Sunday, October 30, 2005

Downstart SBC confronting Upstart Google in BusinessWeek 

or My Pipes - Your Pipes - Their Pipes - Our Pipes

Via Frank Muto from the Washington Bureau for ISP Advocacy

SBC CEO Edward Whitacre is fully confronting the "Upstarts" Google, Microsoft et. al. in a BusinessWeek Online interview: "At SBC, its all about Scale and Scope"

When he was asked the question:

How concerned are you about Internet upstarts like Google, Vonage, MSN and others?

He answered:

"How do you think they're going to get to customers? Through a broadband pipe. Cable companies have them. We have them. Now what they would like to do is use my pipes free, but I ain't going to let them do that because we have spent this capital and we have to have a return on it. So there's going to have to be some mechanism for these people who use these pipes to pay for the portion they're using. Why should they be allowed to use my pipes?

The Internet can't be free in that sense, because we and the cable companies have made an investment and for a Google or Yahoo! or Vonage or anybody to expect to use these pipes [for] free is nuts!"

What? Which pipes? For free? In what other sense the Internet can be free? Please elaborate!
Hello, Mr. Whitacre: Not Google is using these pipes, it is your customers!

So again somebody is competing against his customers? Maybe he should read Clay Shirky's Zapmail example again?

And you customers are not using these pipes for free, they are paying for the usage anyway. They just do not want to use your clumsy applications and services, and they are entitled to do so. At least this was my opinion when I heard about the FCC's Internet Freedoms?

Loss of Reality, Megalomania or just desperation?

SBC Telecommunications' financial performance of late hasn't been much to write home about. For the third quarter, it just reported flat earnings of $1.2 billion on revenue of $10.3 billion, up a scant 0.3% over the same period last year. But given the onslaught of competitors eating away like pigeons at SBC's bread-and-butter landline business, scant growth is better than the alternative. "Is [our] revenue growth great? No -- it's terrible," says CEO Edward Whitacre, who adds, "but it's a lot better than losing."

And you think you are on the winning path? We will see.

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