[IP] more on RBOC vs. RBOC
Delivered-To: dfarber+@xxxxxxxxxxxxxxxxxx
Date: Mon, 19 Apr 2004 04:43:08 -0700
From: Joel Snyder <Joel.Snyder@xxxxxxxxx>
Subject: Re: [IP] RBOC vs. RBOC
To: dave@xxxxxxxxxx
Cc: ip@xxxxxxxxxxxxxx, dan@xxxxxxxxxxxxxxxxxxx
What othes see as a conspiracy not to commit, I see as good business sense.
In our LATA, EVERY SINGLE FACILITIES-BASED CLEC HAS GONE BANKRUPT. That
means that every single company, aside from US West/Qwest, that ran fiber
or copper in Tucson, has been through Chapter 11. All of them. That's GST,
E.Spire, and MCI. All here, all bankrupt.
Now, I'm not going to argue "post hoc, ergo propter hoc," but I can see the
thinking behind this. ILECs know the numbers---they built the first
networks---and they have little incentive to lie or "adjust" those numbers
to get venture capital. These are enormous phone companies with a huge
amount of expertise and knowledge about the economics of building telephony
networks. The Bell System used to employ PhD Economists to help them
understand these kind of things, and this knowledge was not lost.
If they're not rushing out to offer CLEC services in the backyards of their
competitors, perhaps it's not a conspiracy to not compete, but intelligent
decisions about where they can and cannot make money.
One thing that the CLECs taught the ILECs was that "cherry picking" was a
good way to make money. And that strategy HAS led these companies to
compete against each other in high-volume/high-dollar/high-margin markets
such as long distance, Internet, and wireless.
The fact that they're not going after the capital-intensive,
long-long-long-payoff, low margin wireline customer maybe is just
supporting evidence to the argument that certain aspects of telephony form
a natural monopoly in the first place?
jms
--
Joel M Snyder, 1404 East Lind Road, Tucson, AZ, 85719
Phone: +1 520 324 0494 (voice) +1 520 324 0495 (FAX)
jms@xxxxxxxxx http://www.opus1.com/jms Opus One
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