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Based on what’s been happening with the California Power Crisis I’m starting to develop the opinion that deregulation and competition don’t actually work very well, when one operator among a group of competitors has to actually build and maintain the infrastructure used to service everyone’s customers.

The facilities-based operator is invariably inept and usually overburdened by the enormous task of maintaining the network. It is usually populated by non-customer-focused TelcoDroids who serve no purpose but to impede access to services for both customers and competitors.

That said, given that they spent 80 years and billions of dollars building that infrastructure, what right does anyone have to come in and just use it to steal away their business with little to no investment at all? Is that fair?

The elephant in the bathroom of this or any utilities industry is that imbalance will always exist — whether it’s grumpy old ILECs impeding the path of progress with their enormously long cycles; or whether it’s young whippersnapper competitors cream-skimming and undercutting prices, doing better marketing, and out-competing the incumbents until their eventual demise due to bad management (creating bad debt and financial write-downs for the grumpy old ILECs). So long as it’s structured the way that both the power and telephone industries are today, these issues will always exist.

So, Ian to the rescue.

Behold a modest proposal for your discussion:

1) nationalize infrastructures – the “last mile” facilities and wiring is purchased by the state for fair, depreciated value. 2) separate operations from management – RBOC facilities management organizations become separate contractors for maintenance of these facilities. 3) level the playing field – the state creates a governing body which oversees access (and, among other things, guarantees service to any dwelling). This body leases access to the facilities for carriers. Equal access is granted to all carriers. 4) build universal interfaces – build secure, IP-based protocol interfaces for things like service and feature activation, provisioning, etc. 5) evolve through consensus – through consortia, competitors steer the industry toward new technologies and guide the state in organizing service rollouts.

This is an organizational model based largely on the technical model for the “opening up” of the telephone network. Without something resembling the former, the latter is never likely to happen.


—— The Tauzin-Dingell Bill: Would it give the Bells ‘Freedom’ to Derail Competition?

It’s hard to keep track of all that goes on up on Capitol Hill these days. But as a player in the telecom sector, there is one bill you’ll want to know about. Put it this way–you NEED to know about The Internet Freedom and Broadband Deployment Act of 2001. If this bill passes both houses of Congress, it could change significantly the face of the telecom industry and have a major impact on your telecom career. So, get the facts and voice your opinion–before it’s too late.

THE BILL Since they were created in the 1984 breakup of AT&T, the Baby Bells have been barred from offering long-distance service within their regions. The Telecommunications Act of 1996 opened the door for the Bells to enter the long-distance business on a state-by-state basis, if they opened their local networks to competitors. The Internet Freedom and Broadband Deployment Act of 2001–offered by House Commerce Committee Chairman Billy Tauzin, R-La., and Rep. John Dingell, D-Mich.–would lift that long distance ban for all Internet and data traffic. It would also relieve the Bells of an obligation to open parts of their local network dedicated for high-speed Internet access to competitors, which is currently dictated by the 1996 act.

THE BEEF Opposition to the Tauzin-Dingell Bill is on the rise as industry analysts examine the effect such legislation could have on today’s already beleaguered telecom sector. If the above-mentioned restrictions are removed, the Bells will be left with little incentive to open their networks. Those who oppose the bill believe its passage would compromise healthy competition.

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