
F.C.C. Asks AT&T for Details on Plans to Halt Fiber Expansion - gordon_freeman
http://bits.blogs.nytimes.com/2014/11/14/f-c-c-asks-att-for-details-on-plans-to-halt-fiber-expansion/?ref=technology
======
navyrain
It should be obvious that AT&T's "concerns" are simply a thinly-veiled threat
to withhold high-speed access from the citizenry unless they get guarantees
that they can manipulate said access with impunity.

The thing is that AT&T and others won't just pack up their broadband
monopolies and go home; they'll respond to whatever market conditions the
regulatory regime shapes. They can complain all they like, but the citizenry
overwhelmingly wants more integrity guarantees for their internet connections.

This sort of threat is akin to a tantrum from a spoiled child.

~~~
pessimizer
>AT&T's "concerns" are simply a thinly-veiled threat

I don't even think they are a threat. They're a rhetorical point that their
lobbyists and bought and paid for supporters in government are going to drum
endlessly leading into the 2016 elections.

\-----

Do you remember how Obamacare said you could keep your policy, but it turned
out that there were many horrible policies that wouldn't turn a profit if
there were better policies with lower prices available from exchanges, so the
insurance companies stopped offering them? Obama 'lied'. Just wait for
Obamanet, where Obama told everyone that net neutrality would guarantee equal
access for everybody, but AT&T couldn't afford to roll out to your town
because of the burden of his new regulations. Regulations that didn't exist
during the Internet's rise, and if they had existed would have strangled it in
it's crib.

It is simply unprofitable to operate under regulations that micromanage every
aspect, every packet that is delivered to every home. The rollout of gigabit
internet to 2M homes over the past two years (to wealthy/gentrified portions
of a few, big, prosperous cities) shows you how wonderful your internet could
have been if AT&T could have figured out to make their original plan to roll
that same speed out to _100 cities_ profitable under Obamanet. They couldn't;
nobody could - the only reason they rolled out to the 2M households was as an
extortion payment because Obama threatened to hold up their acquisition of
DirecTV if they wouldn't do what he wanted.

Obama wants to treat every piece of the internet equal[sic] - hardcore child
pornography and stolen music should download _exactly_ as fast as your netflix
that you paid for downloads to your TV, or your electronic medical records
(that keep your family safe) download to your family doctor. That seems like
something that should be managed by the technicians and job creators that
actually _built_ the networks, and have _run_ the networks _since the
beginning_ \- maybe they know a little more about your internet than some
jerks in Washington that are worried that their fancy wine and cheese magazine
website won't download fast enough because no real people want to read it.
They don't like what we like, so their socialist instincts kick in, and they
get scared that what they like can't survive in the market without cheating
(Solyndra!!! Solyndra!!! They're trying to kill us!!!), so they regulate that
their things must always have as much of the internet as everybody else's
things do, even if nobody has ever visited those websites in so long that when
you go there, you get spiderwebs on your keyboard (chortle!)

It's socialism for their internet, but not for yours. When you hear them
talking about this 'net neutrality' being 'fair' for everyone, look at all of
those people in Brooklyn with their super-fast internet while your netflix is
freezing so long that you can make a sandwich before it comes back and ask
yourself - _is this fair???_.

\-----

If AT&T weren't confident it had the political support, it would do whatever
it was told. It would still be absurdly profitable. Profit levels might even
end up being written into the law. AT&T knows that they have all of the
Republicans (even the libertarians), they have the _head of the FCC_ , and
they have plenty of individual Democrats.

I think it's a good thing because the industry is going to pull out all stops
and show all of their cards in order to kill this. We'll know who to target
politically and who to support. I have little doubt that they will win,
though, and this push will be entirely killed for some legislative procedural
reason or in the courts on a technicality. Obama is terrible, always loses
because he doesn't actually care, and the only reason he's pushing this is
political pandering to people like me.

/rant

~~~
xaa
First, there's quite a difference between _unprofitable_ and _less
profitable_.

Secondly, the internet _is_ a utility. Utilities are regulated because they
are essential and because they spawn natural monopolies. Interestingly, the
prices I pay AND the service I get for utilities that are recognized as such
and regulated (electricity, water, natural gas) are great. Completely the
opposite for my cell service and internet. YMMV.

The only way capitalism works is if you have competition. The investment costs
are too high, the players have implicit noncompete agreements, and when
competition threatens to happen in this area, one player just buys out the
other.

~~~
pessimizer
>First, there's quite a difference between unprofitable and less profitable.

Not for fiber that was never rolled out. That can be exactly as profitable or
unprofitable as you need it to be to make your point.

~~~
xaa
The CEO is implicitly claiming here that: a) given the current regulatory
environment, the expansion would be profitable (since they're doing it), and
b) if net neutrality were passed, there is a serious possibility that it would
no longer be profitable.

Net neutrality does not really affect what customers pay. So, there are two
possibilities here: the first is that AT&T was planning on shaking down
Netflix, Google, et al for peering, in an amount large enough to make the
difference between the expansion being profitable or unprofitable. The second
possibility is that he is full of hot air and net neutrality would not
significantly affect their profit margin.

~~~
pessimizer
If Google and Netflix want to use all of the internet and still take all of
your money, why shouldn't they pay for it? Under net neutrality _they 're not
allowed to._

~~~
xaa
Traffic on the modern internet is almost totally unidirectional: it comes from
big content providers and goes to consumers. When I pay my ISP for internet, I
am paying them for the service of delivering the bits from the content
providers to me. The concept of Netflix or Google "using up" all the internet
is incoherent, because by the definition of an ISP all the traffic they
generate is going to consumers who are paying the ISP and are bandwidth-
capped.

Imagine if the major postal service providers decided that, instead of only
the sender paying for the package, now both the sender and the receiver have
to pay, because they are both "using" the service.

I suppose there is nothing inherently wrong with someone being paid twice for
the same service, although it comes across as incredibly greedy, but the end
effect is that consumers pay more and the ISPs get more profit, because the
content providers' costs will be passed on to consumers.

EDIT: There's also no logical reason why the content providers should be
paying ISPs for peering. The reverse is equally "logical". You might as well
ask why Google and Netflix aren't shaking down ISPs because they provide
things that customers want and the ISP would be less desirable without them.

~~~
klipt
> I suppose there is nothing inherently wrong with someone being paid twice
> for the same service, although it comes across as incredibly greedy, but the
> end effect is that consumers pay more and the ISPs get more profit, because
> the content providers' costs will be passed on to consumers.

Well there are obvious conflicts of interest here. Many ISPs are also content
providers. E.g. Comcast has xfinity TV streaming which competes pretty
directly with Netflix.

So if Netflix has to pay an exorbitant amount to link a server to Comcast but
Comcast can stream stuff to their customers basically for free...

------
akersten
I can't think of a clearer indication that a monopoly needs to be broken up
than when they hold the customer hostage after their lobbying doesn't affect
legislation to their benefit.

~~~
hughw
Every thirty years, we have to break up AT&T again.

~~~
vertex-four
You did it entirely wrong last time - you split it up geographically, but
still had the ISPs owning the last mile infrastructure. You only actually have
to split it into two companies - one which owns the cables, and the other
which runs an ISP.

Then you write a charter which requires the company which owns the cables to
sell access to any ISP at the same terms and cost.

Then you implement a law which says that no ISP may own a last mile, and all
last mile infrastructure past and future must be under those terms.

That way, you entirely skip the issue of the cable owners having no
competition or incentive to expand, and you have competition between ISPs as
well, without tying one to the other. ISP implements throttling? You can use
another ISP that uses the exact same neutral last mile.

This is more-or-less what the UK does, with the addition of the no-ISP-may-
own-a-last-mile law, which I strongly believe we should implement.

~~~
dragonwriter
> You did it entirely wrong last time - you split it up geographically, but
> still had the ISPs owning the last mile infrastructure.

The last time AT&T was split up, there weren't any "ISPs".

And at that time AT&T was split into (for the telephone service parts):

1\. The reduced AT&T -- long-distance and some other things

2\. The "baby bells" \-- local service in different geographical regions.

> Then you write a charter which requires the company which owns the cables to
> sell access to any ISP at the same terms and cost.

Common carrier rules _were_ applied to AT&T's telephone lines, and DSL was
also common carrier, covered under Title II until it was reclassified in 2005
(so much of the Title II hand-wringing over Open Internet rules misses the
point that consumer internet in the US grew up when the lines were covered by
Title II, and it manifestly _did not_ kill innovation.)

~~~
vertex-four
> The last time AT&T was split up, there weren't any "ISPs".

Indeed, there were phone companies. It seems obvious now that the breakup was
done wrong, but with the technology at the time it likely couldn't have been
done how I'd like it to be done today. I over-simplified when I said "you did
it wrong".

> Common carrier rules were applied to AT&T's telephone lines, and DSL was
> also common carrier

But they didn't split last mile cabling from whatever runs on top of it, which
is the main issue and the only thing that'd actually work to allow quick
reactions to a failure to provide adequate service. Otherwise, you have the
ISP giving preferential treatment to itself, even though the law says it
really shouldn't be.

~~~
toast0
> But they didn't split last mile cabling from whatever runs on top of it,
> which is the main issue and the only thing that'd actually work to allow
> quick reactions to a failure to provide adequate service. Otherwise, you
> have the ISP giving preferential treatment to itself, even though the law
> says it really shouldn't be.

The ILECs were permitted to sell to retail customers and required to sell to
wholesale customers; and there was preferential treatment (especially around
pricing/promotional rates), but it was significantly more competitive than
today, and price preferences could have been resolved by narrow regulatory
action. Yes, a complete split would be more competitive, but a partial split
is probably more likely to go through, and would put us in a much better
place.

------
azinman2
Seems to me that they're trying to strong arm the government to get what they
and all the major ISPs (especially those with media services to offer) into
more ways to double dip revenue streams.

It's kind of an odd double edged play, in that trying to purposefully prevent
faster internet nationally (to get the gov't to change its tactics) also makes
AT&T less competitive at a time that they offer only DSL to most of the
country. Guess that since wired data is only 30% [1] of they revenue they make
enough money on mobile+voice that they have this potential revenue stream to
dwindle in their arrogance? Or are they just knowing that G.Fast [2] and other
ways of extending copper will come so they're playing a fiber card more
willingly?

Unfortunately enough money is being exchanged between all the major players &
politicians that no matter what we won't end up with a clean net neutrality.
This is just a public display of that -- it would be infuriating to know the
conversations we don't hear about. I'd love to hear someone finally understand
that this is making the US less competitive and get it as a proxied issue in
the 2016 race.

[1]
[http://www.att.com/Investor/ATT_Annual/2013/downloads/att_ar...](http://www.att.com/Investor/ATT_Annual/2013/downloads/att_ar_2013_highlights.pdf)

[2] [http://www.cnet.com/news/lowly-dsl-broadband-poised-for-
giga...](http://www.cnet.com/news/lowly-dsl-broadband-poised-for-gigabit-
speed-boost/)

~~~
wtracy
> also makes AT&T less competitive

I'd bet dollars to donuts that the proposed cancellations only affect areas
where no competition exists to begin with.

------
programminggeek
It's almost as if AT&T was only planning on rolling out fiber if they could
sell it at a premium and effectively end around the cable companies in the
next 5 years by replacing traditional TV charges with premium on-demand
Netflix/Hulu/Whatever else. That would be a smart move for AT&T, but would be
bad for the consumer. Just think, instead of spending $10 for Netflix, you
could spend $15-20 to have FAST NETFLIX (and probably other bundled junk you
don't care about). Even better, they could bundle internet with netflix with
phone with dvr for like $150 a month!!!!! Think of the margin on that!!!!!

Seriously though, it's good that the FCC is looking into this, but I doubt
they will do much about it. At some point there is just too much money
involved for the "right thing" to happen when it comes to your average
consumer/citizen.

------
grecy
Exactly this happened to the monopoly ISP/telco up here in the Yukon, Canada.

When the CRTC announced they were slashing the prices of the telco's proposed
"bulk data pipe" products by more than 70%, the telco responded by saying they
were no longer going to keep expanding their fiber network to more
communities, because "it wouldn't be profitable to do so given this harsh
pricing scheme".

There was huge outcry, and everyone pointed out this is exactly the reason a
monopoly is bad, because they can hold everyone hostage, etc. etc.

The final result? The CRTC caved, and let the ISP/Telco charge whatever they
wanted for the "bulk data pipe" products.

~~~
xeroxmalf
Not quite the same, given Yukon has a population density (2011) 0.07 /km2
(0.18 /sq mi), which is actually fairly hard to make a profit on.

~~~
grecy
It's not hard at all when the CRTC subsidies said Telco/ISP for tens of
millions of dollars annually. The internet products are some of the most
expensive in the entire world.[1]

[1][http://www.iphoneincanada.ca/carriers/the-most-expensive-
ban...](http://www.iphoneincanada.ca/carriers/the-most-expensive-bandwidth-in-
the-world-yukons-northwestel/)

------
vmarsy
So AT&T threatens by halting their fiber expansion [1] but at the same time
they try to beat Google in some fiber race [2]. Isn't Google actually
'enjoying' this news?

[1] [http://www.reuters.com/article/2014/11/12/us-at-t-
regulation...](http://www.reuters.com/article/2014/11/12/us-at-t-regulations-
internet-idUSKCN0IW1JC20141112?feedType=RSS&feedName=technologyNews)

[2] [http://www.cnet.com/news/at-t-attempts-to-out-google-
google-...](http://www.cnet.com/news/at-t-attempts-to-out-google-google-in-
austin-fiber-race/)

~~~
georgemcbay
Not sure if I'd say they are "enjoying" it.

I don't think Google really wants to be in the ISP business, I think they just
felt that moving into it would be the best way to stimulate the existing ISPs
to raise bandwidth and lower prices (on the premise that as an Internet ad
company, the more Internet people consume the better Google does).

Which has worked, but only hyper-locally (eg. Comcast, Time Warner and AT&T
customers in areas served by Google Fiber get much better deals from those
carriers pre-Google Fiber, but the rest of us get just as fucked as always).

------
maxlybbert
Reasoning by analogy ( [http://www.stroustrup.com/bs_faq.html#really-say-
that](http://www.stroustrup.com/bs_faq.html#really-say-that) , "proof by
analogy is fraud"), I can't help but compare this to toll roads and roads that
are free to drive on. I don't know anyone who likes toll roads or toll
bridges, and I grew up in an area where they weren't common: I was a married
adult before I actually saw a real toll booth. If the choice is between "toll
road" and "non-toll road," then voters always choose a non-toll road. So toll
roads are only ever built when the alternative is "no road."

Clearly AT&T and others have the ability to abuse their power over the
infrastructure in ways that aren't possible in the world of toll roads. But,
fundamentally, why would AT&T upgrade the infrastructure if they can't
guarantee they'll get a profit from the improvements? In other words, is the
debate really between "net neutrality, with little or no infrastructure
improvements" versus "no net neutrality, but the infrastructure gets upgraded
regularly?"

For the record: AT&T's current move is a simple strong arm tactic: they were
willing to install fiber last month when they had no guarantee of an ability
to collect a "toll" over it, the world hasn't changed so much that the project
won't turn a profit. But I still think it's a useful question to ask: how do
the companies providing infrastructure get paid, and why would they bother
upgrading that infrastructure?

~~~
fernly
Would it not be the case that if ATT ran fiber to my home, they would charge
me a fee to connect to it? (And possibly an installation fee to plug it in,
and a rental fee for a modem to connect to it, but set those aside.) The point
is that each terminus of a fiber is a cash generator, just as each landline
telephone connected to ATT's voice network is a cash generator. They would
invest in "infrastructure" in order to ensure a long-term flow of small cash
payments -- exactly as they did for telephones in the 1920s, just as
electrical and gas utilities did in the 1890s.

~~~
maxlybbert
They have some costs running and maintaining the system. Connection fees
aren't enough, of course people pay monthy subscription fees.

Again, I realize there are obvious ways to abuse its control of its network.
I'm a big fan of net neutrality, I just want to know that we've considered
what the world will look like down the road. And, really, I can see valid
reasons to treat different traffic differently. If Netflix wants to send 2GB
of data to a person, there is a deadline of how quickly that data should
arrive for a good viewing experience. If somebody wants to deliver 2GB of data
to an email server, they're probably OK if it takes a while. Then again, under
the current system, there's no way to say what kind of latency or throughput
data needs. The best AT&T can do is guess based on who the endpoints are.

------
exabrial
You know, at first, I really was like "yee yee" when I heard the news about
reclassification of broadband as a regulated common carrier. YAH, we're really
stickin it to the man in the suit at Comcast and TWC!

It got me thinking... this is like, the nuclear option. Innovation around
telephony stagnated. Since everyone and everything was the exact same, there
was no need for innovation and competition was pretty much illegal. I'm not so
sure I want the same for broadband. I'm starting to think it's not such a good
idea.

Ideally, we need some middle ground. TWC shouldn't be able to slow youtube
down because it competes with their cable business. Actually no one should be
able discriminate based on content, period. We should maybe think about
classifying ISPs and Transit providers as official legal terms, and the types
of contracts you're allowed to enter depend on what type of business you are.

Anyway, flame away, I know this won't be a popular opinion. But that's my
thoughts on the subject currently

------
brownbat
If the current "complaint" from ISPs is that a few single sources are hogging
all the bandwidth (and their response is to both throttle those services and
offer upload speed match promotions[1]), why isn't there a Netflix / YouTube
torrent app, where we end users all pass around encrypted traffic to each
other that's hard to signature?[2]

Nails that stick up get hammered down. If our favorite services are getting
pounded, why don't we all just work together to offer cryptographically
obscured asylum?

[1] [http://blogs.wsj.com/cmo/2014/08/25/verizon-fios-speed-
match...](http://blogs.wsj.com/cmo/2014/08/25/verizon-fios-speed-match/)

[2] Acknowledging that "hard to signature" means there's a cat and mouse game
in store. It'd be worth it.

------
adventured
I haven't figured out why the government doesn't focus on spurring a large
increase in competition, rather than trying to shoehorn existing monoliths
into a regulatory package that nobody can seem to agree upon. Net neutrality
or not, I'd like to see a lot more competition in the market, such that your
average consumer has, say, three high quality fixed broadband options.

We're only going to get to universal 1gbps consumer broadband speeds in the
next decade with a lot more competition.

Nothing about net neutrality will encourage the sloth telecom companies to
boost speeds faster.

Google demonstrated very eloquently that with a slight prod, companies
including Comcast will dramatically boost internet speed.

~~~
dragonwriter
> I haven't figured out why the government doesn't focus on spurring a large
> increase in competition, rather than trying to shoehorn existing monoliths
> into a regulatory package that nobody can seem to agree upon.

Spurring a large increase in competition would _involve_ shoehorning the
existing monoliths into a regulatory package that would be even harder to
agree on that some form of net neutrality -- and would probably include some
form of net neutrality to prevent the newly-spurred ISP competitors from
having an incentive to consolidate in order to extract rents from a non-
neutral internet.

------
nostromo
Question: why do we need net neutrality right now? It seems to be pre-emptive
legislation. (The ISPs _might_ do something bad, so we need to prevent it.)

I hear a lot of concerns about internet access costs. If that's the true
problem, then let's enable more competition. The last thing I want,
personally, is an internet provider as innovative as PG&E.

~~~
azinman2
Because they're actively slowing connections to their benefit.

[http://www.huffingtonpost.com/2014/06/13/netflix-slow-fcc-
ve...](http://www.huffingtonpost.com/2014/06/13/netflix-slow-fcc-
verizon_n_5492542.html)

When was the last time an ISP actually truly did something innovative that has
stood the test of time outside of offering faster internet speeds? Or
multiplexing cable/telephone (aka more delivery of content aka a utility)?

~~~
nostromo
Let's assuming they did something bad here. Is the best response to give the
FCC more control over the internet?

Before answering, consider that the current head of the FCC is a former
lobbyist for ISPs including Comcast and TimeWarner.

Or is the best response to increase competition among ISPs? How many people
would choose the ISP that throttles Netflix?

~~~
lhc-
And how do you plan to increase competition? The current climate doesn't do
that. The barriers to entry are far too great for realistic threats outside of
companies like Google that have money to burn.

By regulating the ISP as common carrier, you are actively encouraging
competition, by forcing them to lease out the last mile to smaller providers
who can give real service and actually have to compete. Net Neutrality is
aimed directly at providing more competition on the last mile, where our
current providers have failed so badly.

~~~
nostromo
Common carrier designation would freeze our current infrastructure in place
for all time. There is no incentive for a company to lay high speed fiber if
they are forced to rent that fiber to their competitors at cost.

Why do you think we use cable for our internet and not phone lines? The phone
system has been frozen in amber since the 80s. I'd be sad if the same thing
happened to my internet pipe.

And how do we increase competition? The federal government could overturn
local and state laws that make ISPs so expensive to roll out.

~~~
azinman2
An interesting point.. I had to lookup that cable broadband is an information
service and thus not subject to it. CCD was also what helped break up the AT&T
monopoly, so it's clear that eliminating that all together isn't a solution
either because without it one company still dominated and stopped
innovating/competition.

If Obama and many on HN are advocating for net neutrality, which is requiring
a shift in the laws, perhaps that also means that CCD is up for change as
well.

To me the heart of the matter isn't so much CCD is that ISPs would be treated
as their name suggests -- simply a provider of Internet as a utility where
packets go through unchanged. That they also own NBC or Hulu starts to
complicate issues because their major potential is to multiply those
businesses together while strangling alternatives. The opportunity is too
great and allowing these mergers in the first place was a terrible idea.

The other issue is how to get them to actually compete in a meaningful way.
Where I live, in SF of all places, I surprisingly have very little choice when
it comes to the internet. Comcast is basically the only real choice as they
blow away DSL speeds, and then that's that. No one else serves me as a
consumer. And this is San Francisco! I think this is why municipalities are
starting to get into the ISP business, which seems to be the only credible way
to start actually giving these guys some kind of threat. That or Google fiber,
but it's still pretty nascent. The US is just so big that without a meaningful
way for high speeds to get distributed at a local level it's too expensive for
anyone to enter. Either we need completely new technologies that allow people
to enter at low cost, or we get local gov't somehow involved in facilitating
basic infrastructure like water or power.

~~~
sp_nster
> I surprisingly have very little choice when it comes to the internet.
> Comcast is basically the only real choice as they blow away DSL speeds, and
> then that's that. No one else serves me as a consumer. And this is San
> Francisco! I think this is why municipalities are starting to get into the
> ISP business, which seems to be the only credible way to start actually
> giving these guys some kind of threat

San Francisco is a city where red tape, bureaucracy and the people will not
allow another local access provider build.

[http://www.dslreports.com/shownews/ATT-Sues-San-Francisco-
Ov...](http://www.dslreports.com/shownews/ATT-Sues-San-Francisco-Over-UVerse-
Cabinet-Delays-129087)

If San Francisco decided to build a municipal fiber network, they would be
sued into bankruptcy by the ISP’s.

------
FlyingLawnmower
I don't really understand what people are getting upset about. Isn't this just
a business decision on their part not to invest $XXmillions on deploying out
fiber when there's uncertainty about what regulations they will be subjected
to?

The big debate around net neutrality is that Comcast throttled Netflix users,
but I can't help but think that there's a real cost associated with the
massive amounts of bandwidth that hi-def video streaming consumes. If AT&T has
no scope to offset that cost to either Netflix or the customer, then doesn't
it make perfect sense for them to not deploy this until they know all the
details?

Granted, I have absolutely no knowledge about any of this stuff...I'm hoping
someone on HN can educate me about why this isn't just a logical business
decision, and why I should be upset about this as a whole.

~~~
tzs
AT&T has said they had plans for fiber expansion in 100 cities, and they have
had to halt those plans because of uncertainty over net neutrality regulation.
Many suspect that this is simply not true--they never actually had plans in
the first place. Hence, the FCC would like to know what plans they have
_actually_ halted.

~~~
hga
" _AT &T has said they had plans for fiber expansion in 100 cities_"

At DRLRports.com, this is referred to as "Fiber to the Press Release".

AT&T all but stopped their fiber rollout after the Great Recession started
(along with Verizon), all current action is just to try to avoid too much
embarrassment from Google Fiber and the like. And of course sooner or later
the Net Neutrality dance would give them a convenient excuse to not even
pretend to do it.

------
golemotron
AT&T really doesn't understand yet that they are a utility.

~~~
wmf
AT&T was a utility for decades. I'm not surprised that they don't want to go
back.

