ftth, two enlightening articles from the IEEE Spectrum, thanks.
The second of the two, "Electricity Troubles in California: Who's Next?" prompted me to once again reflect on the parallels that could be in store for us in the bandwidth space, once we're beyond commoditization, and once spot rates begin to take hold. And once we are beyond the pending consolidations and shakeouts that lie just around the corner. And once the next wave of tsunami-like multimedia and industrial-grade applications that are now being developed, at last! - because now there surely is enough bandwidth to support them;) - are unleashed upon a for-the-most-part clueless service provider community.
Thus far I have failed to adequately envisage a precise scenario, but somewhere in the background there is a link, and that I feel almost certain of.
Allow me to parody an excerpt from the MIT article you posted, and let's see where it takes us.
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Regulation in today's telecommunications industry is a combination of the old and the new. Under the old regulatory rules, prices to the consumer are based on suppliers' costs plus a set rate of return. In contrast, the new regulatory rules are uncertain and inconsistent.
For example, only transparent optical system operators--those using new state of the art wavelength routing plants or old platforms that have been divested by the telcos --are allowed to compete.
Carriers that still own transmission systems based on sub-terabit capabilities are subject to a variety of makeshift rules intended to prevent them from influencing bandwidth prices. They may not, for instance, peer with the terabits, or provide transiting services to their customers, but must sell their bandwidth to, and buy it back from, the regional spot market.
Thus, to sell bandwidth, they are required to bid into the daily spot market strictly at their production cost. Nor may they establish long-term bilateral contracts with groups of users, but must purchase suplemental bandwidth daily on behalf of their customers under the old "obligation to serve" rubric, regardless of the prevailing price and what it will cost them.
"Wire" companies--those that transmit traditional forms of voice and data services over long distances and distribute it locally--are separate remnants of the divested entities and remain fully regulated. There are no regulatory or market mechanisms under which they may offer services based on their value to the consumer.
Possibly the most damaging regulation is on the customer side. In both California and Massachusetts, legislation was passed several years ago meant to help establish retail competition: each user would eventually choose a bandwidth provider --but not right away. To ease the transition to retail competition, the legislation created a grace period during which a "standard offer"--representing, in effect, a compromise--would protect both carriers and consumers. Carriers would be forgiven their debt on Cable Modem, DSL, certain forms of SONET and other transport modes that were no longer competitive, while bandwidth users would be guaranteed that prices would go no higher than preset caps for several years to come.
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Sound remotely plausible? Well, I think it's a beginning. Anyone care to add to, or refute, the notion that what is good for the electron is also good for the photon?
FAC |
