Blog - Page 65

Wi-Fi Municipalities: Bonding With Locals

News that Intel has agreements to deploy Wi-Fi with governments in 13 countries, coupled with (a)burgeoning interest among US municipalities for such deals and (b)rejection of attempts by telephone companies to erect legal barriers to same, all augur a fundamental shift in the structure of teleccom in America, should municipal deployments suceed. (If they fail, everything returns to SQA.) Telephone companies committed the political error of trying to stop deployment outright, arguing that the umpire (regulator) must not also play in the game (of providing local phone service). The argument has merit, but companies whose reputation for customer service is now at rough parity with that for the airlines are in no position to stop politically popular ideas. Better to Read More ›

Competition and customer service

The companies delivering voice, video and data services rank low in customer satisfaction, reports the Washington Post. Customer service appears to be the primary culprit. The newspaper quotes the following expert opinion: when there is competition and consumer choice, it does get better. Would the cable industry alone have spent almost $100 billion in network upgrades since it was deregulated in 1996 if not to compete against the satellite and phone companies? Competition is here. Customer service may not be as important as it once was, but that’s because customers today can also shop for innovative products and competitive pricing. Gold-plated customer service existed under regulation, when government controlled price and market entry. AT&T emphasized customer service because it was Read More ›

New Life for Narad?

Back in 2001 I wrote about a technology company with a funny name that in a round-about way helped make the case for telecom deregulation. Narad Networks had developed sophisticated analog signal processing techniques that dramatically expanded the usable spectrum of the coaxial cables used in cable TV networks. With current analog and digital programming running from 5 to 860 MHz, Narad’s network updates would open the spectrum up to 1.2 GHz, boosting by 50 percent the already considerable capacity of the cable companies’ hybrid fiber coax (HFC) networks. Over this newly available spectrum, Narad could run Gigabit or even 10 Gigabit switched Ethernet trunks, enabling dedicated switched Internet services of 10, 50, 100 Mbps — whatever — to homes….Or Read More ›

Chasing the Long Tail’s Virtuous Circle

The Internet has already deeply affected business models across the spectrum, from supply-chain management to consumer level e-commerce. But it will take real broadband to truly disrupt the visually oriented movie, television, and education industries. James Surowiecki of the New Yorker, in “Disk Averse,” adds to the growing literature focusing on the “Long Tail” economy. Last fall Wired editor Chris Anderson wrote a groundbreaking article by that name showing that digitally oriented content sellers, who were not constrained by the physical scarcities of shelf space or spectrum, earned between 25 and 50 percent of their profits from unpopular products. The volume of niche content (books, movies, songs) is so large, Anderson showed, that it matches or excels the sales and Read More ›

Ticking Time H-Bomb

Holman Jenkins writes in today’s WSJ that IPTV faces death in the need for Bells to win 33,000 separate cable franchise approvals in order to provide the service. The bad news is that there is another hurdle that could prove equally if not more constraining: Section 104 of the 1996 Telecom Act, which bars electronic redlining, a term Jenkins wrongly attributes to cable lobbyists. Actually, the NAACP coined it in the early 1990s. In the event, sec. 104 inserts “without discrimination on the basis of race, color, religion, national origin, or sex” after the phrase “to all the people of the United States” in section 1 of the original 1934 Communications Act. Read literally this means Baptists must get service Read More ›


When I was in Shanghai in the fall of 2003, I met with Jack Ma, the fast speaking Chinese entrepreneur who founded At the time, as we met atop the world’s tallest hotel, the Grand Hyatt Shanghai in the Jin Mao Tower, Alibaba’s chief business was an online supply-chain platform that connects China’s many thousands of manufacturers, component and commodity handlers, and import-exporters. Now Alibaba also competes with eBay with a consumer online auction site and online payments (a la PayPal). Today, Yahoo! is paying $1 billion for a 35 percent stake in Alibaba and will turn its Chinese operations over to Alibaba. eBay and Barry Diller’s Interactive Corp. had already made deals to enter the Chinese ecommerce market. Read More ›

DSL Dances

The Federal Communications Commission’s August 5 decision deregulating Digital Subscriber Line, thus giving DSL regulatory parity with cable Internet service, and ending the Computer Inquiry Rules (some of which date back nearly 30 years) is a welcome sign indeed, surprising in both its quick action and its breadth. That the FCC acted so swiftly despite a Supreme Court ruling (the “Brand X” case) giving the FCC carte blanche to continue treating DSL more harshly than rivals, attests that Chairman Kevin Martin, he of the 2003 swing vote for state broadband prerogatives, is a genuine convert to real deregulation. The reluctant acquiescence of the agency’s two Democratic commissioners attests to growing Beltway realization that Asia is bypassing US in the race Read More ›

Quick Action

Somehow FCC chairman Kevin Martin got a unanimous 4-0 vote to reclassify DSL as an “information service,” largely freeing it from legacy telephone regulation. After the recent Supreme Court Brand X ruling, Martin said deregulatory moves would be forthcoming, but this is quick action. The FCC also issued a policy statement on “net neutrality,” however, that could open up vast new realms of regulation and must be closely watched. Two steps forward, one step…we’ll see. -Bret Swanson

Flat Earth Economics

Globalization scholar Jagdish Bhagwati this morning takes on Tom Friedman’s “Flat Earth” metaphor. The Earth is not flat, writes Bhagwati, author of last year’s In Defense of Globalization, but “kaleidoscopic.” Bhagwati thinks Friedman’s analogies are too simplistic, that flat and round don’t accurately convey the diversity of the global economy, and that China and India still have a long way to go to match Western sophistication and wealth. No doubt, Bhagwati is right in some of his particular criticisms. Friedman’s overuse of analogies makes him vulnerable to such charges of over-generalization. Nevertheless, Friedman’s basic premise of a highly integrated and connected world economy stands. The funny thing to me and my supply-side friends is that this has been the foundation Read More ›

Monopoly, RIP

More evidence of the intense competition selling communications services in the small and medium-sized business market. Finally realizing this, the FCC apparently is about to vote on the elimination of the DSL line-sharing rules that have depressed telecom investment in the U.S.