North American Network Operators Group

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Re: What do we mean when we say "competition?"

  • From: Sean Donelan
  • Date: Tue Nov 15 23:25:53 2005

On Tue, 15 Nov 2005, Owen DeLong wrote:
> I think what is really represented there is that because
> they own an existing network that was built with public
> subsidy and future entrants have no such access to public
> subsidy to build their own network,

Some people may think "public subsidy" implies using taxpayer funds such
as giving incentivies to companies to build factories, job training
programs, re-locate corporate headquarters or even build sports

Are you refering to the exclusive franchises granted to various cable and
telephone companies in parts of the country as the "subsidy?"  Or are you
refering the the High Cost Support funds which used to be implicit
internal transfers in the old Bell System (not taxpayer funds), or now
explicit transfers through the Universial Service Fund? Or are you
referring to the US Department of Agriculture Rural Utilities Service
financing which assists non-RBOC rural telephone and utility companies?

Competitors have been given access to the legacy telephone copper plant
(but generally not the cable coaxial plant) in most of the country. The
legacy copper outside plant is quickly being replaced by post-1996 outside
plant.  Soon there may be little or no pre-1996 outside copper plant
left.  Ownership of inside wiring was transfered to the property owner
a couple of decades ago.

Several municipalities in the US have spent taxpayer funds, or taxpayer
backed, to build a municiple outside plants.

What's interesting is there is relatively little competitive activity or
demand for access in locations (i.e. rural) with the largest government
incentives,  while there is a lot of demand in areas (i.e. urban) which
had minimimal or no government incentives and were funded by shareholders
and other investors.  The RBOCs and MSOs have been selling off their rural
assets to other companies for any years.

So what is it exactly you think taxpayer funds paid for and should now