Select Page

Interesting thesis: Let Them Die.

The authors of the letter (careful, some are on this mailing list) advocate that the FCC (and, I guess, the SEC as well) not attempt to intervene with natural business cycles and to let the telecom companies die, go into bankruptcy, and eventually emerge from the ashes born again as lean, mean, innovative competitors.

The letter seemingly supposes that once the infrastructure is dead, it will go away and be replaced by a very cool IP-centric model where municipalities own the infrastructure and everyone gets fair and equal access to it. But I don’t believe that this is necessarily a natural consequence of the death of the RBOCs, nor could it be easily manipulated by government bodies.

Outdated or not, the Last Mile is an opportunity so long as it’s the only viable path to deliver voice and data services to the customer. For one thing, although these companies will continue to flounder in their weakened condition, there will be investors remaining to pump money into them so long as there is no viable alternative to their monopoly. For another, the further they descend into bankruptcy and failure, the more exposed they will be to purchase by major multinationals which will patch together a monopoly that makes the integrated, pre-1983 AT&T look like a lesson in efficiency.

As long as there’s only one way to deliver voice to every home, office, and farm in the world then the big incumbents will thrive, even in failure.

The onus on the IP Communications industry is not to wait for some impending armageddon, but to develop viable alternatives. It is my contention that the REAL broadband buildout has yet to begin.

-Ian.

Begin forwarded message:

> From: Jeff Pulver
> Date: Tue Oct 22, 2002 4:37:56 AM US/Pacific
> Subject: [PULVER-RPT] Letter to FCC Chairman Powell – October 21, 2002
>
> The Hon. Michael Powell
> Chairman
> Federal Communications Commission
>
> Dear Mr. Chairman:
>
> We thank you for your leadership in FCC efforts to understand the
> causes of
> the current telecom debacle, and especially for convening the FCC’s
> October
> 7, 2002, Telecom Recovery En Banc hearing.
>
> We were dismayed that several of the En Banc speakers confused causes
> with
> effects. We believe that balance sheet weakness, long-haul
> overcapacity,
> and even the recent speculative bubble, are effects, not causes. If we
> attempt to treat the symptoms, we risk missing the causes and
> prolonging
> the agony.
>
> We hold that the primary cause of current telecom troubles is that
> Internet-
> based end-to-end data networking has subsumed (and will subsume) the
> value
> that was formerly embodied in other communications networks. This, in
> turn,
> is causing the immediate obsolescence of the vertically integrated,
> circuit-
> based telephony industry of 127 years vintage. CLEC, IXC and ILEC
> bonds
> used to purchase now-obsolete infrastructure assets have become (or
> inexorably are becoming) bad debt. Weak last- mile competition
> prevents the
> most powerful technological advances from reaching all but a few
> customers;
> this is the largest cause of long-haul over-capacity.
>
> One En Banc participant, NYU Professor Larry White, had views that seem
> consistent with ours. He recommends that we let firms that are failing
> fail
> as quickly as possible. We believe that it would be harmful if
> government
> actions prevent, delay or interrupt this evolution. It must proceed if
> the
> United States is to continue to be a leading contributor to
> communications
> progress, and if its citizens are to benefit from the technologies
> that are
> now available and the applications that they enable.
>
> The telecom debacle is not a cyclical phenomenon. The telephone
> network’s
> technological base, and the business model under which this old
> technology
> thrived, are obsolete. Recovery is not an option. We can only move
> forward;
> how far and how fast will be determined by our continued freedom to
> innovate. Let the United States learn by not duplicating the Japanese
> banking experience in the telecom arena.
>
> We need to see the current situation not as a disaster, but as a
> natural
> event; part of a revolution in productivity and human benefit as big
> as the
> agricultural and industrial revolutions.
>
> Given these views, we urge the FCC to:
>
> Resist at all costs the telephone industry’s calls for bailouts. The
> policy
> should be one of “fast failure.”
> Acknowledge that non-Internet communications equipment, while not yet
> extinct, is economically obsolete and forbear from actions that would
> artificially prolong its use.
> Discourage attempts by incumbent telephone companies to thwart
> municipal,
> publicly-owned and other communications initiatives that don’t fit the
> telephone company business model.
> Accelerate FCC exploration of innovative spectrum use and aggressively
> expand unlicensed spectrum allocation.
> Mr. Chairman, we note with gratitude your impatience with antique
> regulatory structures, and your attempts to embrace new technology.
> Also,
> we acknowledge the burden inherent in the FCC’s duty to ensure the
> continuity of communications, especially basic dial-tone continuity,
> in the
> face of such changes; we are prepared to lend assistance as the FCC
> grapples with this issue. Notwithstanding, we urge you to continue
> against
> the inevitable onslaught of those seeking to preserve an impossible
> status
> quo.
>
> Sincerely,
>
> Izumi Aizu, Asia Network Research
> Jay Batson, CEO, Pingtel
> Robert J. Berger, President, Internet Bandwidth Development, LLC
> Dan Berninger, pulver.com
> Scott Berry, telecommunications consultant, Darien CT
> Michael Bialek, President, InfoComm Inc.
> Scott Bradner, Harvard University
> Richard Campbell, Worcester Polytechnic Institute
> Douglass Carmichael, individual, dougcarmichael.com
> Judi Clark, individual, ManyMedia.com
> Anders Comstedt, Managing Director, Stokab
> Gordon Cook, publisher, The Cook Report on Internet
> Timothy Denton, Internet attorney, tmdenton.com
> Greg Elin, independent software developer
> Tom Evslin, CEO & Chairman, ITXC
> David J. Farber, Moore Professor, University of Pennsylvania
> Bob Frankston, individual, frankston.com
> Dewayne Hendricks, CEO, Dandin Group
> Roxane Googin, editor, High Technology Observer
> Charles W.K. Gritton, President, Broadsword Technologies, Inc.
> David S. Isenberg, Principal Prosultant(sm), isen.com, LLC
> Johna Till Johnson, President, Nemertes Research
> Peter Kaminski, individual, peterkaminski.com
> Shumpei Kumon, Executive Director, GLOCOM
> Bruce Kushnick, Executive Director, New Networks Institute
> Andrew Maffei, individual, Falmouth MA
> Jerry Michalski, sociate.com
> David Newman, President, Network Test Inc.
> Matthew Oristano, former CEO, SpeedChoice, People’s Choice TV
> Mark Petrovic, individual, Pasadena CA
> Jeff Pulver, founder, pulver.com
> Frank R. Robles, CEO, Neopolitan Networks, Inc.
> Charles Rybeck, Managing Director, Benchmarking Partners
> Paul Saffo, individual, pls [at] well [dot] com
> Doc Searls, Senior Editor, Linux Journal
> Clay Shirky, telecommunications consultant, shirky.com
> Porter Stansberry, publisher, Agora Inc.
> Ted Stout, CEO and founder, The ROI Institute
> Brough Turner, CTO and co-founder, NMS Communications
> David Weinberger, co-author, Cluetrain Manifesto
> Kevin Werbach, technology analyst, Supernova Group LLC
>
> October 21, 2002

———–

%d bloggers like this: