Friday, October 11, 2013

To Holman Jenkins and the IIA

Holman Jenkins, the Internet Innovation Alliance really loves your editorials in your boss' paper, the WSJ. I'm just not sure you do get it.

The IIA is an ILEC astroturf group. The group is not about Innovation at all. What was the last thing that the ILECs innovated? VoIP came from companies like Vonage, that the old guard sued to high heaven when they got too big. Cloud services came from companies like Google and Amazon. The only Innovation the ILECs do is steal it. They haven't had an original idea in their heads since Bell Labs created DSL in the sixties. Oh, and it took 3 DLECs to bring DSL to the public - or we would still be paying $1500 for a T1.

Google Fiber isn't about demonstrating how much regulation there is. Way to reach to pull that factoid out.

Googel Fiber is about demonstrating to the public and the regulatory agencies that Gigabit fiber is not only possible, but that the ILECs have purposefully not provided to America in the name of profit.

You make an argument about the high cost of regulation and running two networks. One of those networks has earned the ILECs a tremendous rate of return for many, many years to the point that ILECs were able to spend hundreds of billions on cell networks, data centers, cloud services, and buying companies.

Just like EarthLink was able to use its admittedly dwindling revenue from dial-up to pivot the company, ILECs were able to do the same.

Let's not forget that the Rural LECs were given big money by USF for their plant. At any time, they could have built out fiber with RUS loans and other monies. But they just milked the cow - until the cow is too old to give milk (in their opinion).

Windstream just announced how well it is doing in consumer broadband. That is DSL, Holman. DSL that runs on copper, Hholman. The same copper that CenturyLink, Frontier and Fairpoint are still making use of and revenue from. What part of the telecom industry are you looking at?

Is fiber nice? Absolutely. Why do we hear about fiber so much in the last few years? one, the media only knows how to sing one tune. Like you, they don't know shit about the industry but can re-print a press release like no one's business. And they can parrot anything an advertiser says. Kind of like you and IIA.

The other really big reason: fiber has been the same cost to build out with for the last few years. Loans became available due to RUS, ARRA and other programs. Regional CLECs and PCOs bet on themselves to profit off of a big investment in fiber. An investment that they made themselves without government funds.

Google proved that the ILECs (and to some extent the cablecos) have been short changing us for years. VZ (for one) received rate hikes dating back to 2000 for putting in FTTX, but did not deliver on that promise in many states including NJ and PA. I think they spent that money on lobbying, astroturf groups (IIA) and press junkets.

Yes, we do need fiber networks in metros. The Internet is the engine of our economy - IF the NSA doesn't destroy it first. We need copper too. Ethernet over copper is a cheaper, faster to deliver service than copper. AT&T may hate copper but its U-Verse platform runs on it for the last mile via VDSL2.

In summary, Google proved that Gigabit fiber networks were economically possible - and the ILECs had cheated us by not providing it. The copper plant is still necessary. Don't want it? Spin it off or sell it. Many providers have built out fiber to the community without government funds or Wall Street bonds. If they can do it, why can't the ILECs or the cablecos?

All you pointed out is how the ILECs got outsmarted by Google because some companies look for solutions, other companies look for excuses.

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