Showing posts with label Telco/cable duopoly. Show all posts
Showing posts with label Telco/cable duopoly. Show all posts

Friday, February 12, 2010

Public policy collides with business interests of telco/cable duopoly

According to Oakland, Calif.-based consultant Craig Settles, the Obama administration's stated policy goal of broadband access for all Americans is colliding with the narrower economic interest of the legacy telephone and cable companies. That conflict is playing out within the context of the administration's economic stimulus legislation that was signed into law almost one year ago.

Settles points to an estimated 9,000 challenges and protests the incumbents brought against proposed projects seeking more than $4 billion in infrastructure subsidies set aside in the American Recovery and Reinvestment Act of 2009. The challenges are being raised under a broadband black hole preservation clause in rules two federal agencies wrote to govern allocation of the subsidies that allows incumbents to protest proposed projects on the grounds they already provide advanced telecommunications services in the area proposed to be served.

The telcos and cable companies want to preserve what they regard as their exclusive franchises for a given "service territory" even though their business models don't allow them to construct the infrastructure necessary to bring advanced telecommunications services to all homes and businesses that need (and try to order) them.

This is the crux of the clash between the business interests of the telco/cable duopoly and public policy that will clearly have to be expeditiously resolved by the Obama administration and Congress if the subsidies are to function as intended. As Settles put it in an article appearing earlier this week in USA Today: "We're at a point where it's the general public's interest vs. the entrenched incumbents."

Wednesday, December 02, 2009

Incumbents v. Illinois over proposed broadband stimulus projects

The telco/cable duopoly has gone to battle stations in Illinois, where according to this report in Crain's Chicago Business it's opposing five dozen applications for federal subsidies for broadband telecommunications infrastructure build out including projects proposed by the state of Illinois, Chicago and Cook County. The subsidies are contained in $7.2 billion allocated in the American Recovery and Reinvestment Act signed into law in February.

According to the story, the incumbents contend the projects would overbuild their proprietary cable plants that already provide adequate broadband access. But the Illinois Department of Central Management Services counters that the proposed project areas must rely on leased circuits costing hundreds of dollars per month (such as 1970s era T-1 lines) that are "too costly to achieve statewide 21st-century information and communication capabilities."

Playing the T-1 card? If the state of Illinois has the facts right, this story sheds light on what might be the incumbent telcos' strategy for challenging proposed broadband stimulus projects: simply contending broadband is available most everywhere in developed areas of the United States since anyone can order up a T-1 or higher bandwidth leased line. That's hardly the case when price is taken into account. If this is the linchpin of the incumbent telcos' strategy to shoot down proposed broadband stimulus projects, it's not likely to go over well and will earn the incumbents even greater enmity.

Friday, November 20, 2009

Fighting the future: Telco/cable duopoly resorts to astroturfing to preserve status quo

Here's a key passage from a screed by Tim Karr of Free Press deploring the use of phony grassroots "astroturf" groups by the telco/cable duopoly to cloak its self interested protectionism in populist-sounding righteousness:

On Internet policy, astroturf groups have pocketed millions from industry to fulfill Job No. 1: Lock in incumbent phone and cable companies' control over high-speed Internet connections in America. At present, these companies provide 97 percent of fixed connections into American homes, a status quo they are willing to spend untold sums to maintain.

Thursday, February 26, 2009

Irony abounds in comments by U.S. representative, telco and cable reps on broadband stimulus funding

A highly interesting item appears in today's PC World. It reports on a telephone town hall conversation yesterday between a Tennessee resident and her Congressional representative, Representative Marsha Blackburn (R). It's an encounter to which many U.S. residents will readily relate.

The hapless constituent is stuck on dialup just one mile inside a broadband black hole event horizon. Repeated pleas to an unidentified broadband provider to roll out broadband service produced nothing and the constituent's patience has worn thin.

Blackburn responded by asserting the market would deliver if only more folks in the displeased constituent's neighborhood demanded broadband. Thus, Blackburn reportedly said, the $7.2 billion in subsidies and loan guarantees in the recently enacted federal economic stimulus legislation for broadband deployment to rural and other underserved areas are unnecessary since the market will solve the problem. That's patently incorrect as petitions by residents and small businesses to providers -- so called demand aggregation -- don't convince providers to deploy broadband infrastructure that their proprietary algorithms reject as economically unfeasible.

Ironically enough, Blackburn was disabused of her misapprehension that a competitive market exists in the natural monopoly -- and a duopoly at best -- that is wireline telecommunications service by representatives of two prominent members of the telco/cable duopoly at a panel discussion hosted by the Free State Foundation.

Thomas Tauke, executive vice president for policy at Verizon, pointed to market failure where the costs of providing service go beyond what providers like Verizon are willing to pay. Many of the areas without broadband are "very expensive to reach," PC World quoted Tauke as saying. Accordingly, Tauke added, broadband infrastructure subsidies such as provided in the stimulus legislation are entirely appropriate. The broadband funding in the stimulus measure also drew positive comment from Joseph Waz, senior vice president for external affairs at Comcast, who told the panel its inclusion is "very heartening."

That adds another layer of irony insofar as the big telcos and cablcos have gone on record elsewhere complaining the broadband funding provides little incentive for them to build out their infrastructures, arguing tax breaks would get infrastructure build out faster than grants or loan guarantees. They also object to the open access provisions attached to the stimulus funding.

Monday, December 03, 2007

Telco/cable duopoly an obstacle to information tech progress

The U.S. telco/cable duopoly is getting slammed in articles this week for standing in the way of progress in terms of getting more Americans connected to high speed Internet access.

PC World magazine blasted the big telcos like AT&T and Verizon as among the most anti-tech organizations in America:

The effect of slow broadband speeds and poor availability on tech is obvious. A whole generation of innovative businesses that depend on real broadband is still waiting to come into existence. For now, consumers will have to wait for new, lightning-fast information, media, and telecommunications services that could change the way we work and play.


Tech.Blorge.com, meanwhile, writes that the lack of competition has made big cable player Comcast indifferent to its customers who compete for a static amount of bandwidth over its coaxial cable. Tech.Blorge.com sees Comcast as headed the way of the dinosaurs into tech extinction with the likes of America Online (AOL):

For a short time, Comcast will be able to sit on the customer base it has developed and sap money from customers that could receive better products at a more competitive price. But, just like AOL, once people get a taste of where technology is heading, that pile of money will deplete to nearly nothing…unless Comcast can step up, stop functioning like a monopoly, and start being competive.