Member Avatar for Danny

It looks like internet access prices will remain steady, and could even rise, in the near future. The ruled in favor of corporate America today, saying that phone companies no longer need to share high speed data lines with independent internet service providers at discounted rates.

The decision was immediately hailed by lobbyists and corporate telecommunications companies, such as Verizon, and SBC Communications. It’s not surprising they’re ecstatic – the decision was a huge score for them and their team of lobbyists.

In a nutshell, phone companies who own the large telecommunication networks in the United States don’t have to offer discounts to anybody for access. Simply put, they can “kick out anybody they want from the networks by dramatically raising their prices.

Why would they do this? Because phone companies have their own internet access services. ‘Why allow competition, when you can monopolize the market yourself?’ It’s an interesting thought, that’s for sure.

Our friends at the FCC are not completely to blame. In June, the almighty Supreme Court of the United States ruled that Cable Companies do not have to ‘open up’ to independent internet providers, setting a precedent for the FCC decision.

Nothing dramatic will happen for at least a year, as the FCC ruling requires phone companies to provide one year notice before hiking network access rates.

It should be fun to see what happens with this one. I highly doubt phone companies will be ‘earthy’ and continue to offer network access at discounted rates. After all, why would they? There’s no incentive that comes with supplying competitors.

“Don’t let the door hit you in the ass, internet wholesalers are being told.

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A concise factual context and what it meant legally: the Supreme Court decision in National Cable & Telecommunications Assn. v. Brand X (decided June 27, 2005) affirmed that cable modem service could be treated as an “information service” rather than a Title II “telecommunications service.” In the wake of that ruling the FCC adopted a wireline broadband order in August 2005 (often cited as FCC 05-150) that treated DSL the same way, removing the long-standing mandatory unbundling/line‑sharing requirement and providing roughly a one‑year transition for existing wholesale arrangements. Brand X decision. (law.cornell.edu)

What that classification actually changes: Title II common‑carrier status imposes nondiscrimination and unbundling obligations; an “information service” classification removes those automatic obligations and lets incumbents negotiate commercial terms (or decline access). Consumer groups warned this could shrink retail choices and push smaller ISPs out of the market; regulators tried to smooth the change with a short grandfather period and a separate, nonbinding FCC policy statement on openness. Wired summary of the FCC action. (wired.com)

Putting this into the thread responses: ’s worry about reduced consumer choice was grounded in law and structure — DSL and cable were the mass‑market pipes then, so removing regulated access did raise real risks. is correct that satellite and wireless existed as alternatives, but in 2005 they were less affordable and had capacity/latency limits for many households. The FCC did issue four “openness” principles, but they were policy guidance rather than enforceable rules at that time. CRS discussion of the policy statement and context. (everycrsreport.com)

Practical takeaways for readers years later: this was a pivotal, but not final, regulatory turn — market structure and rules kept evolving. For consumers and small ISPs the durable options were (1) watch service agreements and pricing, (2) seek wholesale/commercial deals where available, (3) consider municipal or wireless alternatives if feasible, and (4) follow state‑level telecom rules and later federal actions that might restore or change obligations. Historical context matters: the 2005 actions set the scene, but did not permanently freeze broadband policy. (wired.com)

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Member Avatar for jwenting

Welcome to free competition at last.

You always want free markets, now you have them.

Member Avatar for Danny

Actually I see this as the opposite. More like, "Goodbye" competition. Phone companies no longer need to share one of the most important means of communication. If you don't want Internet from your Cable company, and you don't want Internet from your phone company, you don't get Internet.

This is by any means a major blow to consumer choice.

Member Avatar for jwenting

not at all.
Maybe initially it may work that way, but there are now alternatives like satellite and other wireless options.
At the moment those are more expensive to implement for a provider than renting a phoneline below market value from an infrastructure provider, with the price restrictions removed that will change.

Of course if phone companies start to behave in monopolistic fashion they'll have to face the laws against that, as did Bell in the past when they behaved in such a way as to prevent any competition and drive up prices.

Member Avatar for Danny

I disagree. Phone companies in the past faced anti-trust breakups because they monopolized the ONLY phone network. So if you wanted phone service, you had to go with ONE company.

This does not apply to Internet, because as you mentioned, there are many alternatives. But whats the kicker? DSL and Cable are currently the cheapest ways to get online. Satellite and other forms of connectivity are more expensive and less reliable that grounded communications.

So instead of, say, 10 companies to choose from currently, most consumers may only have 2 in the future.

Member Avatar for Toulinwoek

I don't know that it's possible for mankind in general to ever come up with a perfect solution to anything. This is just another example.
We want free markets, and, well, this is one of the pitfalls of a free market. We want more "choice" for consumers but does that mean we should force businesses to supply their competitors? On the other hand, should we stand by and let the consumer be punished by corporate greed by making it easier for corporate entities to, for all practical purposes, monopolize their particular market?
It's a fine line to draw, and I doubt it can be drawn to everyone's satisfaction.

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