Elections: Too late for telecom


If you have been reading my blog for a while, then you know I have little or no faith in FCC and its ability to put consumer interests first. Things are unlikely to change, whosoever gets elected tonight. FCC and the regulatory authorities have little in common with consumer needs. Just to bring up a few old points, most of the critical telecom decisions have already be taken. FCC is completely in favor of Regional Bells, and has killed UNE-P. It has approved the Cingular Wireless and AT&T Wireless merger without even a whimper. And if that was not enough, the FCC has gifted the Bells with completely monopoly over FTTH and FTTC, making lame excuses that WiMAX and BPL will be worthy competitors. Nextel’s spectrum swap has passed even without a whimper. I guess Verizon decided to shut-up because they got all the fiber they could eat. AT&T and MCI, have been put on a slippery slope to nowhere. (AT&T hopes that its IP-makeover will save the company, and I think it is possible!) Michael Powell has served the republican puppet masters, aka political contributors quite well, passing himself off successfully as “one of the little people.” When the political dust settles, there will be changes at the FCC: no doubt about. VoIP, universal service fund and inter-carrier compensation issues – commonly referred to as Politically Charged Subjects – will be left alone. On more specific stocks, Merrill Lynch believes that a John Kerry victory would mean a 15% dividend tax, and that’s not good for some higher dividend yielding telecom stocks, including Citizens, AT&T, SBC, BellSouth and Verizon. 


john mcclenny


Om isn’t a dimwit, just one of those people who believe that the competition should be at the end points of the network, not at the wires to the edge.

This means that we have price competition by allowing companies to leach off of existing infrastructure instead of investing to add new infrastructure. This doesn’t mean that we have much in the way of new services or service options, just slightly lower prices and much reduced profits, preventing any new wires from being built.

I believe that the competion should be at the new wire level, with multiple sources of broadband connectivity, either wired or wireless. Forcing connectivity supplier to sublet their investment at preset rates removes any incentive to invest. The recent FCC rulings reducing the RBOCs sharing requirements is leading to massive new investment and real triple play competition for the MSOs for the first time.


Om – You are a dimwit. To force the incumbents to serve up their infrastructure for those that want something for nothing (CLEC’s) is ridiculous. There is nothing preventing them from laying their own fiber/infrastructure – but guess what – they don’t have a business case. Why should the incumbents give up their infrastrcture for those without the cash? It is like forcing McDonalds to sell Burger King Whoppers because they can’t afford to build a store across the street…

Charlie Sierra

If one is confined to the limited scope of the FCC and Telecom then, I agree. But not without the acknowledgement that the real MASTERS of the FCC is the Broadcast TV industry.

So from a taxpayer perspective the telco’s are amatuers, since they actually ponied up ten’s of billions of dollars, and the Broadcasters enjoy a magical carpet ride.

The showdown between these two industries will be fun to watch.

Who will co-opt who?

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