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Given its proximity to the Broomfield, Colo., headquarters of Level 3, there’s always a good chance that the Silicon Flatirons telecom conference will get a visit from Jim Crowe, Level 3’s CEO. He made the short drive up Hwy. 36 on Monday afternoon for a well-reasoned talk about long-term trends in communications that had several key takeaways, among them:
- Internet video use is here to stay, and will only increase going forward
- Bundling services with devices is yesterday’s strategy
- Legislators and regulators are right to be concerned about the potential for monopolistic practices by AT&T, Verizon and cable companies
- Net Neutrality violations could be handled better by the FTC than the FCC
According to Crowe, between 60 and 70 percent of the IP backbone provider’s traffic is currently video, a trend that he thinks will only increase, perhaps even substantially should applications like Cisco’s Telepresence take off. “It’s kind of a full employment act” for backbone providers, he joked.
While it’s not too hard to say Internet video will be more popular, Crowe did take a somewhat divergent tack by forseeing a future in which communications services, devices and applications will separate into different markets, much like they already have in the PC arena. The popularity of the tightly bundled iPhone aside, Crowe said that standard interfaces and operating systems for wireless devices will eventually produce more innovation by the best of each market breed, putting bundled plans “on the wrong side of economics.”
On Net Neutrality — a topic practically invented at the Silicon Flatirons conference — Crowe said that when it comes to possible monopoly abuses by the big carriers, “you ought to be worried” since the Bell companies “have a long history of abusing” their facility-based advantages. And while cable companies might have “a far less colorful legal history, competition is not in their DNA,” Crowe said.
However, that doesn’t mean Crowe is in favor of pre-emptive legislation, which most Net Neutrality proponents prefer. Instead, Crowe (like many other speakers at the conference) said abuses could be better monitored by the Federal Trade Commission, under existing anti-trust laws.
“I just think after 10 or 15 years of getting everything they want, consumers will not tolerate” anyone blocking or limiting their access to applications and content, he said. If there are violations, then “anti-trust courts are only a few lawyers away, and may be a lot more efficient than regulatory bodies, who have to react to politics.”
Paul Kapustka, former managing editor for GigaOM, now has his own blog at Sidecut Reports.