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Summary:

With baseball season winding down, I often am left staring at the World Series of Poker on ESPN. Everytime, I watch the show, it reminds me of the big phone company guys, bluffing and trying to win the mega-billion dollar pot. The favorite trick they tend […]

With baseball season winding down, I often am left staring at the World Series of Poker on ESPN. Everytime, I watch the show, it reminds me of the big phone company guys, bluffing and trying to win the mega-billion dollar pot. The favorite trick they tend to pull is a big article in some major publication, showcasing a little town where they have put fibers. The latest one being in this morning’s New York Times. Most articles are done to impress people. Jeff Jarvis was certainly impressed. The other aspect is turning the heat on FCC and pressuring them into handing over monoplistic control over consumer networks for next 100 years. The Bells have said time and again, FTTH is coming. Reminds me of the Boy who cried wolf. A few things which I might like to add. We as consumers have not much choice in the matter. This high-stakes poker is being played by deep pocketed companies and their lackeys in the government, the House and the Senate. Plain and simple. Our only hope is cable companies, and well in many ways they are lesser of the two evils. The Times article does not really go into the analog problems with FTTH. The high cost of installing the fiber, not the technology but the human costs. Add to mix the problems of getting content – aka television – is not an easy proposition. Disneys of the world will basically squeeze the bells’ cojones so hard, that they would get a serious reality check. David Isenberg’s reponse is even more colorful.

  1. Too bad that in the process of responding to the ‘heat’, the FCC is destroying competitive local phone service. Watch for your local phone rates to rise in the next six months.

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  2. There is another (alternative) Municipal dark fiber builds that open the fiber up as open access to community and commercial operators. The Municipalities with their inherent right-of-way and “men in trucks” are the perfect people to deploy conduit, and dark fiber in the municipality. Finance the conduit and fiber with bonds where there is a match between the lifetime of the asset and the finance source.

    Let commercial (and community) entities fund and manage the short asset life (electronics/optics/services/support) and charge in an open market.

    Its just like roads. Without roads, there would be much much less commerce. They (and fiber) are a common good that can not be built with standard corporate ROI and require ether a monopoly or a municipal builder.

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  3. what competitive phone service?

    Oh, you mean people playing rate arbitrage between below cost wholesale line arates and retail phone rates? Yep, whole lotta innovation there. Even the VOIP regulation/rate arbitrage guys are more technically innovative.

    For some of us, competition means getting more distinct lines run to the home, not just reducing price points for current services by remarketing the lines. The same effect the CLEC have had on phone competition could have been achieved by just reducing the ILECS retail rates.

    The business case for more wires will only be made if the regulatory regime reflects the real costs for networks as well as removes barriers to entry in building new networks. Right now, the wierd market distortions, both at the federal, state, and local levels, make it very unlikely for new wired competitors to emerge to build out new networks in the US.

    Om,
    I think that you are over-stating the barriers and problems of installing FTTH networks – this isn’t any different than overbuilding another MSO HFC plant. FTTH as a technolgy works fine, but no one if going to fund a startup to compete against the MSOs and RBOCs. The record of community owned networks is mixed at best – picking the right technical solution isn’t a strength of governments.

    Getting TV content for FTTH networks isn’t an issue – the content guys are more than willing to license their stuff at the same rates that smaller MSOs get as long as a good DRM solution is in place. In fact, they would like to get additional channel capacity to allow more of their content library to get aired.

    What analog problems with FTTH? What people costs? Could you explain a little more about these issues?

    The Bells are in a hard spot and their cultural limitations are making it harder for them to excape the trap. it isn’t like the MSOs are happily promoting competition either – their anti-community owned network lobbying is immense.

    As always, I enjoy your blog!
    Doc

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  4. Doc, can you drop me a private email and I can answer your question nicely. hey thanks for your kind words and glad to see that I m adding some value

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