Steve,
Your reply contains ample nourishment for debate as it contains the roots of some arguable principles and tenets that we are beginning to face, or will be facing very soon.
The main issues being, IMO,
(1) the stalling tactics used by the incumbents due to their apparent lack of readiness to compete, and
(2) usage based pricing.
>>Are we surprised that the traditional LEC's approach is "If you can't compete with it, either tariff it to death or get the government to regulate it to death and claim that you are the injured party??<<
That part of your reply speaks for itself. All is fair in love and war, they say, and constitutional lawyers need not apply for work in this venue.
You hear a lot of talk about the turning radii of an aircraft carriers these days, but I think that the hesitation we're seeing here on the part of the ILECs has a lot more to do with deliberate actions and strategies, than they do for any reasons stemming from the intrinsic laws of physics which affect navigation and seamanship.
I've known a few autonomously managed initiatives within the Bell regime that had the spirit and fleetness of foot of entrepreneurial enterprises when it came to getting things done. And I am also aware of the invisible ceilings that these folks hit when they are successful, when their successes reach noticeable proportions to the point that they begin to stand out and threaten the status quo of the remainder of the organization.
Contrary to popular views and sentiments about the incumbents, I sometimes am reminded of certain experiences I've had in my career, and tend to take a different view (albeit, not a very exciting or popular one, at times, much like being forced to read the Gallic Wars in native, unfinished Latin) because I've had the opportunity to view the dynamics at work from several vantage points that are not readily apparent to outsiders.
In bravery to flames and retorts, I must state that the telcos have certain fiscal responsibilities both to their stockholders and to the public at large, since they are in many ways still the trustees of public welfare, something that upstarts haven't the slightest notion of, much less an obligation to perpetuate. This, too, over time, will disintegrate with diversity, but it's still the case today.
Secondly, they must by definition and charter apply their deployment strategies across the board, or at least have a plan to do so, which relegates their project scaling challenges on a par with an Herculean undertaking, if done in a timely and relevant way, in comparison to the pick-and-choose day-to-days of the startups.
This last area is one in which creating separate Data-CLEC-like subsidiaries within the ILECs may put an end to, if it goes through in a way that some of the regulators have recently suggested.
IOW, if ILECs are forced to compete on the basis of structurally separated autonomous units that supply Internet Access, say, then they, too, could begin picking and choosing where and to whom they deploy their assets. Beware of an even greater level of service-deployment redlining of population districts, if, and when, this happens. But sometimes you can't have it both ways, and still expect to come out whole.
As I hear it stated in movie flicks nowadays, "It's nothing personal, it's business."
>>It's just par for the course and was just a matter of time. Soon they will probably try to add a "per bit" surcharge for incoming and outgoing local loop data traffic over their precious switched networks.<<
Maybe it wont be the incumbents who levy those per bit charges. Or maybe they will be forced to do it in a way similar to wholesale pricing to retailers, who in turn will pass along the per bit with a markup.
Take a look at FON's proposed ION offering, for example. Here's a case where the service provider, FON, in this case, offers absolutely nothing in the way of local infrastructure, except perhaps the DCE/modem which could be bought at a Radio Shack outlet, and some CD-based software.
Yet, FON proposes to offer multimedia delivery over incumbents' lines and wire centers. Assuming that the customer's line can be used for a plurality of purposes from a multitude of Internet Service Providers of all types, and not only for FON's ION.
How, then, does the incumbent charge either the subscriber directly or FON directly for transport in an equitable fashion, while availing the access line and its central office termination to other providers at the same time? ...other than through some means of usage based pricing?
As much as it is fashionable to throw stones at the ILEC (heck, I do it too when I succumb to anthropological pressures), we should all rest assured that they, too, have a mandate for adequate financial incentives to be satisfied before they carry through with any capital intensive service rollout.
FON doesn't have a corner on this virtual approach, since everything we access in the future (or near everything except POTS, for the moment) will be via a virtual networked overlay taking place at Layers 2 and 3, and above, including voice and fax alternatives in the local serving area, at some point.
This creates an environment where there are now two utilities:
(1) the local access provider that supplies the physical media, and
(2) the Server SP, or the ISP, which provides Layer 3 gateway services to the real, meaningful, other providers who are application-specific.
[Maybe one can do all, but that will not be the way of the future for a variety of reasons, including the multitude of churning factors that the cellular and PCS providers are only too familiar with.]
Such applications, in addition to the plethora of now-common Internet services we use daily, are mainly substitutions of the services we now access only through the incumbents' end office switches. Such as local and LD voice [and data] telephony providers, voice and data call centers, videoconferencing, audio conferencing, and other service bureau functions, and the entire list of services achievable today via SS7 and IN.
>>It is interesting to ponder where the demand for Network Bandwidth will be at the time that last mile services have ridden the cost/bandwidth curve downward to the point where origination/termination costs are no longer limitations on service affordability.<<
Yes, it will be interesting. Perhaps revenues will be derived from subscriptions to content acquisition at that time, or to real estate frontage if the municipalities continue their fiber deployment sprees, or who knows. Maybe some heretofore unknown, starburst application will emerge that throws all assumptions aside at some point, requiring us to re-think the value of the binary digit.
Forgive the rambling, Steve, just some musing here on my part, on a Sunday afternoon.
Have a great day and a safe Labor Day Holiday!
Frank Coluccio
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