The forbearance provision of the Telecommunications Act of 1996 was put in place to level the playing field between incumbent phone companies, the legacy of the Bell System monopoly, and newer competitors. The incumbents enjoyed a 100 year reign free from competition. They were protected as a government monopoly to ensure that telephone service would flourish and become universally available. That goal has long since been accomplished. One result is that every copper phone line to every home and business was installed and is owned by the local telephone company. That includes not only analog voice lines, but those used to provide last mile connectivity for T1 digital line service.
T1 lines are the mainstay of small and medium businesses who need regulated, reliable voice and data trunk lines for their PBX telephone, point to point connections, and dedicated Internet access. Basic T1 service is provided using two pair of conventional telephone line twisted pair. That's wiring that is already installed to every business nationwide. By bonding T1 lines together, higher bandwidths can be provided to offer fractional DS3 and the newer Ethernet over Copper services.
So why don't competitive carriers just get their own last mile connectivity and bypass the incumbent telcos completely? That's actually starting to happen. XO Communications runs fiber optic lines from its POPs or Points of Presence to nearby office buildings in major cities. They also offer wireless access using early versions of the new WiMAX radio service.
The problem is that building out new facilities, either wired or wireless, is a major undertaking requiring huge capital investments in a highly competitive environment. It will take many years before competitive paths are available with the kind of coverage now in place for the incumbent telephone companies. Consequently, it's not unreasonable to ask that the incumbent facilities put in place under monopoly protection be shared with competing carriers at least until equivalent connectivity can be installed.
It should be noted that the competitive carriers I'm talking about already have their own regional or national fiber optic backbones and network operations centers in place. If you are willing to colocate your equipment at one of their colo facilities or a neutral "carrier hotel," you'll get the best prices on bandwidth possible. It's only within cities where pulling new copper or fiber cable is pricey, or out in the boonies where the cost per mile for new lines is usually unreasonable, that competitive carriers need access to installed telco lines. For that, they pay the local phone company a fair price for the "local loop."
Is this all really important to you as a business owner? You bet it is. One of Verizon's assertions in asking for relief is that competitive carriers are cutting into their wireline business. There's a reason for that. Competitive means competitive pricing, the kind of pricing that has it made it possible for thousands of businesses to establish digital voice and data connections and others to expand their bandwidth at rates they can afford. If we go back to an era of telephone company monopoly, we'll go back to monopoly pricing too.
If you haven't checked the competitive prices for T1, DS3 and Ethernet services lately, you may be in for a shock. The expansion of voice and data network options that's been fostered in a free market environment is nothing short of astounding. Prices of once staid line services have plunged in just the last couple of years. Pull out your current contract and compare it to the results you get from an instant online T1 line service quote. You'll see.
