AG Schnozz wrote:
> OK, I've got to pipe in on this one. I work for a dreaded
> telecom and actually deal with the issues of network costing as
> a major part of my job.
>
> [technical/business explanation of telcos snipped]
I'm glad to see you weigh in on this one, Ken. I stand corrected on a
number of my points but I still don't agree with the telco business
model as outlined by Whitacre, Smith, and Seidenberg.
I mean, I understand that switches and towers are not installed
overnight and that there is a substantial capital investment needed. But
none of this is new to the telcos.
I read up on Whitacre's and Seidenberg's comments. AT&T/SBC and Verizon
already charge its residential and small-business customers for access
to the Internet. I'm sure they're also selling high-capacity access to
business and other organizations in their service area. So I'm not sure
who is getting the free ride here. As the Googles and Vonages increase
the offerings which demand broadband, they're paying more for their
access. And customers may decide to upgrade to (a higher level of) DSL.
If the telcos are not charging enough to cover their costs, though, they
have a business problem.
I understand that regulation, which served the Bells quite well years
ago, is now shackling telcos to some extent, and I think it's fair to
level the playing field now that cable/media companies are offering
similar services. I'm not sure total deregulation of both telcos and
cable companies is the answer; my experience is that the market alone
does not support the efficient choice of technologies. OTOH, perhaps the
success of cellular networks and cable is an indication that "five
nines" of reliability no longer is a requirement for most customers.
Moving to a deregulated world, though, will require capital investments
just for the telcos to catch up to some of the offerings from the
cable/media companies. This isn't going to improve the bottom line for
telephone companies any time soon, I don't think.
In the meantime, though, destroying the network neutrality that built
the Internet into what it is today by allowing telcos to control who
gets served first is , IMHO, a bad idea. It might bump bottom lines
short-term. But it could very well kill the Internet.
Steve
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