A Response To: "Light at the End of the Telecom Tunnel"

Read This First ---------> Editorial Link

James,

Having worked as a Telecom consultant I have mixed feelings about the editorial "Light at the End of the Telecom Tunnel". I do agree that in order for their to be incentives to move forward with technology, other companies must build their own networks and put forth new technologies. The problem is that NONE of these companies, save Cable and the Bells, own the copper to the home. That has ALWAYS been the problem; the so-called "last mile". Because the copper, in either twisted pair or cable form, is owned by what amounts to regulated monopolies, although less so now, they can sit back on their assets that were accumulated via tax money and income that was received when they were the only game in town. The other companies are left to find private capital for their own ideas and technologies. While switching gear is readily available, it doesn't come cheap and it's technology and approach dependent. This means that if one chooses to go with a new company they will be a slave to their technology with no guarantees as to the long-term worthiness of the technology. Furthermore, because most cannot understand the difference, they will have a hard time making an informed decision.

In the end this means that if we are lucky and capital is made available to the competitors of the Bells, Comcast's and the like, we will have a flourish of competing technologies that the consumer will have to choose from. The reality is, that no matter what, the consumer will have to pay for new equipment and will have to choose the type of service (VoIP, Cable Digital, DSL, Wireless, etc) they want. Basically, costs of startup and competition will be passed onto the consumer with little or no guarantee that the technology chosen will make it through the inevitable shakeout that will follow. This can have a dubious effect on those who do not have the disposable income to move forward and must rely on the old systems that will become more costly to maintain and consequently more costly to use and those costs will most assuredly be passed on to the consumer.

So, the outlook is muddled at best and is hardly as clear-cut as the "Free Market Always Wins" outlook of your editorial and the Cato Institute et al. The free market is probably the best thing going, but it can be painful. But, the pain is different when you are talking about a product or service that has grown to be essential in everyday life. We aren't talking microwaves or televisions here. I think it's one of the government's jobs, on all levels, to protect the average consumer from excessive pain caused by free market forces. It's essential that governments do this or we will end up with a populace that is angry and wants more regulation than is probably necessary or good. So, I think a little forethought will save us from a lot of future knee-jerking. The question isn't one of either regulation or no regulation, it's about what regulations or amount of regulation can we implement that will protect the consumer from the enormous potential costs and technology fluctuations of future telecommunications while allowing competition to flourish and provide a better product.