Welcome to Deregulation and “Choice”
September 22, 2009
I wish to apologize for not having written in awhile. This has more to do with mindset – to write something worthwhile, you have to have the focus, frame of mind and decent subject matter.
Certainly, I could write about my trenching project in the backyard yesterday–replacing a 4-inch OD sprinkler pipe that had cracked. What a bitch! I hand dug it out, replaced a pipe section – turned on the water and the sprinkler heads start steaming water.
Success!!! I go to check the hole before back filling – what do I see – water appearing deeper
down the pipeline…Bottom line, I’ll save my next attempt for Columbus Day weekend and this
time I’ll bring in my back hoe. Yes, I own a back hoe! My sprinkler delivery system needs more work.
Or, I could write about playing Candy Land with my nieces and nephews. I believe Candy Land does have certain parallels to the Telecom meltdown (circa 2001-2003) and certain CEO’s.
Maybe the next time I speak at a conference I’ll give away some Candy land games. By the way, when I speak at an event or moderate a panel – I give out prizes!
I have a stack of material on my desk waiting for you, my loyal readers. I just need to be in the proper state-of-mind to make it interesting, insightful and entertaining. Otherwise, why bother?
As an aside, I live in upstate New York (the part of New York State with honest, ethical, moral people – not to be confused with the down state Wall Street Real Smart guys et al). In upstate, we try to grow businesses the old fashioned way: by actually growing them. We have less interest in growing businesses on PowerPoint’s and spreadsheets. Call us backwards, but we are what we are — people who deliver results that prefer clarity of truth to rhetoric, deal making frenzy or word parsing. We like sustainable businesses.
So there I was, driving along in Upstate New York, thinking about all the useless blogs out there, and listening to the radio. The host talked about a Spanish Company that bought out all the electric and gas companies in New York State a few years back (with the exception of down state utilities) and this company just announced a 16% price increase for electric and gas services (ubiquitous commodities). Even though the ubiquitous commodity prices for the electric and gas have stayed relatively flat for the past 6 years, the increase is due to the ongoing costs to maintain the INFRASTRUCTURE and associated labor to do so.
So, what is my point? Bandwidth is not ubiquitous–or at least bandwidth that provides speeds
greater than our Federal standards of 768 kilobits.
Some call bandwidth a commodity. I do not.
I can’t store bandwidth like corn or pork bellies, yet somehow bandwidth is a commodity.
Remember Enron? They actually had this bandwidth trading scam going on back then where actual idiots bought future contracts in something that is only consumed in real time and can’t be warehoused. It was not the first time I have witnessed stupid money in Telecom! (Trust me – it’s still out there … just had a meeting last week with a …)
Anyhow, today’s game is about INFRASTRUCTURE … bandwidth will never be a plentiful, a
ubiquitous commodity of low price desire until such a time that the appropriate INFRASTRUCTURE is in place. The greatest challenge to buyers of bandwidth, similar to the healthcare debate, is not about the service itself. It’s about clearly understanding the delivery system. Typically, a delivery system is what drives costs up or inefficiencies. So whether its bandwidth or healthcare, it is all about the delivery system first – in Telecom the delivery system is what the ignorant refer to as dumb pipes.
I wrote a white paper on this subject a few year back – something about Clouds — you can get
a copy by clicking here.
No gas lines – no gas. No electric distribution lines – no electricity. Get my drift? Our nation
has not made telecom INFRASTRUCTURE a priority. Many times, our friends in the beltway
have the cart before the horse…which only results in a waste of private and/or public capital.
So here is the deal: existing tower and fiber optic infrastructure is more valuable as the delivery system than the applications today and in the foreseeable future. The commodity to be bought is not bandwidth–it should be network reliability, which delivers scalable optical bandwidth. The last time I checked, network reliability is not a commodity. Low prices are great until your carrier’s network fails and interrupts your life or business. As I have often said, in Telecom, you get what you pay for. Welcome to deregulation and “choice” under the Communications Act of 1996.
We (America) are early in the cycle of bandwidth manifest destiny; we are also behind many
parts of the world. Keeping in mind our friends at the Electric & Gas Company – we are not
only lacking the INFRASTRUCTURE but also what is already in place never becomes cheaper to build, maintain, relocate or install. Materials, labor and government regulations go up every year as an ongoing operating and capital cost. This is the reality of dumb pipes that some think should be free to access or bought for pennies on the dollar.
So that’s my ramble for today, because they are raising my electric and gas rates. It is incumbent upon the buyer of communications services to clearly investigate, understand and scrutinize the underlying delivery system. If you do this in Telecom and healthcare, we can solve two problems at once.
Don’t make price your only point of any decision – you will get what you pay for. You will not
get what you thought you paid for on price alone. In the case of evolving telecoms in America, the network reliability delivery system is everything and we still need to build it before we do anything else.
Posted by admin | Filed Under American telecom, Telecommunications industry
(No Ratings Yet)
Loading ...Comments
Got something to say?
Feeds
