What America Needs is Choice (and I’m not talking about the election)
September 18, 2008
We have not experienced in 12-years a migration from ILEC dependency by CLECs. The CA 96 was designed to create competition – it has failed. So, do we need other 12-years of status quo? Absolutely not!
What America needs is choice. Choice in true facilities based competition and not the holographic companies that claim they “own” a network.
How will you get true choice? Real competition? You don’t do it by continuing regulations that have not worked. You do not do it by relying on Governments that are only interested in sapping fees from users of any operator’s customers plus the operator. It is time to wake up – you need to do what you need to do and stop relying on the Beltway Broadband Bandits. You do this by leadership and not whining how unfair it is if I don’t get 12 more years of renting. You realize the government is NOT on your side and you figure out your destiny. Prolonging the inevitable only provides the ILECs and cable Companies more opportunity to penetrate with facilities which lock you out of competition.
The Global bandwidth driven economy is passing America up and bandwidth is fast becoming the oil of the 21st century. So let’s keep arguing for the status quo so we can fall behind further.
Yes, the ILECs do not have to share fiber, it’s the law. So why do we sit around and whine about it? A lot of CLECs do whine which is a waste of time and lawyer/lobbyist money. Get over the anger and denial and stop counting on the government. Also, by law, cable companies do not share networks or even rent out pieces like the ILEC is required. I don’t hear too much pissing in the wind about this fact!
Yes, granting forbearance will drive prices up in the short term, as it should. This is called an open market finding competitive equilibrium. The reason we hear; “Oh my costs will go up and my prices will go up” is because the weak CLECs that only compete on price have no value add to offer customers. They don’t have sales people whom are sophisticated enough to sell up the value chain on value and a profitable return. They believe telecom is homogenous and it is all about low price elasticity. Bottom line: being on the ILEC dole so long, some CLECs have become plain lazy. Exactly what the ILEC wants.
As competitive equilibrium is reached in a post-forbearance market and profits realized, then and only then will private investment occur into more local fiber optic infrastructure and access. When investors clearly realize that they can get a return on the capital deployed in this high fixed cost business under a forbearance-granted market, the investment flows. Profits create competition, not the continuance of the telecom welfare state as we know it.
Over 90% of business buildings in this country still do not have cable #2 into their building from a true facilities competitor. It is estimated it would take $125 billion in investment to bring needed fiber to every home and business as entry stakes for Global broadband access. We will not attract new infrastructure investment as long as government regulations make earning a profit a risky undertaking in what is and always has been and will always be, a high fixed cost business for participants of stamina.
Weren’t those 12-years enough time to figure things out?
Shoot me an email or add a comment below.
Written by Dave Rusin - Telecom Executive
Posted by admin | Filed Under American telecom, Forbearance, Telecom Blogs, Telecom USA, Telecom broadband, Telecommunications blogs, Telecommunications industry
(No Ratings Yet)
Loading ...Comments
2 Responses to “What America Needs is Choice (and I’m not talking about the election)”
Got something to say?
Feeds
We get it already. You own fiber. And you want Forbearance. Do you own stock in Corning or something? Why don’t you keynote COMPTEL in 2 weeks with this message? They could use the kick in the pants.
Rob seems to be right.
The idea is good.
Do you believe Verizon would put a “cable #2 into a building” that T already has one?
Who would put another fiber when he/she knows the incumbent will cut the price in half right away – even before the project is finished?