David Isenberg’s new SMARTLetter has his must-read analysis of the “utter crisis” in telecommunications, as FCC Chair Michael “Son of” Powell calls it. Isenberg puts it in perspective. For example:

Let’s not call the current overcapacity situation a “bandwidth glut.” Gluttony is one of the seven deadly sins. The scarcity folks — the telephone companies (and others) whose business is based on the fact that communications capacity is scarce, therefore expensive — are controlling this “glut” dialog. Nobody talks about a glut of clean air or a glut of traffic-jam-free roads. No — to an end user it is great to have a lot of cheap >network capacity.

and

Everybody believes that fiber to the home is the end game of the Communications Revolution. It is not expensive, about US$600 to $3000 per home with today’s technology (and less in the future, and less with economies of massive scale). But just as Qwest’s 1997 transcontinental fiber build-out fatally maimed domestic long-distance (including Qwest itself), fiber to the home would kill the Incumbent Local Exchange Companies.

Therefore, fiber to the home is not coming until the Incumbent Local Exchange Companies become considerably weaker.

and

ATM and SONET are not the only technologies that are becoming obsolete even as they’re being deployed. There’s DSL and MMDS and 3G and WAP and a whole lot more. Technology marches on. And it is not as if Telecom executives made the wrong decisions — mostly they made the best decisions they could at the time.

The debt movie is playing at the Global Crossing theatre and the WorldCom playhouse — but soon it will be playing at a telephone company near you. Verizon and SBC and BellSouth will not be immune …

and

So if you hear that somebody is going to “enhance” the Internet — to make it more efficient, to Pay the Musicians, to Protect the Children, to thwart hackers, to enhance Homeland Security, to find Osama, or whatever — this is almost certainly propaganda from the powerful businesses that are threatened by the Internet. Remember that the Internet became the success it is today — and the threat that it is to existing telcos — because it is a Stupid Network, an end-to-end network.

This is the most coherent, understandable explanation I’ve read of what’s goin’ on technologically and economically.

Categories: Uncategorized dw