by Larry Summers General Manager, WTS Online [March 26, 2004]

Most of us got excited about Tauzin-Dingell, with good reason. Senator Hollings killed it in the Senate. Verizon and SBC decided to go rural anyway—in light of FCC rulings. The other RBOC's and lesser ILEC's are expanding as well. And they will soon be in a town near you—or your town—if they aren't there already.

And they will put you out of business, if they can. My bet is that they can. If they can nail Internet America to the tune of 42,000 subscribers in a year, they can get the rest of us real easy.

So what do you do about it? Well, you can go back to sleep, if you want.

Or you can fight. If you choose to fight, read on, but you might not like what I have to say. Getting ISP operators to organize is like herding cats and getting them to contribute money to save their own skin is like asking for their first-born.

So I am not going to propose either course. Don't send me any money. Don't organize. And I will most likely see you in the unemployment line. On the other hand, the following course of action takes no organization and costs just a little bit of time and energy. As an ex-lobbyist, I have a fair idea of how things work. So listen up, here is what you can do to help.

I wrote my Senator. Before that, I called and asked for the staffer who handled telecommunications and the FCC. I got an e-mail address and sent a word document to that same staffer. I followed up with a phone call.

I sent another e-mail detailing exactly what I wanted my Senator to do, if possible. I would have done the same thing with my House Representative, but I am in an area of flux since Texas was redistricted this year. So I have no idea who my Representative will be and besides, the one I still have until the election voted for Tauzin-Dingell. He was convinced to do so by a staffer who attended a phone company seminar at phone company expense (so I have been told). Yep, that's the way it works. Want to host a staffer at a fancy resort for a few days?

I will send you a copy of the letters I wrote if you ask for them. E-mail: jls at wts.net, Subject: Letter Request.

Doing the research
After I did all that, I started doing some more research. I found The New Networks Institute. That site really scared the pants off of me. I read a Verizon history lesson and the rest of that fascinating site. And my fear turned to near certainty that my business would eventually go down the tubes. And that my customers would not be well served if that happened.

Unless something happens in the next two to four months, in my opinion the entrepreneurial based, creative telecommunications revolution will be over. Simply put, we will be smothered by the political and financial might of the phone companies. Oh, as consumers, we won't lose most of what we now have. That which has been invented and implemented will continue—under new management. Prices will go up, but that's the way it works when competition is killed. Those who can afford it will still have broadband.

But what about the future and future innovations? What about technical service in rural areas?

Keep firmly in mind that it took the phone companies many, many decades to develop and deploy touch-tone. Keep in mind that they missed the Internet revolution by their own admission. And keep in mind that Bell-Head mentality thought a real innovation was a Princess phone that used household electricity to work.

Ok, so we believe that Verizon—and the other Bell-Head driven companies are all losing money on DSL. So why are they doing it? After all, deduct second line revenue loss, buy bandwidth, DSLAMS, patch panels, remote DSLAMS, then advertise and telemarket, put in e-mail servers, delegate personnel, and do all the rest of the stuff it takes to run an ISP; and you can easily see a real loss of at least $20.00 per month per customer and probably more than that.

So again, why are they doing it? Well...

The CISPA agreement with PacBell scared the pants off of the Bell-Heads, in my opinion. It was all about who controlled the end-user. CISPA won that battle, supposedly. And remember, this is my opinion. I don't mean to offend CISPA in any way, shape or form. Heck, we need associations to fight our battles. On the other hand, there is the principle of unintended consequences. They did what they thought best at the time. If I got it wrong—someone at CISPA will probably tell me.

So why are the Bells all in a lather over the agreement?

Simply put, they want to deliver "On-Demand Services." The technology has been around for a while. It works. The Bells can finally put in some fiber (long ago promised in exchange for 14 percent returns) to distribution points then deliver movies or whatever else to "Their" end-user customers via legacy copper. Never forget that all phone companies consider someone connected up to their wires to be "Theirs!" In other words, they own the consumer, period.