One Big Yawn
July 14, 2009
The most prominent headline this week is the Department of Justice looking into anti-trust violations because large (non-dominant) wireless carriers entered into exclusive agreements on cell phone devices. America has ADHD and usually comes to some type of conclusion after reading just the headline. In this case, anti-trust investigating will not focus on how the wire line ILECs are screwing with competitors, bids, E-rate abuse, tax loop holes, etc. It’s about cell phone device exclusivity deals.
This antitrust initiative, my dear readers, is going nowhere. I give it a big yawn.
Isn’t it ironic though? On one hand, the DOJ is clamoring anti-trust against the large wireless carriers for being too big (too big to fail???) while on the other hand, our Treasury and the Congress are working feverishly to nationalize (aka “make big”) our banking system (too big to fail??). What sweet irony! Pure Beltway magic – Walt Disney is blushing.
A new telecom super hero organization has popped up in the headlines seeking justice against those bad actors, the ILECs. The NoChokePoints Coalition (www.nochokepoints.org) is leading the charge to have the government redress the inequities of special access service pricing from the ILECs. Translated: we don’t want to actually spend capital on infrastructure of our own or alternative carriers, but we want the ILECs infrastructure for cheap – legacy infrastructure at that!
To call it straight, this is the same old tired arguments previously made before the FCC against the ILECs resulting in a lot of lawerying and lobbying only to eventually, once again, have a Federal Court rule in favor of the ILEC under the law. In particular, the Communications Act of 1996.
Ever watch a dog chase its tail? It’s sad. The dog is really suffering from a psychosis.
I have written about this before and will summarize it again here: It has been 13-years since CA 1996 was enacted, I am sorry that in, 13-years, certain CLECs have not figured out or invested into getting off Ma Bells teat. What more do you want, another 13-years to figure things out?
I am glad, in the short term, that you played the arbitrage to grow a top line. However, margin growth and profits do matter in the long run. And you are not going to get margin growth riding on the back of Ma Bell … plain and simple. The ILEC controls your costs if you rent from them … they are not your friend.
Banking on change in the Beltway due to the elections? Relying on the government? Trusting the government to lower your costs after 13-years? All I can say about trusting the government – go ask an American Indian.
There are transport options available beyond Ma Bell–you just need to pay the going rate. Don’t be hypocritical, complaining on one side that special access prices are too high, while telling alternative providers unless you price below Ma Bell, you are not an option. Instead of viewing short term interests, pay the going rate with a non-Ma Bell transport provider so they can build out even more facilities you can take advantage of. Stop plowing cash for special access into Ma Bell who is taking your money and building out fiber optic transport and access that you legally have no access to directly which is also increasing the ILECs competitive advantage over you daily.
All due respect to the members and concept of our new super hero, NoChokePoints Coalition, but this is one big yawn.
Ultimately, the ILECs will see the FCC in court and history will repeat itself. The dog is chasing its tail again.
Written by Dave Rusin - Telecom Executive
Posted by wbrache | Filed Under American telecom, Corruption in America, Telecom USA, Telecom bloggers, Telecom broadband, Telecom news, Telecommunications industry
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