Thursday, November 11, 2004

FCC ruling good or bad for the incumbents? 

Om Malik analyses the effect of FCC ruling on the incumbents and explains Why Bells are not worried about the Vonage Ruling, on the contrary!

First he cites an article from has a longish story on why Vonage decision could be a problem for the Baby Bells.
“The ones with the most to lose from the spread of Internet telephony are the four regional Bell operating companies, which had a near-monopoly lock on local phone services until the Internet phone providers came into existence. In a statement issued Tuesday, BellSouth Vice President Jonathan Banks urged the FCC to “create a similar regime for all IP-enabled networks and services.” He describes the FCC’s decision as a “critical step towards encouraging the deployment” of such services nationwide. ”

To conclude:

Actually the Bells are pretty thrilled about this ruling, because even they get to enjoy the “regulation-less” benefits of the Vonage decision. Susanne Guyer, senior vice president – federal regulatory affairs for Verizon says that “The FCC’s decision today to establish that VoIP services such as those offered by Verizon are to be regulated on a uniform basis at the federal level – rather than being encumbered by a patchwork of potentially inconsistent state rules – is a positive first step toward allowing VoIP to flourish in an environment of robust competition.”

Just like with DSL, I am of firm belief that the Bells would be amongst the ultimate winners in the VoIP sweepstakes. (Cable MSOs and IXCs like Sprint and AT&T are other likely winners!) The current generation of upstarts would vanish like bubbles on the surface of a quiet pond.

I fully agree, provided the incumbents are able to realize the opportunity at hand. I have some slight doubts. It is up to the incumbents to prove that my doubts are wrong.

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