more on Lessons from the Meltdown of U.S. Telephone Industry - Giving Top Priority to the Internet

[Dave Farber <dave () farber net>]

------ Forwarded Message
From: "Perry E. Metzger" <perry () piermont com>
Date: Fri, 08 Nov 2002 21:10:53 -0500
To: dave () farber net
Cc: ip <ip () v2 listbox com>
Subject: Re: <[IP]> Lessons from the Meltdown of U.S. Telephone Industry -
Giving Top Priority to the Internet


Dave Farber <dave () farber net> writes:
> [ I personally am distressed with the Prof. Noam proposal to allow cartels
> during recessions to "save" the industry. Djf]

To the consumer, the telecom crisis is no problem. I'm getting $.03 a
minute nationwide long distance and $.07 a minute calling to Australia
-- that's fine with me. The problem is only for the shareholders.

In this regard, the problem in telecom may be the same as that in the
airline industry, which is to say, "not a problem for the
country". Airlines have gone bankrupt over and over since airline
deregulation but there is no sign that this is a problem for consumers
at all, who are more or less getting the least expensive flights that
the industry can deliver.

Similarly, commoditization etc. may be a problem for AT&T, but is it a
problem for virtually everyone other than telecom sharehoders? It is
fine if telecom is only a marginally profitable business from the
consumer point of view. Plans to "save the industry" aren't needed,
or, to put it another way, they're a great idea if you own telecom
stock, but they do nothing for a couple hundred million telecom
consumers.

The real problem for consumers continues to be the stranglehold of the
iLECs on the last mile, which among other things they used to destroy
competition in DSL service. Breaking that lock might be bad for
Verizon, but I doubt it will be a particular concern for me, any more
than AT&T's decline causes me any worry. I'm sure the telecom industry
will oppose even greater competition, but it is not a question of what
is good for *them*, it is a question of what is in the interest of the
general public.


Perry


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