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TO READ THE PRESS RELEASE
TO READ A COPY IN "WORD"
The Bell Companies Are
Harming America's
Internet & Broadband
Future:
National Survey of Internet Service Providers
(ISP)
Shows Millions of Customers
at Risk.
Conducted by
New Networks
Institute
Bruce Kushnick
826 Broadway, Suite 900,
New York, NY 10003
212-777-5418
www.newnetworks.com
December 14th,
2001
Table of Contents
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Summary Findings And
Conclusions
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3
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Introduction And
Understanding The Issues
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5
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1) Rate The Bells For Overall
Service
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10
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2) Do You Offer DSL Or
ADSL?
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10
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3) If You Provision DSL With
A Competitor Rate The Bells' Role
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12
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3A) If You Provision DSL
Through Bell, Rate The Bell
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13
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4) Which Of These Statements
Best Describes Your View About Service
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15
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5) If You Could Say Something
To A Regulator Or The Press About The Bells Impact
On Competition And Your Business, What Would It
Be?
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16
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6) Rate The FCC
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19
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7) Rate The State Regulators
(Public Service Commissions)
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19
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8) Are The Phone Networks
'Open To Competition'?
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21
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9) What 3 Issues Are Critical
To Your Business?
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22
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Appendix One: The
Survey
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26
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Appendix Two: Survey Results,
Methodology And Sanity Checks
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28
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SUMMARY:
Survey of Internet Service
Providers (ISPs)
FINDINGS
Approximately 43% of all ISPs do
not offer or have stopped offering DSL, primarily because of
the Bell's treatment. ---- And millions of customers are the
losers.
The FCC and the States are not
defending the rights of the 3000 Independent ISPs across
America --- Expect job losses, slowed innovation, slowed
investments, and Tech purchase declines.
- 4.1 (out of a possible
10=excellent) is the average score ISPs rated their local
phone companies for overall performance --- a failing
grade.
- 3.5 (out of a possible
10=excellent) is the average score ISPs rated their local
Bell companies for their DSL provisioning--- a failing
grade.
- 80% Believe that service is "Not
OK" or "Terrible" ----there are continuous problems and
this cost their company money and time.
- 77% Believe that the FCC or Public
Service Commissions are "Not Helpful, Not Effective" (or
worse)
- 84% Believe that the phone
networks are essentially closed. The Bells should not
have been allowed into long distance.
CONCLUSIONS:
- The Bells are freezing out
competitors, both CLECs and ISPs, from competing in
DSL/Broadband and Internet Services. This directly harms
America's Digital Future.
- There is a "Chain-of-Pain" for
customers. Every time an ISP can't get an order through
or offer a competitive service, the Customer is directly
harmed.
- These anticompetitive issues have
been long standing over the last five years. They have
been continuous and effect the entire Bell controlled
networks across the country.
- We estimate that approximately
half of All ISPs have gone out of business, many from the
Bell caused problems. We estimate that there are 3,000
independent ISPs in the US, and with their CLEC partners
handle some 40% of all Internet Services.
- If the FCC and states do not step
in and enforce the laws, the entire competitive ISP and
CLEC markets are at risk and customers are the
losers.
- The Bell networks are NOT OPEN TO
COMPETITION, even in the states that have already been
authorized by the FCC to offer long distance phone
services are supposed to be open.
Solutions:
1) The FCC and States must stop
talking and start investigating these valid claims of
illegal and anti-competitive acts.
2) The Broadband Bill of Rights:
New Networks Institute, with the help of other industry
members, has created "The Broadband Bill of Rights" to
address many of the issues. Over 700 customers have
co-signed this important proposed piece of legislation. See:
http://www.newnetworks.com/broadbandbill.htm
3) Congress should not pass any new
law, including the proposed Bell funded "Tauzin-Dingell"
bill until there has been an investigation and solution to
the Bells' harmful treatment of ISPs and CLECs. The current
Bell actions are harming America's Digital
Future.
4) No Bell Long Distance
application should be considered by the FCC before there
is a full investigation and restitution made to competitors
and ISPs who have documented Bell illegal acts. (The Bells
are supposedly restricted from entering long distance until
the networks are "open" to competition. The data clearly
shows that the networks are not open today, even in the
states where the Bells have already been allowed into long
distance in NY, TX, MA, PA, OK, KS to date, and are filing
in NJ, CA, and GA among others.)
Introduction and Understanding the
Issues
This report is intended to supply the
results of a nationwide survey of ISPs. It is also intended
as a Call-to-Arms for customers who care that their own ISP
is now entering the ''endangered species list." And it is a
Call for ALL regulators to stop talking and start enforcing
the basic laws.
To put the industry in perspective,
from a high of some 7500 companies, today, there are an
estimated 3000 remaining independent ISPs ---- like
Bway.net, Panix, STIC, Opcenter, Wyoming.com or
Iglou.
It is also estimated (by ISPWorld,
2nd quarter) that these 3000 ISPs represent
approximately 43% of all online accounts---some 30 million
customers nationwide.
Internet Service Providers (ISPs) are
mostly comprised of a rare breed of entrepreneurs who, at
their own expense, clearly saw the need to supply customers
with the foundations of the Digital Age -- Internet and web
service provision and everything from e-mail to the creation
of web sites. And it has been this group of entrepreneurs
that has been the real innovators of our Digital Future, not
the monopolies who supply local phone service, such as the
Bell companies.
Most independent ISPs are also local
businesses that provide jobs and contribute to the community
in meaningful ways. Rural ISPs are especially important to
their hometown economy and to their users, who are often
friends and neighbors.
ISPs have the right to use the
telephone network. The Telecommunications Act of 1996, and
even the original Telecommunications Act of 1934, gave these
companies the legal right to exist, with the intention that
they flourish and provide innovative services throughout
America.
Unfortunately, these companies are
also beholden to the Bell companies to use the phone
networks -- the public phone networks that all customers
use. And it is clear from this survey that the ISP and CLECs
are being harmed by the Bell monopolies --- the very
companies that they must purchase services from.
How it Works: The Customer--- ISP
--- (CLEC) --- Bell Connection.
- Dial-Up Connections: When a
phone customer (Dial-up user) goes online, they first
dial up their ISP over their local phone lines, and then
the ISP connects them to the "Internet" and Web. Both the
ISP and the customer purchase services from the Bell, but
they are both beholden to the local phone monopoly to
supply services.
- DSL Connection: In the case
of DSL, another piece of technology, commonly known as a
"DSLAM" is required for the high-speed connection, as
well as some equipment on the customer's site. The ISP
offering DSL can either go to a CLEC, a (Competitive
Local Exchange Company) to provide the DSLAM and other
necessary equipment, or they can attempt to use the Bell
supplied DSLAM. In almost all cases however, the
phonelines and connections go over the local public phone
networks --- which are controlled by the Bell
companies.
In all of these situations, the
problems ISPs encounter are endless, and this effects ALL of
their customers. Take the case of one California ISP who
explains that many individual orders can have numerous
problems --- from the ordering process to installation
delays and major mistakes in billing. Imagine yourself being
overbilled, or your order doesn't go through and you wait
weeks/months for your service.
"Orders sometimes don't
get processed at all, or are processed incorrectly" or
"Cancellations are commonly not processed, so the
customer's line is not released for them to order
other service, plus they are overbilled."
(Ironically, SBC/Pac Bell, the local
phone company, has applied to enter Long Distance in
California. They state that their networks are properly
open. This ISP has clearly shown that the California markets
are NOT open to ISPs. Imagine running a company where your
only supplier can treat you as it sees fit---and not get
penalized for any of the myriad of problems that occur on
every order. )
In many states, the Bell companies'
DSL services are not profitable for ISPs to resell, and it
is harming the entire customer roll out of DSL.
For those offering DSL in the SBC
territories, there is a new wrinkle. (SBC control ALL of Pac
Bell, Ameritech and Southwestern Bell.) SBC has decided
mandate use of a new contract, which would harm ISPs even
more and close them out of the DSL market.
As one Texas ISP put it.
"We are no longer able to add
new DSL services in the SWB area as SWB is trying to
force us to sign a new, unreasonable contract. SWB is
threatening to turn off our existing SWB based DSL
customers after 1/1/02 if we do not sign the new
contract."
Today, CISPA, the California
ISP Association has an ongoing Complaint with the California
Public Service Commission, while the Texas ISP Association
has an ongoing Complaint with the FCC. To read the
CISPA overview filing with the FCC
http://www.cispa.org/fl008.html
To read the TISPA Complaint with the
FCC. http://www.tispa.org
The unfair Bell DSL pricing to ISPs is
not new. In fact, the issue of Bell's pricing being
discriminatory and predatory has been an issue ever since
Verizon and the Bells started to roll out their own DSL. NNI
filed a complaint with the New York regulators in 1998 which
clearly showed that the Bell pricing made sure that only the
Bell company would offer the product. http://newnetworks.com/baadslscrewisp.htm
Using a Competitor only helps a
little. Harm to CLECs has also harmed ISPs and Customers.
Over the last two years, there has been a collapse of a
related group of entrepreneurial telephone companies --- the
Competitive Local Exchange Companies (CLECs) and anyone who
has been reading the business section knows that many of the
companies that have gone bankrupt, such as Northpoint, and
Rhythms, have also complained about the Bells. To read our
report on the Bells' treatment of CLECs see:
http://www.newnetworks.com/clecharm.htm
There are a few competitive companies
such as New Edge Networks or Covad that are still offering
competitive DSL services. However, the ISPs and the CLECs
still have to use the Bell controlled networks.
The Role of the Regulators-- FCC
and States Fiddle while ISPs, CLECs and Customers Burn.
It is clear from the last four years of ISP and CLEC
surveys that these companies almost unanimously feel that
the FCC and the states have not stepped up to the plate to
fix the myriad of documented problems.
Dave Robertson, the head of the Texas
ISP Association, recounted his recent meeting with Chairman
Powell and senior staffers at the FCC Enforcement
Bureau.
"The meeting was Tuesday May
8th. In a nutshell, all the "bad acts" submitted to
them to date have resulted in exactly "ZERO" dollars
in fines, and little delay in their 271 approvals for
the Bells to jump into the long distance market. We
asked for something blatant as handwriting on a wall
as to the future of the complaint process as we are
approaching it. We got it. WE SHOULD EXPECT NOTHING
FROM THE INFORMAL COMPLAINT PROCESS. We should expect
nothing from any complaints we have submitted to
date.
"A couple of weeks ago we met
with a senior person in the ENFORCEMENT BUREAU. After
a one-hour meeting and receiving some heartfelt
empathy for the plight of ISPs and the consumers who
are being victimized by the illegal, anti-competitive
behavior, I suggested that our best move might be to
just jump out a window. He suggested we might want to
consider throwing a chair out of the window first, so
we wouldn't get cut on the glass as we
jumped."
In fact, The Texas ISP Association
presented an entire book of material showing violation after
violation. To read this 113 page series of violations
see:
http://www.newnetworks.com/SWBCOMPLAINTS0420.pdf
This observation of state public
service commission and FCC's lack of enforcement and
'laizze-faire' attitude has been echoed in thousands of
other documents, especially in the filings by CLECs and ISPs
pertaining to Bells' entry into Long Distance state by
state. Appendix Two gives one CLEC's analysis of the lack of
'openness" in Massachusetts. However, though the analysis
showed the networks were essentially closed, the FCC granted
Verizon's MA Long Distance application, even though the
networks are supposed to be fully open before the Bells can
offer long distance.
Another recent article "Disconnect How
Bush and Michael Powell are killing the New Economy. And how
to turn it around" by Karen Kornbluh that appeared in
Washington Monthly, Oct. 2001, lays out how Rhythms, a
bankrupt CLEC who provided DSL with their affiliate ISPs,
was harmed by this lack of enforcement. http://www.washingtonmonthly.com/features/2001/0110.kornbluh.html
What Customers Lose?
The ISPs are smaller local firms that
have not lost sight of customer needs, and as a result, will
usually deliver a higher-quality product. If this segment of
the industry does not survive, then the entire telecom and
tech sector is hurt, and the American public is left with no
choice but a monopoly product with little innovation, cost
savings, or quality customer service.
Additionally, a recent survey
conducted by NetAction of customer satisfaction of DSL,
(released 7/25/01) clearly showed that competitors have a
smaller percentage of complaints as compared to the Bell
company services. See:
http://www.netaction.org/broadband/dsl/
"Broadband users who get service
from competitive DSL providers or cable companies have a
smaller percentage of complaints than DSL users served by
the incumbent regional Bell monopolies, according to a
NetAction report on consumer satisfaction."
"In general, the Bells' customers
had to wait longer to have service installed, were more
likely to have been billed before service commenced, and
are less satisfied with technical support and customer
service,"
Once again it is clear that customers
will lose choice and quality services if the Bell companies
succeed in harming competition.
Industry Next Steps:
The Bells Should Not Be Allowed
Into Long Distance The Telecommunications Act of 1996
allows the Bell companies to enter the long distance
services market only after they have been able to
satisfactorily prove that their networks are fully open to
competition. Since 2000 numerous states, including New York,
Texas, Massachusetts, Kansas, Missouri, Oklahoma and
Pennsylvania have allowed their respective Bell company
(RBOC) into long distance. The Bell companies have now
applied to enter California, Louisiana, Georgia, and New
Jersey, among others. These networks are not open to ISPs,
however. States that have already allowed RBOC Long Distance
must reevaluate. No new RBOC Long Distance should be allowed
until there is a complete investigation of ISP harm, and
retribution for illegal acts.
The Broadband Bill of Rights.
In 2000, New Networks Institute, with the collaboration
of ISPs, CLECs and customers, drafted a new proposed piece
of legislation that lays out many of the ongoing problems
and proposes some solutions, with the most obvious to
enforce the laws and pay compensation to those ISPs, CLECs
and Customers who are harmed. To read this important
document, see: http://www.newnetworks.com/broadbandbill.htm
Enforce the Current Laws: The
top issues for ISPs are simply to get what the laws
presently grants them--- protection from monopoly abuses and
anti-competitive behavior. The FCC and States must
stop talking and start investigating these valid claims of
illegal and anti-competitive acts.
Congress should not pass any new
law, including the proposed Bell funded "Tauzin-Dingell"
bill until there has been an investigation and solution to
the Bells' harmful treatment of ISPs and CLECs. The current
Bell actions are harming America's Digital
Future.
Opening Cable Networks? Today,
ISPs have been restricted from using the cable networks to
offer high-speed cable modem services. AOL-Time Warner has
started to allow ISPs access, and with the current
bankruptcy of Excite@Home, which has led to the stranding of
thousands of customers, the question of opening the cable
networks becomes more germane. However, this report focuses
on what we consider to be most critical --- helping the
current ISPs remedy their immediate problems.
In Conclusion: The survey
results speak for themselves. They reveal an industry under
siege from the local monopolies. The ultimate outcome will
effect virtually every American Internet and broadband
customer. We ask anyone reading this to send a strong
message to their state regulators, Congressmen and the FCC
--- Protect America's Independent ISPs. (For Scope and
Methodology see Appendix Two)
The Survey
Results
1) On A Scale Of 1 To Ten, Where 10 Is Excellent, How
Would You Rate:
- Overall Services from the Bell
(or GTE)
- The Overall Ordering
Process?
- The Installation
Process?
- The Post "Up and Running"
Process?
As you can see from the exhibit below,
the Bell companies are receiving failing grades in virtually
all areas of Customer services --- Overall, the Bells
received a grade of 4.1 on a scale of 1-10, where 10 is
excellent, and Ordering and Installations received even
lower scores --- only a 3.5
Rating the Bell Companies Overall Services by
ISPs
(10= Excellent)
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Overall Service
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4.1
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Ordering
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3.5
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Installation
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3.5
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Post-installation
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4.2
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In fact, only 14% of ISPs gave the
Bells a passing grade (a 6.5 or above)
2) Do you offer DSL or ADSL?
Yes _______
No ________We tried but stopped because:
No _______ The Bell wholesale pricing
for DSL is not profitable.
No _______ There are no Competitors to use in our area.
No _______ The Bell doesn't offer services in our area.
No_______ The Bell's networks can not support DSL in our
area. (rural areas)
ISPs Who Offer DSL,
2001
57% Offer DSL
71% of those who offer DSL
do it through a CLEC
43% do not offer
DSL,
A little over half (57%) of the
responding US ISPs offer DSL. However, it is clear from this
survey that many ISPs are being blocked from offering DSL,
or have stopped all together for a number of reasons. As the
exhibit below shows, of those that do not offer DSL, the
primary reasons are: 59% of ISPs said that the Bell's
pricing to ISPs does not allow the ISP to earn a profit,
while 35% who do not offer DSL said that there was no
competitive phone company alternative, that the phone
companies' overall treatment of their services was
"sub-standard" in terms of getting installations or that
there were serious problems with the phonelines.
Primary Reasons the ISPs do
Not Offer DSL
- 59% state that they do not
offer because it is unprofitable
- 35% did not have a viable
alternative, or the CLEC went out of
business
- 35% had line problems or
problems with an uncooperative local
company.
Service problems caused by the Bells
can be so bad that the ISP can not offer a quality product.
As one Texas ISP states:
"We tried but stopped because
of installation delays, circuits wired wrong and
circuits that did work but were constantly going down.
Bell was killing our business and giving us a bad
reputation by saying the problem was ours. We had to
pull the plug and asked all customers to find an
alternative."
The harm caused by the Bell companies
means that many ISP customers will not have the ability to
use their ISP for DSL.
"The complexities created and
the poor level of cooperation from our phone company
makes this a losing business proposition. We are not
expanding the business until we see changes that will
allow us to compete fairly."
This dramatically limits the supposed
Broadband future and customers options.
3) If You Provision DSL With A
Competitor, On A Scale Of 1 To 10,
Where Ten Is Excellent, How Would
You Rate The Bells' Part In:
- The DSL Ordering
Process?
- DSL Installation
Process?
- The Post DSL "Up and Running"
Process?
There are two ways an ISP provisions
DSL. The ISP either goes through a competitor, or it resells
the Bell companies' services.
Rating the Bell's Influence on
the DSL Ordering Process
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Competitor
|
Bell Resell
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4.0
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3.4
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The DSL Ordering
Process?
|
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3.4
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3.5
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DSL Installation
Process?
|
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4.3
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3.6
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The Post DSL "Up and Running"
Process?
|
In all cases the Bell's control of the
network causes serious problems for DSL deployment. The
higher scores for competitors indicates that service is
better for the ISPs, but the Bells' control of the network
extends to all service provisioning.
One ISP in Texas explains that even
when using a CLEC, the Bell companies behavior causes
serious problems. There is an obstruction of the competitors
ability to fairly compete for DSL or other
services.
"Horrible. We consistently have
trouble getting lines installed through CLECs if SBC
is involved. It is not exceptional to have a customer
install completely fail on a CLEC because of "Bell
problems" and then to subsequently find out the
customer installed directly with SBC without any
trouble. I have seven years experience as an ISP
ordering lines through SBC and CLECs and there is
absolutely no doubt in my mind that SBC actively
obstructs competition by failing to provide the
services they are required to provide under the 96
Act. This becomes more clear when I compare the effort
needed to install a line only using a CLEC (i.e. the
entire circuit is on the CLEC's network and requires
no work from Bell). In this case, almost without
exception, the lines are installed on time (usually
before time) and without trouble."
This CLEC trouble with the Bells is
also historical and one of the reasons why many CLECs went
out of business--- thus closing down a number of ISPs who
were offering DSL. This Texas ISP states:
"Before Rhythms filed for
Bankruptcy, we provided SDSL service through their
network. Approximately 95% or more of the orders that
were fouled up, held up, or rejected were because of
issues with Bell. A lot of these were rejected because
they had problems with the address on the order.
Sometimes this address would be the same one SWB was
sending bills to for local phone service."
And it is clear that harm to
competition is closing down the DSL market
options.
One Massachusetts ISP
states:
"RBOCs have stymied DSL until
there is no competition. Most DSL providers are dead and
now they (Verizon) will begin to roll it out. They do
roll out where cable is available."
3A) If You Provision DSL Through
Bell/GTE, On A Scale Of 1 To 10, Where Ten Is Excellent, How
Would You Rate The Bells:
- The DSL Ordering
Process?
- DSL Installation
Process?
- The Post DSL "Up and Running"
Process?
Rating the Bell's DSL Resale
to ISPs Ordering Process
- 3.4 The DSL Ordering
Process?
- 3.5 DSL Installation
Process?
- 3.6 The Post DSL "Up and
Running" Process?
The problems with ordering DSL using
the Bells' services seems to be endless.
One Texas ISP states that the Bells'
customer services are:
"Slow, unresponsive, and
unapologetic".
Another Texas ISP finds that the Bell
caused problems for post-DSL support resolution is a painful
ordeal for the ISP and the Customer and believes it is a
result of "strategic incompetence" to drive all DSL business
to the monopoly.
"Ordering is a pain, Installs
take constant monitoring, There is zero post-DSL
support and any problem resolution is a long and
painful ordeal for SBC, ASI, ISP and Customer. Bell
uses their "Strategic Incompetence" to influence any
and all DSL business to SBIS/Prodigy."
One Oregon ISP states that service
installations makes no sense and many times problems are not
fixed the first time.
"Time to install is wildly
variable, errors are randomly approached and often not
fixed on the first or second try. Finding someone who
knows something is hard."
One New Mexico ISP also complains
about the installation, and believes that the process hurts
his customers.
"The order entry process is
extremely difficult to use, requires re-entry of data
over and over again, orders are lost,
prequalifications come in differently for me (always
NO) vs SWBell (always YES). Installations are rarely
if ever on time, and most of the time don't work
without a trouble call, and after the installation
date if it is not working the call has to go to repair
vs installation. When the user has a problem now the
repair call has to go through us vs the user, so we
are constantly caught in the middle. Bell did this
just to piss off our users."
One point needs to be stressed ----
The problems ISPs face are not simply occurring in one state
or one phone company but seems to be a long-standing and
consistent pattern by the entire remaining Bell system. The
same problems are happening across the US. For example, a
New York ISP has experienced "line-stealing", "No
Availability" or "slamming" in New York.
"It's hard to tell who is
really doing what thanks to finger pointing, but
"line-stealing" seems to be the Bells specialty, along
with "no availability" and "slamming".
Or take the case of this California
ISP who took the time to explain the problems with SBC/Pac
Bell California services. For example, "Orders sometimes
don't get processed at all, or are processed incorrectly" or
"Cancellations are commonly not processed, so the customer's
line is not released for them to order other service, plus
they are overbilled."
"The SBC DSL ordering system is
very complex and doesn't interface properly with other
internal systems between PacBell and ASI.
Orders sometimes don't get
processed at all, or are processed incorrectly. An
order will sit in the "automated" ordering system
beyond the due date and never be processed. You only
find out when you go online and read side notes for
the order that the ordering center didn't process it
for some stupid excuse of a reason, or no reason at
all. SBC departments don't communicate.
Personnel within each department
handle each situation differently. Cancellations are
commonly not processed, so the customer's line is not
released for them to order other service, plus they
are overbilled.
Installation runs only slightly
more smoothly. Most of the time the technician will
test only a portion of the line and not confirm that
the line is actually working with either the customer
or the ISP. More often than not, a second technician
will need to be dispatched to properly complete the
process.
Trouble tickets are worse
because the typical turnaround time is 48 hours, and
technicians don't coordinate with the ISP or customer
to gain access to a facility. Often times when calling
ASI to report trouble we are mistakenly transferred to
SBC/Prodigy tech support reps - the supposedly
separate ISP company - our competition, who has
nothing to do with the process and doesn't even
understand what we are talking about. Typically we
have to hang up and redial the ASI tech support number
and hope we get a different person who at least knows
how to take our trouble report rather than pass us off
to the wrong department. The tech support rep can take
20 minutes to answer the call and then can only take
information and assign a ticket number. From there,
the ticket is given to a different department who will
either test or call. Generally you will not receive
the first call back on a ticket for close to 24
hours."
We bring this up in detail because SBC
has applied to enter Long Distance in California, and they
state that their networks are properly open. This ISP has
clearly shown that the California markets are NOT Open to
ISPs.
And for those offering DSL there is a
new wrinkle. SBC has decided to introduce a new tariff,
which would harm ISPs even more and close them out of the
DSL market.
As one Texas ISP put it:
"We are no longer able to add
new DSL services in the SWB area as SWB is trying to
force us to sign a new, unreasonable contract. SWB is
threatening to turn off our existing SWB based DSL
customers after 1/1/02 if we do not sign the new
contract."
To examine some of the details go to
http://www.tispa.org
and examine the issues.
4) Which Of These Statements Best
Describes Your View?
- Service Is Great. I'm
Happy.
- Service Is OK --- Some
Problems, But They Get Fixed Quickly.
- Service Isn't OK: Lots Of
Problems That Do Not Get Resolved Quickly Or
Easily.
- Service Is Terrible
----Continuous Problems And They Cost Our Company
Money And Time.
ISP Rating Their Overall
Services From the Bell Companies, 2001
- 0% Service is great. I'm
happy.
- 18% Service is OK ---
some problems, but they get fixed
quickly
- 34% Service isn't OK, ---
lots of problems
- 36% Service is terrible
--- continuous problems
The overwhelming majority of ISPs
believe that service isn't even OK --- It's downright
terrible. 70% stated they are having lots or continuous
problems costing them money and time, while only 18% stated
that services as "OK". Not one ISP is happy with their
service.
5) If You Could Say Something To A
Regulator Or The Press About The Bells
Impact On Competition And Your
Business, What Would It Be?
New York
"They have destroyed the competition
by pricing, failure to cooperate (obey existing laws and
regulations) and have solidified their advantages with
advertising that should not be subsidized by my phone bill,
and by legal efforts (including lobbying) that telephone
users also pay for".
California
"Take the blinders off. SBC/ Pac Bell
is a monopoly and the citizens of California are the
losers."
Texas
"The FCC is allowing the Bells to
become an UNREGULATED MONOPOLY."
New Mexico--- rural
provider
"We're dealing with a monopoly
mentality. If we desperately need lines in an outlying town,
we can wait for months. Once, we identified phone problems
in Los Alamos. Qwest denied the problems until it became
apparent that 911 was unavailable during peak
periods."
Texas
"I believe Southwestern Bell (SBC)
regularly and deliberately engages in business practices
which are anti-competitive by nature and give an unfair
advantage to their own company."
California
"Our phone company is getting in the
way of progress and innovation for two reasons: 1) They are
choking the internet and innovation created by new companies
to simply protect their old revenue monopolies. 2) They have
set up systems and procedures to insure that the majority of
the market share and captured is controlled by their own
newly created divisions."
Kansas
"The Bell's billing and sales
practices are predatory and unfair, even to their own
agents. They will promise one thing and then do another,
including trying to take your clients. And when they have a
technical problem, they are always first to blame you and
your equipment. They never admit to there being a problem
even though it some times just "mysteriously" goes
away."
Kentucky
"The lack of options results in their
essentially controlling the growth and scope of our ability
to exercise inherent benefits of the free enterprise system
resulting in a much limited scope of offerings we are able
to present to our customers."
Missouri
"Southwestern Bell does not compete
fairly. When customers call SWB to complain about their
phone service, they are told they should be using SWB
Internet or Prodigy, which I believe is against the law.
This happened to me at my home and when I told the operator
she was breaking the law, she quickly changed her
tune."
CLEC--- Nationwide
"They control the competition no
matter what the regulators do. The Bells deny new services
can be provisioned. When they can no longer support that
argument, they delay it in the regulatory process by forcing
the competition, which clearly has less resources, to do
legal battle in that arena. If the Bells lose in the
regulatory arena, they then degrade the probability of any
loss of market share by degrading the implementation of the
new service claiming it is new and their
technicians need time to become familiar with
it. The same does not happen when they introduce new
products of their own. They do not use that excuse with
their large retail customers. They wouldn't get away with
it."
California
"Pac Bell has used "Strategic
Incompetence" and carefully constructed interconnection
hurdles to flatten its competition. Microsoft's monopoly was
achieved fair and square compared to the Bell monopoly. Pac
Bell had their monopoly handed to them by a well intentioned
government in the interest of creating a country wide
communication infrastructure. Pac Bell should be
embarrassed. I guess they just can't get customers when
there is a level playing field."
Texas
"SWB (SBC) is using their monopolistic
powers in the telecom industry to remove competition in the
Internet industry. They are using heavy handed tactics to
force ISP's to sign one-sided contracts. They are forcing us
out of the DSL market."
CLEC Multiple
States.
"We write our largest checks to
monopolists that give us poor service and want to put us out
of business. We have no choice!"
Texas
"The action of the Bell company in
their dealings with us as a partner and a
vendor, are so blatant that I find it impossible that anyone
can perceive these actions in any other way than that they
are purposely sabotaging the businesses of these
partners and customers who are also their
competition."
Oregon---Rural
"Access to copper circuits from the
ILECs which are capable of running XDSL services prohibits
ISPs / Customers from gaining xDSL services, especially in
rural areas where ILEC's do not provide DSL services and the
only options are to access broadband services through an
ISP. Until recently in Oregon, Qwest had an affordable
circuit called a Local Area Data Service LADS, which our
company is using all across Eastern and Central Oregon for
xDSL deployment. We have made substantial investments in
architecture and have taken huge risks to provide xDSL
services at affordable rates. Recently Qwest applied for a
tariff increase on the LADS circuits which will put the cost
for broadband services out of reach for most rural
Oregonians. The Oregon PUC approved their request and new
rates will be effective January 1, 2002. This will have an
adverse effect on our companys broadband deployment as
the demand will decrease due to the price increase of the
LADS circuit. I have sent letters to the PUC, FCC,
legislatures, etc, to no avail. The price increase is a done
deal and our company and rural Oregonians will have to deal
with the impacts of their decision. It is apparent to me
that Qwest is trying to create a monopoly, as are the other
ILECs, and the Oregon PUC is allowing it to happen.
"
California
"They are trying to ensure that they
continue to have a monopolistic stranglehold on the market
and want to see NO competition at all."
Texas
"We are no longer able to add new DSL
services in the SWB area as SWB is trying to force us to
sign a new, unreasonable contract. SWB is threatening to
turn off our existing SWB based DSL customers after 1/1/02
if we do not sign the new contract."
CLEC--Multiple, Rural
States
"The RBOCs (Regional Bell Operating
Company) have succeeded in crushing competition
through:
1. strategic incompetence in
prequalifying and provisioning
2. costly legal and regulatory
battles
3. charging CLEC charges more than
they charge themselves for prequalifying, provisioning and
loops
4. reframing the battlefield as RBOC
against cable - total BS. They no longer can say they are
"open" to competition as they have succeeded in stifling it.
Now they have shifted competition discussion to the cable
and wireless world. Cable is also struggling so I wonder
what their story will be now? "we need monopoly to invest,
trust us we will get it done". Wasn't this the argument for
the Bell System? What did that do to pricing and
innovation?
"The key is whether communications
choice is fundamentally good. They are systematically
eliminating choice for communications in their regions.
Without competition we are back to the slow roll of
innovations and the monopoly pricing and service levels of
the Bell System again. "
Texas
"Dear Sir, I watched the Patriot last
night and it brought to mind my local telephone company. We
are in a war with SBC right now and they have been burning
our women and children alive. It's time to put a stop to
this madness and stand up and fight before they drive this
entire country to its knees!"
Massachusetts
"Take away their monopoly on copper
lines!!"
6) The FCC has been (pick
one)
________ Very Helpful, Very Effective
________ Very Helpful, Not that Effective
________ Not Helpful, Not Effective
________ Terrible and Useless
7) The state regulators (Public Service Commissions) have
been (pick one)
________ Very Helpful, Very Effective
________ Very Helpful, Not that Effective
________ Not Helpful, Not Effective
________ Terrible and Useless
There are a number of government
regulators that control telecommunications. First, there are
the state regulators that are in charge of the local phone
operations. The Federal Communications Commission (FCC) is
supposedly in charge of DSL, since it has been declared an
"interstate" product. However, there are a number of other
government agencies dealing with telecom related subjects,
from the local municipalities, including cities and towns,
to the Department of Justice (DOJ) and Congress, who wrote
the primary legislation governing telecom, the
Telecommunications Act of 1996.
Grades for the Public Service
Commission and FCC's Ability to Enforce the Laws.
|
FCC
|
State
Commission
|
|
|
0%
|
0%
|
Very Helpful, Very
Effective
|
|
16%
|
30%
|
Very Helpful, Not that
Effective
|
|
46%
|
36%
|
Not Helpful, Not
Effective
|
|
38%
|
34%
|
Terrible and
Useless
|
No ISP feels that the State
Commissions or the FCC adequately handle the severe problems
caused by the Bell companies. The FCC leads in the
discontent with 84% stating that the FCC was "Not helpful,
Not effective", or could be downright terrible, while 70%
felt the state Public Service Commissions are not enforcing
the laws.
In the beginning of this report we
quote the President of the Texas ISP Association, TISPA
about his meeting with FCC Commissioner Powell, and a high
level staffer at the FCC Enforcement bureau. From these
meetings, as well as the filings, complaints, meetings, etc
of many other ISPs and CLECs, it is clear that the FCC does
not have either an interest or ability to enforce the
laws.
One Oregon ISP who offers rural
services puts the problems they have encountered on both the
FCC and the Public Service Commission. This ISP is
discussing the price for circuits to provide
broadband:
"The Oregon PUC should have
decreased the price of the LADS circuit to promote
broadband deployment especially where there are ISPs
already utilizing the product to provide the services.
In a world of digital haves and have nots, this
decision will widen the digital divide. The FCC who
wants broadband deployment is to blame, right along
side of the State Public Utility Commissions, for not
having a nationwide tariff for a LADS type
circuit."
8) Pick one (NOTE: The phone
networks are supposed to be 'open to
competition' as a prerequisite to enter long
distance.)
_____ The phone networks are
open.
_____ The phone networks are almost open,
_____ The phone networks are not quite open, but
workable.
_____ The phone networks are essentially closed. --- The
Bell should not be (or have been) allowed into Long
Distance.
The exhibit below summarizes the
Internet Providers' assessment of the Bells' local networks.
The overwhelming majority, 84%, believes that the phone
networks are "essentially closed" and an additional 14%
believe that the phone networks are "not quite
open".
Are the Phone Networks Open,
According to Competitive ISPs?
- 0% The phone networks are
open.
- 2% The phone networks are
almost open,
- 14% The phone networks
are not quite open, but workable.
- 84% The phone networks
are essentially closed.
Most importantly, No ISP believed that
the phone networks are open today! And the majority believes
that the Bells should not have been allowed into long
distance.
This is in direct contradiction to the
FCC's basic finding that the phone networks are open, and
therefore the Bell should be allowed into long distance in
that state.
Considering that Texas, New York,
Massachusetts, and Kansas ISPs all believe that their local
phone networks are not open to competitors, even though
these states have been allowed into long distance, the
findings truly brings into question the FCC's decisions to
authorize the Bells in these states to offer long
distance.
It is also clear from comparing these results to our
previous surveys of New York, Texas, Massachusetts and
Kansas ISPs that these problems have continued to make these
claims before and AFTER the Bells were allowed to offer long
distance.
Notice the consistency of the current
results with our the survey results from September 2000 for
Texas and New York --- In that survey, the overwhelming
majority, 77%, believed that the phone networks are a mess
and that they are almost closed, while an additional 20%
believe that the phone networks are "not quite
open".
Are the Phone Networks Open,
According to Competitive ISPs?
- 77% The phone networks are a
mess, they are almost closed. --- The Bell should
never have been allowed into long
distance
- 20% The phone networks are
not quite open, but workable.
- 3% The phone networks are
almost open,
- 0% The phone networks are
open.
9) What 3 issues are
critical to your business?
A(__________________________________
b)__________________________________
c)__________________________________
A Sample of the Three Major
Issues of ISPs.
- WYOMING
- Calls get through
- Costs Are Reasonable
- Billing is Accurate
- MISSOURI
- Reliable phone service
- DSL that is profitable to us and
not just SWB
- Protection from the
FCC
- TEXAS
- Competitive Access to ILEC and
Cable networks
- Level playing field
- Good, fair, access and rapport
with our PUC
- UTAH
- Quick & easy connectivity
access
- survival of the CLECs
- fair representation and
competition
- MASSACHUSETTS
- Ability to compete
- Enforcement and upholding of the
telecom act
- Verizon's unfair (though tactfully
planned) business practices
- NEW YORK
- Price
- Availability of
Services
- Reliability
The aggregated answers to this open ended question leads to
one clear conclusion --- The ISPs major issues relate
to the same thing all telecom and broadband users need---
reliable service, fair prices, installations on a timely
basis, enforcement of the laws. As competitors, ISPs
obviously also need and deserve protection from the monopoly
so it cannot use its market power to put these dependent
companies out of business.
As one California ISP put
it:
- "Reasonable, competitive pricing,
with correct billing for services from the
Bells."
- "Requiring certain levels of
performance from the Bells, which today provide very poor
service, while they control the infrastructure upon which
the ISPs rely."
- "True equality with the Bells in
the marketplace and/or removing them as
possible competitors in the ISP marketplace due to their
built-in unfair
advantage of owning the infrastructure."
And it is also clear from the
responses to this survey that the ISPs are not getting even
their basic rights properly enforced. In order of
priorities, (based on counting the number of times an ISP
mentioned them.) Literally 93% of important issues for the
ISPs is to protect their current industry. --- With the
discounts and problems caused by the Bell companies being
the largest concern for continuing business. Only 7% of the
ISP responses (based on calculating the total as 100%) made
the cable entry a top issue.
TOP ISSUES TO ISPs
|
22%
|
the price of service to
competitors
|
|
13%
|
the monopoly control of the
networks
|
|
10%
|
anticompetitive
behavior/compliance
|
|
13%
|
Having access to
services
|
|
9%
|
Reliability
|
|
|
9%
|
Timely installs
|
|
7%
|
Access to cable
networks
|
|
6%
|
fair laws and
representation
|
|
6%
|
Billing issues
|
|
5%
|
Survival of the
CLECs
|
The concerns of the ISPs were not
geographically defined, and there was no state or Bell
company that was, overall, found to be better or
worse.
Here are some of the Issues in
detail:
The Price of service
California
"Even playing field. Verizon Retail
and SBC Online both offer DSL at
$29.99. Wholesale says that this is OK because these retail
companies have
signed volume contracts that give them lower prices. We
signed a volume
contract and WE ARE CHARGED $35.00 to $37.00. How is that
fair?"
Texas
"Excessive local access loop charges
for broadband services. Excessive charges for copper
pairs."
Kansas
"Be able to compete (based on price)
with others in the market Be able to make money at the
fair-market rate"
The Monopoly Control of the
Network
California
"We do not own phone lines. We depend
on open access to telephone and DSL lines to be able to be
in business. If SBC is allowed to continue to use its
monopoly control of the last mile of wire to shut us out,
then they will be able to shut us down, as they have closed
most other competitors in California."
Kentucky
"A fair playing field to compete - in
the ISP world I'm now competing with
the monopolies in their own space that give them special
leverage to coerce
customers into signing up."
Anticompetitive
behavior/compliance
Texas:
"SBC is poaching our customers as they
call to inform them of important billing changes on the DSL
portion of the customers bill."
Having access to
services
Texas:
"Access to copper loops that are
served by fiber fed remote terminals"
Reliability
Texas:
"Reliable POTS service. We still don't
have it here."
Timely installations
Oregon:
"Response times to installations and
to repairs is unpredictable and often longer than
needed."
Florida:
"Meeting FOC dates, ordering process
with Bell, anything done on a timely basis."
Texas:
"Delaying our deployment of service.
Failure to work our orders in a timely manner."
Access to cable networks and the
last mile
Texas:
"A fair and open last mile market,
Compliance of the 96 Telecom act by the phone company, fair
access to the cable companies' network."
Fair laws and
representation
California:
"If the regulators do not want to see
the phone company monopoly expanded from local service, to
an overall monopoly on long distance and Internet, then they
must agressively enforce the Telecommunications
Act."
Washington:
"A fair playing field for ISPs and
non-predatory pricing schemes, monopolistic behavior.
Oversight to make sure that these are assured."
Billing issues
Kentucky:
"Accurate billing and timely
resolution of disputes"
Survival of the
CLECs
Texas:
"The continued success of CLEC's for
DSL provisioning in SBC land."
Appendix One:
ALL REPONSES WILL BE KEPT
CONFIDENTIAL
================================================================
ALL INFORMATION IS PROPRIETARY AND WILL ONLY BE USED IN
AGGREGATE.
Company _________________________
Contact _________________________
Contact e-mail _____________________
Check one: ISP ________ or CLEC __________ Both
______________
State (s): __________
NAME OF LOCAL PHONE COMPANY (s)___________________
NAME OF CLEC (s) IF ANY ______________________________
1) On a scale of 1 to ten, where 10 is excellent, how would
you rate your
local Bell phone company.
______ Overall Services from the Bell?
______ The Overall Ordering Process?
______ The Installation Process?
______ The Post "Up and Running" Process?
2) Do you offer DSL or ADSL?
Yes _______
No ________We tried but stopped because ----- Fill in the
Blank____________
No _______ The Bell wholesale pricing for DSL is not
profitable.
No _______ There are no Competitors to use in our area.
No _______ The Bell doesn't offer services in our area.
No_______ The Bell's networks can not support DSL in our
area. (rural areas)
Other_________________________________
3) IF YOU PROVISION DSL with a Competitive CLEC or DLEC on a
scale of 1 to 10, where ten is excellent, how would you rate
the Bells' part in:
______ The DSL Ordering Process?
______ DSL Installation Process?
______ The Post DSL "Up and Running" Process?
Please explain:_________________________
3A) IF YOU PROVISION DSL through Bell on a scale of 1 to 10,
where ten is excellent, how would you rate the Bells:
______ The DSL Ordering Process?
______ DSL Installation Process?
______ The Post DSL "Up and Running" Process?
Please explain:_________________________
4) Which of these statements best describes your view of the
local phone service.
______Service is great. I'm happy.
______Service is OK --- some problems, but they get fixed
quickly
______Service isn't OK, ---- lots of problems that do not
get resolved quickly or easily.
______Service is terrible--continuous problems and they cost
our company money and
time. Please
explain_________________________
5) If you could say something to a regulator or the press
about the Bells impact on competition and your business,
what would it be? Please explain
6) The FCC has been (pick one)
________ Very Helpful, Very Effective
________ Very Helpful, Not that Effective
________ Not Helpful, Not Effective
________ Terrible and Useless
7) The state regulators (Public Service Commissions) have
been (pick one)
________ Very Helpful, Very Effective
________ Very Helpful, Not that Effective
________ Not Helpful, Not Effective
________ Terrible and Useless
8) Pick one (NOTE: The phone networks are supposed to be
'open to
competition' as a prerequisite to enter long distance.)
_____ The phone networks are open.
_____ The phone networks are almost open,
_____ The phone networks are not quite open, but
workable.
_____ The phone networks are essentially closed. --- The
Bell should not be(or have been) allowed into Long Distance.
(The Bells have already been allowed into long distance in
NY, TX, MA, PA, OK, KS to date, and are filing in NJ, CA,
and GA.)
9) What 3 issues are critical to your business.
a______________________________________________
b)______________________________________________
c)______________________________________________
10) NEXT STEPS
Yes _____ NO____ We would entertain the idea of becoming
part of a Class Action
lawsuit on these
issues.
Yes _____ NO_____ We would be
interested in joining a coalition to take legal
actions,
including filing
complaints with state and federal
officials.
DOCUMENTATION: If your firm has filed a law suit, filed a
complaint with the FCC or state commission, or has other
document(s) that are important for other ISPs to examine,
please list the links
==================================================================
APPENDIX Two Survey Results,
Methodology and Sanity Checks.
This survey was independently funded
and was not paid for by any phone company, ISP, CLEC,
association, or any other group.
We believe that this sample is valid
for comparisons with the general ISP population.
Methodology:
This survey was posted during November
2001 via email state ISP associations, numerous ISP
listserves, and other public lists including
'Cybertelecom'.
Results:
This is our third annual ISP and CLEC
Survey. We had 76 respondents, with 20 of them coming from
Texas, 13 from California, 12 from New York, and the rest
from around the country with less than 6 for any other
state. We estimate that the total represents 3% of the total
ISPs, while the Texas, California and New York samples
represents 5-10% of total ISPs in those states. This large
sample in these states is a good indicator that the results
of this survey can be extrapolated throughout the ISP
community because it not only matches identically to the
rest of the country, but it also matches numerous other data
points--- the most important of which are 4 participating
CLECs who currently handle hundreds of ISPs
collectively.
Sanity Checks:
More to the point, our databases for
the previous surveying of New York, Texas, Massachusetts,
Kansas and Missouri over the last year shows a continuous
match. These responses also matched the testimony of the
various CLECs who testified in these states for their 271
applications and therefore gives us a continuous picture of
the marketplace.
And there has been no other survey to
contradict our findings over the last three
years.
Texas and New York Survey,
September 2001
This survey had 49 respondents, 26 for Texas and 23 for New
York. Counting the original NNI ISP survey, a total of 47
ISPs were represented from Texas alone. Therefore, this
survey has representation of approximately 10% of Texas ISPs
and approx. 8-10% of New York ISPs. NNI also interviewed DSL
customers and CLECs, as well as relied on government
information supplied by the FCC and the Department of
Justice. See:
http://newnetworks.com/Putting%20the%20Survey%20into%20Perspective.htm
Massachusetts Survey, October
2000
Covad Communications, which has 26
ISPs listed on their website for Massachusetts alone,
discusses problems that are identical to the ISP responses
in the Massachusetts (and NY and TX) survey. This material
was filed as testimony before the Department of
Telecommunications and Energy (DTE), July, 2000.
http://www.magnet.state.ma.us/dpu/telecom/99-271/CLEC_comments_0700/index.htm
Here is just a sample of Covad's
testimony. It should be obvious, then, that if an ISP is
using a CLEC, the problems the CLEC encounters will also
translate into identical problems for the ISP --- if the
Bell doesn't complete an install, it is the ISP's customer
who isn't receiving their service.
"SUMMARY OF
TESTIMONY
(DTE 99-271, Testimony Of John Berard,
Michael Clancy, And Minda Cutcher On Behalf Of Covad
Communications Company)
- Bell Atlantic fails to complete
office wiring on time;
- Bell Atlantic fails to complete
loop installation work (activities in the field) on time.
A significant number of loop orders require multiple
dispatches
- On average, it takes nearly 40
days for Covad to provide DSL service to its end users.
The primary reason for this long interval is BA-MAs
failure to complete loop installations on time. This
interval starkly contrasts with the interval BA-MA
promises its DSL customers. BA-MA has promised its DSL
customers service in 7-10 days.
"Summary of BAs On-Time
Provisioning. In summary, BA-MA:
- Fails to provide due dates or firm
order commitments ("FOCs") on time
- Fails to complete cross
connections in the central office that connects
Covads equipment to the main distribution frame
where Covad has access to unbundled loops;
- Fails to complete installation
work on the loop after it has left the central
office
- Fails to address certain
facilities problems. has not properly planned and
constructed the facilities as needed, thus causing CLECs
to deny service to their customers."
|