, and probably be very profitable.

Government should seek to involve itself in National Defense and Policies, and Proteciton of the Populace -- everything else should be a local matter.

Free markets (4, Interesting)

evenparity (569837) | more than 11 years ago | (#4503515)

It is funny how many engineers and scientists tend to be libertarian, free-market types. There is this tendency to have supreme faith in the existence of "natural laws."

But economics, psychologists and other liberal arts types realize that human beings defy "nature" all the time. People who study economics essentially study the cases where economics don't work! Psychologists study why people are not rational/utility maximizers.

As far as the broadband/telecom connection goes, did anyone else read this [businessweek.com] article in Business Week?

It talks about how broadband providers are keeping prices artificially high because they would rather deal with slower adoption rates at higher margins than faster adoption at lower margins because THEY KNOW EVERYONE WILL ADOPT BROADBAND EVENTUALLY and they can force us to pay more. Cable broadband profit margins are about 50 percent now.

Makes you realize how much companies like Comcast can prevent high-speed adoption and screw over the telecoms in the process.

(I canceled my Comcast modem and television service last week. Originally, I just wanted to get rid of the television service, but they told me that if I did, they were going to jack up my cable modem price by $15. I told them to cancel everything.)

A matter of national security (2, Interesting)

Digital Soldier (87211) | more than 11 years ago | (#4503669)

For a number of years now, there has been a large effort to take the ownership and management of a lot of the telecom (data comm) infrastructure out of the hands of the federal government. Outsourcing. Unfortunately, because the ability to communicate over this infrastructure has become so important to national security, the federal gov must make sure it remains functioning. Look at some of the postings from a couple of days ago relating to the Navy-Marine Corps Intranet (NMCI). That project relies exclusively on the financial health of EDS, the prime contractor. These "Internet Pioneers" should remember that the federal government IS the internet pioneer and that the only reason most of them have a job to begin with is the fact that Uncle Sam was kind enough to give up most of the direct control of the infrastructure that the internet is based on. Wheew! Glad I got that off my chest....

How Corruption Works (5, Interesting)

Featureless (599963) | more than 11 years ago | (#4503670)

You have people running big bussiness and people in the federal government. They're all friends. They went to Yale and Harvard and Princeton together... they drank at the same clubs. Their parents were friends, and their kids are going to Taft and Dalton and Exeter together right now.

Their goal? Simple. Take tax money out of the government, and get it into their pockets.

Back in the Reagan days, their favorite was the defense industry. It was perfect; there's relative secrecy associated with defense approrpriations, and the military bureaucracy is so intense that it took quite a while for the few people looking to find those $10,000 toilet seats.

We also saw a lot of "foreign aid" disappear into the ether, split up between the corrupt foreign officials and the corrupt local ones, all of it more or less going to Switzerland and Grand Cayman. Still do, actually.

More recently it's been Enron ("privatizing" electric utilities was already absurd, and anyone who followed it the time - including me - called it a blatant invitation to fraud; who knew they'd go all the way to turning off the lights to convince people of a fake shortage! Gives you an idea how little these people fear getting caught), the "airline bailout," the "farm subsidy," and of course, don't forget the "tax breaks."

Now it's a "telecom bailout."

All of these scams netted their perpetrators billions, and in some cases tens or even hundreds of billions. Almost none of the people involved have been investigated, let alone caught. It's the new American mafia, ladies and gentlemen.

Michael Powell is a notoriously corrupt FCC chairman; he's blatantly carried water for both the cable and bell monopolists, and under his watch telecom (and especially internet) service has been abyssmal (remember Northpoint? and what happened to the CLECs?) while prices have risen. It was easy for him, a smug "regulator" in a plum job snagged with handy nepotism; all he had to do was stand back and wink while the bells slaughtered their competition. You don't get a job like FCC chair under a Bush administration without knowing how the game is played... Anyway, this goofy letter to him is pretty amusing; you may as well write a letter to Satan.

Until heads start rolling in quantity (and believe me, once we started, by the time it's over we'd need to build a new federal prison), it's open season.

However, sail boats are the wave of the future (0)

Anonymous Coward | more than 11 years ago | (#4503673)

When we run out of dinosaur fuels.
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