Sunday, November 11, 2007

Reverse regulation and the race to the bottom

This excerpt from the Jackson, Tennessee Sun once again reveals the real competition between the telcos and cable companies isn't about who can get the most customers with upgraded infrastructure that's able to provide advanced telecommunications and video services. Instead, it's just the opposite in the perverse state of today's wire line telecommunications industry. It's a battle in which the telcos and cable companies compete to serve the narrowest geographical base of potential customers while devising rules to force the other guy to serve the broadest possible base. Call it reverse regulation. In most industries, businesses want regulation that allows them to reach more -- not fewer -- customers. Not in wire line telecommunications, in which the players are engaged in a race not to the top, but to the bottom. (Incidentially, Sen. Ketron is dreaming if he truly believes AT&T plans to roll out its fiber/copper hybrid project U-Verse infrastructure in rural areas. U-Verse is targeted exclusively to select urban/suburban areas.)

By using its existing infrastructure, AT&T could reach smaller rural communities that do not have, and may never have, cable service because of their size, said state Sen. Bill Ketron, R-Murfreesboro. Ketron is the main sponsor of the cable legislation. The bill does not ask for any state funding for AT&T.

"The faster we get broadband into our rural communities, the faster those communities can be connected to the world," Ketron said. "Not only from our children in education in being connected but in providing the economic link to industrial development to those communities."

(Tennessee Cable and Telecommunications Association Executive Director )Briggs argues otherwise.

"They have said they intend to serve 70 communities, and there are over 500 to 600 franchises," Briggs said, "so right there it tells you they do not intend to serve everyone."

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