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Through their own ineptitude (poor provisioning methods, not enough line crews and installers, poor network maintenance) RBOCs have killed the DSL industry. All of the major DSL Service Providers are now toast.

>From now on, DSL will be a product sold exclusively by the Phone Company
(RBOCs) and its growth will suffer accordingly. RBOCs (in the US especially) don’t know how to market and view consumer data services as an inconvenience rather than an opportunity.

The DSL providers, for their part, made a mistake not really discussed in this article. They failed to pay attention to Ian’s Access vs. Value-Added Services rule, to wit: just because you’re selling them access to the internet doesn’t mean they’re going to come to you for other services. In fact, the whole point of the internet is: once you’re on, you can get your email and your web site hosting and your DNS from anybody.

So in other words, if you’re a DSL provider you’re stuck between a rock and a hard place:

– You’ve got competition springing up everywhere fat with cash in an orgy of VC-backed customer grabbing, which drives down the price people expect to pay for the service – You’ve got a bunch of big, unwieldy RBOCS who provision and manage customer circuits for you, and no matter how good your customer service is you just can’t hide their sloth and ineptitude from the end user – You’ve got huge demand which places burdens on your ability to scale customer service and regional rollouts – You’ve got no conceivable way of turning long-term customers into added revenue

Basically, if you’re a DSL provider you are a largely irrelevant organization to your customers (except when it breaks) and you’re an annoyance to your RBOC partners — you’re a meta-layer in between two hostile parties with no functional purpose in life except to herd the faithful towards a cliff of three-month waiting lists, countless visits to customers’ homes, and Windows 98 setup nightmares.

They might as well have filed for bankruptcy when they finished writing the business plan. In a million years you’d never have caught me dead buying stock in the DSL providers — they were and are doomed to failure.

ISPs and Cable and DSL providers used to think they were Portals (remember @HOME?), acting as a gateway to their customers’ internet experience. They have learned the hard way that in the final analysis they’re just plumbers.

Being a plumber sucks. You do all the heavy lifting, you buy all of the vans and ladders and test equipment; you’re underappreciated and nobody cares about you until something’s broken. RBOCs are excellent plumbers (sort of..) in that they own the circuits and control their own destiny.

Internet Services companies are like Interior Decorators. They have flaky ethereal names like “Amazon” and “Yahoo” and “Google” and they are the ones people talk about at dinner parties. They’re cool but they don’t have much substance, and they don’t fuss around worrying about peoples’ phone lines having too much static.

I haven’t seen anyone yet that has successfully crossed over from one to the other. And it’s impossible to be both, on the internet.

I’m not sure what COVAD and Rhythms and others thought, but there was a time in DSL’s evolution when terms like “customer ownership” and “internet gateway” were bandied about in the same breath as “Broadband”..

That was merely the futile longing for profitability gasping for air. Unlike weaker technologies like WAP, once you give somebody an IP address THEY are in control. They go where they wanna go… And they’ll pick their own interior decorator, thankyouverymuch.

So anyway, back to the point. DSL is now once again exclusive to the RBOCs. They will continue to drag their asses (moreso now that there are fewer cattle prods to move them ahead) while they try to figure out how to exploit the DSL Opportunity (sic). Customers will continue to hate them, adoption of DSL will slow, and Broadband Services will continue to be an oxymoron.

So, my final point for you to ponder: “DSL Is Not The Answer”… Discuss.

-Ian.

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