Brand-X, Final Thoughts

At many points in our life, we end up in relationships which are dysfunctional, and mutually destructive. We are well aware that we should put an end to it, but we still hope against hope, that things just might work out. But in real life they don’t. Same is the case with the Brand-X case, and how little ISPs feel about their right to carriage on cable companies networks. They don’t want the status quo to end, but it must. The courts, as in life, decided to pull that trigger, and decided for once and all.

I know folks like Jeff Pulver are might upset at this decision, but lets take a saner view. If you are an American, you know strangely enough, the US Supreme Court did the right thing – they deferred to an agency, in this case FCC, which knows better about a specific industry. It has done so in the past, my legal friends tell me.

Carol Mattey, formerly of the Federal Communications Commission (where she served as deputy chief of the Wireline Competition Bureau) and now a director in the Deloitte & Touche Regulatory Consulting Practice pointed out that when FCC adopted the decision to label cable modem an information service, its intention was to accelerate the facilities based competition. What that means – if you want to sell high speed broadband, you better build your own networks.

But what about the competition and the greater consumer good? “I think there is hope on the part of the commission is that cable companies and phone companies will compete with each other,” she says. I thought about it, and well she does have a point. The two parties are like Kane and Abel, and hate each other. Perhaps they will do strange things, and competition will happen. “It basically means that companies will have to invest in broadband,” says Mattey.

The flip-side is that now companies will have to figure out a way to build their own networks. Fixed Wireless, will finally have a reason to live, and Earthlink, instead of being parasitic will end up owning its own networks, or helping munis build their networks. Entrepreneurial companies will, and must come up with a way to get around this. Hey who knows – maybe someone can finally see the hidden value in the work done by TowerStream and NextWeb. This is actually good news for Covad, which apparently is the only game in town when it comes to facilities based broadband compeittion. I can bet you that phone companies will get their own lobbying efforts going and get the small ISPs thrown off their wires as well.

Owning facilities is the way to go – Craig McCaw figured it out and that is why he is building Clearwire on his own spectrum. I think the Brand-X decision is really bad news for the television companies who I believe are spectrum squatters. They will and should be forced to vacate the spectrum which could be put to better use. Increasingly no one seems to care about the drivel they serve up day in day out. FCC, will fail us if it cannot get the citizens the spectrum they so desperately need to deploy wireless broadband.

But whatever happens in the future, the status quo of Brand-X is over. Lets move on!

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