Sunday, May 09, 2010

Economic development goals pit local goverments against legacy telcos, cable companies

Local government economic development agendas are clashing with investor-owed legacy telcos and cable companies in North Carolina as the Associated Press reports in this item appearing in The Daily Reflector.

The locals want fiber optic-based infrastructure to attract employers and create jobs. The business models of the incumbent telco and cable companies preclude them from profitably providing it. But rather than accept that business reality and seek more profitable business ventures, they've engaged in disinformation by declaring telecom infrastructure -- a natural monopoly -- as a competitive market. Therefore, they've argued to North Carolina lawmakers, local governments should get voter approval before issuing bonds to cover the cost of municipally owned telecom infrastructure in order to level the "competitive" playing field.

That sounds reasonable on its face. But the incumbent agenda isn't driven by public interest by ensuring prudent expenditure of public funds. It's a self interested one aimed at introducing delay. Unfortunately for the incumbent investor-owned providers, that merely adds costs and does nothing to increase profits. That could depress their share values and potentially leave them open to shareholder lawsuits.

2 comments:

Christopher Mitchell said...

Don't forget the highly inaccurate maps produced by Connected Nation that some lawmakers use to suggest the status quo is fine.

Fred Pilot said...

Mapping itself is nothing but a diversionary PR ploy concocted by organizations such as this. One only creates a map to plan the deployment of telecom infrastructure. Here, the goal was the create a map just for the sake of creating a map-- to nowhere.

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