Paul Kapustka's Blog

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August 29, 2006

Are big telcos leaning toward 'open' loops?

Maybe it's a stretch to think that AT&T and Verizon are suddenly going to shift course and allow competitors back into the line-sharing business, but conversations with reps from both companies last week in Aspen make me think we'll see more, and not fewer, open networks in the future.

Why the sudden optimism? First there was the very public statement by Verizon's Tom Tauke that the company now thinks private-public partnerships in (some) muni network-building efforts are O.K. (after actively opposing them in the not-so-distant past); then there were some private conversations with folks familiar with AT&T's plans who predicted a kinder, gentler Ma Bell when it comes to municipal network buildouts.

Both telcos, of course, lace any such talk with big caveats: That such networks must not use their governmental or taxation powers to compete directly with private-company efforts; and that they most likely need to be in areas where Verizon or AT&T wouldn't want to build broadband networks in the near-term future.

Good enough, I say. Anything that gets us closer to Bob Kahn's idea of an "open CO" or Reed Hundt's plan for fiber-izing the nation is a step in the right direction.

Guesses as to why the telcos are suddenly warm and fuzzy about the idea of muni nets? Maybe because they can feel the political winds as well as anyone, and no matter what you think of national broadband rankings, the growing anecdotal evidence of better, faster networks, cooler wireless gear, etc., all happening somewhere other than the U.S. has the same national-embarrassment factor as when our hoops team got slapped around a bit in the world forums.

Verizon's Tauke said last week that telcos need to make sure they are not behind the perception curve when it comes to buildouts, otherwise they face the risk of knee-jerk legislation:

"If we don't, the political pressure [brought by the absence of broadband] will cause government to act, perhaps prematurely," Tauke said.

On the anniversary of Katrina, one person close to AT&T's operations said that going forward, you won't see Ma Bell acting like BellSouth did, actively opposing the wireless networks that are still carrying a bunch of Internet traffic in the affected area.

While AT&T officials at last week's gathering wouldn't comment on the record about rumors of a deal with muni Wi-Fi upstart MetroFi, they do say publicly that anything that increases Internet traffic is good for a big backbone provider; whether or not that means AT&T and Verizon back down on lobbying against muni projects is something yet to be seen. But the sounds coming out of Aspen last week sure sounded like a peace offering, rather than a war cry. Let's hope so.

Posted by paul at August 29, 2006 12:28 PM

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