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July 20, 2005
Food for thought, Wed., July 20, 2005, 5:51 PM
Here is a reprint from Neil George, KCI Communications, Inc. [bygeorge@kci-com.com]. In my Week #28 in Review, I briefly discussed the current battle between the cable and telco companies, saying I think and hope the telco's will win. That's because I'm fed up with wires. This is a digital world that does just fine wireless.
It's hard to control wireless. And some of you know my ill feelings for people like Dr John Malone of Liberty Media, and others behind the promotion of so much poker spam.
Anyway, I don't usually reprint stuff, but this is food for thought.
"At the core of the decision is the implication that cable
companies aren't required to lease their access lines to other
Internet Service Providers (ISPs), which is the opposite of
the telephone companies' situation. The fear: This could limit
innovation. That's because few companies, and certainly not
newly established startups, can afford to buy the equipment,
dig up the dirt, install the lines and run the operations
necessary to deliver their specific add-on services. Unless
you want your streets ripped to shreds every year for some new
company installing its products, it's a good thing they can't.
But permitting cable companies to keep their lines closed
isn't good for innovation or business. Think back to the late
1990s when companies such as AOL (NYSE: TWX) and Earthlink
(NSDQ: ELNK) made it big by offering dial-up Internet services
through telephone lines. Now that most people are switching to
broadband services, though, these same companies--as well as
new ones trying to make it big--are finding it difficult to
reach customers because cable companies refuse to permit
access. It's no wonder Earthlink's stock has taken a hit since
the Court's decision.
But the ruling is more widespread than that. This is what the
press hasn't talked about. The ruling actually permits cable
companies to completely control the traffic that flows on
their lines. That doesn't just mean controlling what traffic
goes into your house, but how it flows.
In other words, cable companies can prevent, limit, cripple or
do anything else they want to the information that travels
between the outside world (i.e., the World Wide Web) and your
home.
Think this is in the land of imagination and conspiracy
theories? Think again. Earlier this year, Vonage, a company
that offers Voice over Internet Protocol (VoIP) services,
filed a complaint with the FCC regarding a local cable company
blocking and slowing down VoIP services in its customers'
homes. Despite Vonage's efforts to resolve the problem with
the cable company in question (the specific company was never
positively identified), it wasn't until after an FCC complaint
was filed that the cable company backed down. And there are
additional reports of this occurring in other countries.
You'd hope market forces would keep the cable companies honest
and willing to lease their lines. After all, consumers won't
flock to or stick with a company that offered limited services
when its competitors--whether it's other cable companies or
telecoms--provide the full package for the same cost.-- Neil George
Posted by Posted by Bill Cara on July 20, 2005 06:05:09 PM | Category: 50 Telecom Services