Originally published February 24, 2003

SBC squeezes out the little guy

SBC Communications, a company that has long sought a piece of California's $10-billion-a-year long-distance telephone market, finally realized their goal last December when the FCC approved their long distance carrier application. Approval was contingent upon SBC demonstrating that it had opened its network to competitors, including Internet Services Providers reselling SBC DSL service. While regulators were apparently convinced of SBC's goodwill, this has not played out for one local ISP.

InReach Internet has been effectively squeezed out of the SBC DSL business by SBC's termination of their Internet Access Services Program (IASP). Two days after receiving FCC approval for long distance service, SBC restructured their DSL offerings to ISPs in such a manner that was most unfavorable to continued business. Additionally, SBC has aggressively gone into direct competition with regional ISPs with it's own brand of DSL service, SBC Yahoo! DSL, hoping to undercut the competition.

As a consequence, InReach has elected to terminate its relationship with SBC effective February 28 and transfer its SBC DSL customers to Sonic.net. As a longtime InReach customer, this news was disappointing. Since their inception in 1995, I've enjoyed consistently high quality and reasonably priced Internet services through this regional ISP. The value of service from an independent provider such as InReach over a bulk provider like SBC is incomparable. You may pay slightly more for regional ISP service but the difference in service is well worth the premium.

InReach will continue, however, as a viable Internet Services Provider, serving both dial-up and new DSL customers -- they just won't be reselling SBC DSL. "It was strictly a business decision," according to InReach President, Lisa Bickford. "InReach has tried unsuccessfully since September 1999 to create a viable business relationship with Pacific Bell, SBC and SBC/ASI to little avail."

Despite regulatory obligations, it would appear the SBC is moving in a monopolistic direction with little interest in the success of independent ISPs. "They have no desire to foster competition or create a system which might allow a competitive choice for consumers in California. We feel that there is no further opportunity for us to succeed when faced with a system that favors the monopoly over the consumer and small business."

InReach will offer new customers DSL services through Covad and New Edge DSL services. Both these companies are exempt from the restrictions imposed on InReach because they are Competitive Local Exchange Carriers. Regulations that govern these entities are complex and without a prolonged discourse on DSLAMs, T-3s and end-user loops, suffice it to say that Covad and New Edge are not as hamstringed by SBC because of their CLEC status.

Sonic.net will take over InReach's 530 SBC DSL accounts on March 3. As an SBC DSL reseller, the transition will be transparent to the affected InReach accounts. "We wanted a solution that was the least painful for our existing customers," according to Bickford. Sonic's president Dane Jasper assured me that I could rely on the same first-class service provided by InReach. Most customers will actually see a slight decrease in the cost of their DSL service through Sonic and will receive added services, such as additional static IP addresses and email accounts. Sonic customers receive nationwide dialup access as well, for network connectivity while traveling.

As an independent ISP, Jasper is also concerned with SBC's apparent lack of regard for the regional provider, but because Sonic deals with a much higher volume of DSL accounts than InReach, they are more sustainable within the changing SBC structure.

Cathi Schuler is an Assistant Professor for the School of Engineering and Computer Science at the University of the Pacific. She also owns a business software training company, CeePrompt!  cschuler@uop.edu or cschuler@ceeprompt.com or by mail c/o The Record, P.O. Box 900, Stockton, CA 95201. She is on the Internet at: http://www.ceeprompt.com. Click here for past archived columns.  


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