Saturday, December 08, 2012

Telecom coops offer much needed alternative to build out U.S. Internet infrastructure

This Wall Street Journal article explores the Faustian bargain AT&T, America's largest wireline telecom provider, struck with the U.S. Federal Communications Commission to begin winding down its obsolete copper Publicly Switched Telephone Network (PSTN):
Mr. Stephenson himself has made it clear that AT&T would rather just sell off its regulated phone territories the way rival Verizon has done. But those sales haven't worked out swimmingly for the buyers, so now buyers can't be found, and neither would regulators likely bless further sales.  AT&T's plan, then, amounts to a compromise: AT&T will spend several billion dollars making undesirable investments if Washington will relieve it of the unsustainable regulatory burdens associated with the old copper voice network.
This is not an optimal solution for either AT&T's shareholders or for the many Americans who despite AT&T's expansion plans would remain disconnected from the Internet and the Voice Over Internet Protocol (VOIP) service it could provide to replace voice telephone service delivered over the nation's aging copper Publicly Switched Telephone Network (PSTN).  An alternative is clearly needed.

The good news is one exists as does its funding mechanism: cooperatives.  In the 1930s, the U.S. Department of Agriculture's Rural Utilities Service (RUS) made funding available to coops to build the needed infrastructure to deliver electric power and phone service.  The RUS remains in place today.  Given the problems investor-owned telcos like AT&T face deploying needed Internet infrastructure as shown in the WSJ story, the RUS should be given a higher profile and adequately funded to facilitate the much needed telecom coop alternative for the construction and operation of Internet infrastructure.

1 comment:

InfoStack said...

It's dangerous to call Coops a success as they were monopolies sustained by artificial and questionable subsidies.

A hybrid, horizontally oriented model that can scale rapidly changing technologies in the lower layers of the stack across rapidly growing and evolving upper layer applications and demand is what is necessary.

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