As the consequences of the Bell South merger with AT&T start to look worse and worse, we reprint this FISPA alert and action request.

[July 11, 2006]

On the ISP-CLEC list in June, Paul Rice, Executive Director of FISPA, ask ISPs to inform FISPA of Bell anti-competitive practices after the FCC, once again, endorsed the end of competition:

In response to our letter to the FCC concerning the Bellsouth-AT&T merger, I received a six inch thick ring bound single response sent to everyone who participated. First they re-characterize what we said:

"Earthlink and FISPA assert that Bellsouth has imposed several allegedly anticompetitive restrictions regarding wholesale broadband services."

Then, instead of denying anti-competitive behavior, they defend it!

".as to FISPA's claim that Bellsouth does not make available for wholesale the 256 Kbps or 6 Mbps versions of DSL. Bellsouth is under no obligation to do so. Bellsouth's 6 Mbps DSL service became available to end users after the effective date of the Wireline Broadband Order; thus, there is no requirement that Bellsouth make available the 6 Mbps transport componentavailable to FISPA or any other third party. Regarding the 256 kbps service, consistent with the Wireline Broadband Order, Bellsouth is continuing to provide the service at locations in existence as of the effective dated of that order but is not offering the service at new end-user locations."

First, I want to ask you—the members—to advise me, on the list or off, what you are seeing in the field concerning the 256 Kbps offering.

Second, is it not remarkable that they claim out of one side of their mouth that "deregulation" will foster competition and here they admit shutting off competition in a portion of the DSL market because the government didn't say they couldn't?

FISPA also sent the following letter to Senator Arlen Specter (R-PA), Chairman of the Senate Judiciary Committee, urging an anti-trust investigation:

Dear Senator Specter,

FISPA is foremost a "buyer's club" consisting at various times of 70 to 130 Internet service providers, with a strong concentration in the Bellsouth footprint. Some are CLECs—facilities-based and otherwise- but most are very small "mom and pop" to medium sized ISP operations.

I am writing to encourage the Senate Judiciary Committee not to let up in its concern over the Bellsouth/AT&T merger and net neutrality. Net neutrality cannot only be dashed by overtly charging content providers, but also by restricting intra-modal competitors to slower bandwidths at non-competitive access pricing. There is really no need to "wait and see" if the RBOCs are going to use control of the network to force consumers to buy from them by manipulating bandwidth speed—our members are experiencing this today.

In paragraph 74 of the FCC's Wireline Broadband Order, RBOC assurances of continued meaningful intra-modal competition were recorded:

"74. Given the nature and history of the broadband Internet access services industry, we expect that wireline broadband transmission will remain available to ISPs and others without any Computer Inquiry requirements. Incumbent LECs have represented that they not only intend to make broadband Internet access transmission offerings available to unaffiliated ISPs in a manner that meets ISPs' needs, but that they have business incentives to do so... [5] Finally, BellSouth has also evidenced a willingness, desire, and incentive to deal with unaffiliated ISPs absent a Commission requirement that compels them to do so.[6] For example, BellSouth has indicated that it will benefit financially from providing DSL transmission to independent ISPs, as it has an economic incentive to spread the costs of its network over as much traffic and as many customers as possible regardless of whether such customers are wholesale or retail…"

FISPA recently filed comments on the Bellsouth/AT&T merger with the FCC pointing out facts which reveal that the above representations—presented to the FCC as the "whole truth"—were actually deceptive half truths. The comment follows this letter in this e-mail.

 

In a nutshell, Bellsouth.net retails higher bandwidth, faster products than it makes available through wholesale to intra-modal competitors (i.e., if you want faster speeds you must buy from Bellsouth.net), and Bellsouth's retail offerings of these products are priced at or below the price of the slower wholesale offering to intra-modal competitors. This is what Bellsouth meant when it represented that it was willing "to deal with unaffiliated ISPs".

In response to our Comments, Bellsouth and AT&T jointly responded:

"Earthlink and FISPA assert that Bellsouth has imposed several allegedly anticompetitive restrictions regarding wholesale broadband services…"

Then, instead of denying anti-competitive behavior, they defended it!

"…as to FISPA's claim that Bellsouth does not make available for wholesale the 256 Kbps or 6 Mbps versions of DSL… Bellsouth is under no obligation to do so. Bellsouth's 6 Mbps DSL service became available to end users after the effective date of the Wireline Broadband Order; thus, there is no requirement that Bellsouth make available the 6 Mbps transport component available to FISPA or any other third party. Regarding the 256 Kbps service, consistent with the Wireline Broadband Order, Bellsouth is continuing to provide the service at locations in existence as of the effective dated of that order but is not offering the service at new end-user locations."

Joint Opposition, Appendix A, pages A-10 to A13.

This exposes the empty rhetoric about "regulation" being an impediment to competition; here they shut down intra-model competition because the government didn't say they couldn't!

In light of the reasons for divestiture in the 1980s and the experiences under the Telecom Act of 1996, it is foreseeable that any network operator will act without benevolent regard to competitors in favor of its own shareholders. The "wait and see" approach to enforcible net neutrality is a mistake.

"When ever there is an interest and power to do wrong", wrote James Madison to Thomas Jefferson in 1788, "wrong will generally be done…."

"In questions of power, then", wrote Thomas Jefferson, "let no more be heard of confidence in man, but bind him down from mischief by the chains of the [law]…"

"The time to guard against corruption and tyranny is before they shall have gotten hold of us. It is better to keep the wolf out of the fold than to trust to drawing his teeth and talons after he shall have entered."—Thomas Jefferson, notes on the State of Virginia, c. 1781-1783.

The wolf is already "in the fold" of intra-modal competitors. Please help these people keep their businesses by backing up the "fair and reasonable terms" requirement in the Telecom Act with anti-trust consequences.

Thank you.

Paul F. Rice, Executive Director

FISPA

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