Hi, Frank. ATT and the ILEC's are certainly on the way to having competition, but they're not there yet.
First, I think the topic has to be the total communication/media delivery sectors. Internet Access is one part of that, and certainly seems to be the battleground today, but since Internet Access is dependent on the local phone line, the POTS provider has a built-in advantage. As does ATT as the established name, and the overwhelming heavyweight in the retail long distance space.
I will agree that ATT's advantage is diminishing, at least here in NJ. ATT now sends us a separate bill, where we used to be included in the BEL bill. And, ATT seems bent on shooting itself in the foot, with moves like its recent one to increase LD charges by 80% for some low-usage retail customers, according to the news reports. (I don't know if the news reports are correct--the fact that ATT stepped into the proverbial PR poop was the mistake).
Two competitors in a space does not make for very good competition, imo. The fixed cost issue will eventually lead one to become dominant. Assuming the ILEC's can develop delivery of cable signals over their plant, they "should" be the winners eventually, if another technology doesn't overtake them. Their legacy of delivering reliable POTS service, which often remains on when the power goes out, gives them terrific customer relations. [Now, if they could just get their internet access to be as reliable . . . but that's another issue].
In a couple of years we'll see the onset of both Ka-band satellite service and HDR-type wireless. Both promise faster internet access than most homes are getting today. At that point we'll be able to choose from any number of providers, over any of several transmission methods. That should be real competition.
In our area, btw, we have just one method of gaining internet access. We don't have multiple MSO's, and the MSO that we do have hasn't upgraded to be able to offer internet access. All access is through the BEL local CO, whether we want to use them or AOL or Earthlink. That means, if they don't offer it, it's not going to be available from anyone, I think. For instance, big portions of Glen Rock don't have DSL available. They're stuck paying ridiculous prices for ISDN.
In case you aren't reading between the lines here: I think it's absurd that BEL is considered by our state utility commission, and by the FCC, to be competitive in the local market. Their monopoly in local POTS makes them the provider of choice for DSL service, and probably for long distance service, if only to cut down on the number of bills we have to pay each month.
When the BEL CO can be bypassed, then we'll have competition. That probably means we'll have to wait for the wireless and sat alternatives.
btw, I don't see the FBBW players having a ubiquitous role here. Their cost structures and pricing seem out of whack, for the suburbs, and the present equipment, relying on line of sight, is too limiting. They will be constrained to urban installations.
You asked one pair of related questions: "would you have the open access rules apply to the longest standing incumbents in each media group (the so called "dominant ones," only? Or, should the evolving rules of open access apply to all purveyors in this space, new and old, regardless of medium that they support, alike?"
This will sort itself out in the next several years, as wireless providers become able to compete on an even footing with the ILEC's in terms of access speed and cost structures. I think that (ahem!) Gilder is correct that the cellular providers may take away entirely the ILECs' markets in areas where cellular is available. unless the ILECs can get more nimble. The cellular providers will provide a level of competition that the present DSL competition, for instance, cannot match, in terms of financial strength and organizational depth. Once there are truly viable alternatives in place, all open access rules should be dropped.
In the meantime, we can only hope for a semblance of competition. And that probably means open access for the incumbent telco.
PS--I'm amazed that SAP can remain in business. I've yet to hear of a truly smooth installation, and I've heard of several companies whose financial results were severely impacted by SAP-related problems. Their word-of-mouth has to be awful. Why would anyone contract with them? Beats me. |
