ONE FEATURE, ONE BUG
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THE FEATURE: THOSE QUICK-STUDIES AT AT&T!
Not 12 hours after I sent THE LONG HAUL CONNECTED TO THE
SHORT
HAUL -- SMART Letter #9, out to the SMART List, AT&T,
grasping
the fundamental logic of my argument, announced that it was
buying
TCI. There are many SMART People at AT&T, and I
am wondering which
one I should send my bill to. I suppose that 1% of the
gross would
be about fair :-).
Certainly TCI is a better move for AT&T than AOL.
But US$30B for
some 11 to 21 million homes, depending on how you count, is
a high price.
It will take big margins for a long time for AT&T to see
a reasonable
ROI. And TCI has an old network with many dispersed,
rural customers,
so that'll take a lot of building to get it right. But
I'd love to
see AT&T belly up to the challenge, and stick with it
this time until
the job is done!
As a cautionary tale, I relate the story from George Gilder's,
"Life After Television" where he is describing how
the hares
analyzed their loss to the tortise. "If only we
had a big heavy
shell to lug around on our backs," said one hare.
"We need to have
short, scaly legs," said another. And a third hare
said,
"Yes, and it would really help if we had beady green
eyes."
I wish my former colleagues at AT&T much success. I
really do, from
the bottom of my heart. They have a better chance to
create real
nationwide broadband local competition than any current player.
But the key will not be wires into homes, any more than hares
need a heavy shell to beat tortises. Instead, it will be to
grasp
the essence of the discontinuities now wracking the telecom-classic
value proposition, and to address this essence with an entrepreneurial
will. So build, my former colleagues, build bandwidth
to homes.
Build with the faith that if you build it, they will come.
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THE BUG: WHAT DOES THE 36 MONTH CLAUSE REALLY MEAN?
OK, I'm not a lawyer, and MAYBE I misread the Telecom Act.
A couple of SMART People whose judgement I respect say that
the 36 Month clause does not mean "RBOCs can sit on their
hands
for 36 months and then enter in-region LD."
Here is the text of the act upon which I based my "sit
on your
hands" comments in SMART Letter #9.
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SUBTITLE B--SPECIAL PROVISIONS CONCERNING BELL OPERATING COMPANIES
. . .
`PART III--SPECIAL PROVISIONS CONCERNING BELL OPERATING COMPANIES
`SEC.
271. BELL OPERATING COMPANY ENTRY INTO INTERLATA SERVICES.
. . .
<<(c) contains the checklist for in-region LD entry
(d) is about administrative provisions
(e) is entitled "Limitations, and the first point under
it is . . .>>
. . .
(1) JOINT MARKETING OF LOCAL AND LONG DISTANCE SERVICES-
Until a Bell operating company is authorized pursuant to
subsection (d) to provide interLATA services in an in-region
State, or until 36 months have passed since the date of
enactment of the Telecommunications Act of 1996, whichever is
earlier, a telecommunications carrier that serves greater than
5 percent of the Nation's presubscribed access lines may not
jointly market in such State telephone exchange service
obtained from such company pursuant to section 251(c)(4) with
interLATA services offered by that telecommunications carrier.
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So I read Subtitle B, Part 3, Section 271(e)(1) to say
that
36 months after the Act is law, that a big LEC (>5%) MAY
THEN OFFER
jointly marketed local and interLATA services.
Am I wrong? If so, what am I missing/misinterpreting?
Please post comments to smart-discussion@isen.com and read
what
others are posting on http://www.isen.com/democracy-wall/
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Regards,
David I
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Rethinking the
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Date last modified: 22 July 1998