The Supreme Court has decided that cable networks, created under government franchises, under monopoly conditions, are entirely the property of their corporate owners who don't have to wholesale. (That's the BrandX rocket ship -- they lost the case. What follows is directed to them as much as anyone else.)
Some ISPs bemoaned this bitterly. In the near term it means most of us have two choices for broadband service, the local Bell and the local Cable Head-End, both known for poor service, high prices, and loaded with equipment it will take decades to write off.
Smart folks, however, should be celebrating.
Here is why.
Wireless. (Good time for a picture of Hedy Lamarr, grandmother of 802.11.)
Wi-MAX from competitive fiber and WiFi distribution. Simple, cheap, easy to do, with prices that continue to fall.
The best way into this business is to find an office building or apartment development and build a system that the building owner can actually own after a few years. (The numbers work.) It's a rent-to-own plan for grown-ups. You will need some technical expertise to pull this off, but there should be plenty of service and support revenues down-the-line to make this worthwhile. Plus, you already have what you need to sell Always-On applications (starting with security) to property managers and renters alike, something DSL and cable don't provide.)
Then you just start riding Moore's Law of Fiber.
The danger here (and it is real) is that the Bells may just buy-up the nation's fiber capacity and start jacking up prices. It would still be very costly to replace fiber, even light dark fiber which has been sitting in the ground for years, ever since Dense Wavelength Division Multiplexing (DWDM) got going in the late 1990s.
Those involved in dealing with government agencies, federal and state, should be concentrating on two issues:
- Keeping the fiber market competitive.
- Gaining access to local phone poles.
So long as there is competitive fiber prices will be low and the Bells can't choke you off. When given access to poles (which are owned by phone or cable outfits but whose right-of-way is still controlled by the government) you can set your access equipment safely in place, right at the top.
And now that the duopoly is in place, with high and rising monopoly profits for increasingly fat-and-lazy bureaucrats, there are profits aplenty you can skim off. Just one deal with a major property owner can set you up for life, if you can pull off the technical end.
Dana Blankenhorn has been a business journalist for over 25 years and has covered the online world professionally since 1985. He founded the "Interactive Age Daily" for CMP Media, and has written for the Chicago Tribune, Advertising Age, and dozens of other publications over the years.
1. Jesse Kopelman on June 29, 2005 02:43 PM writes...
Is wireless the answer -- maybe. The problem is this, now that cable companies have protection from wholesaling, they can turn their lobbying dollars to finding ways to prevent new networks, wireless or otherwise, from being built. The truth is that wholesaling is actually beneficial for the companies that do it and the cable industry was stupid to fight it. That is not the real issue, though. The real issue is that the needs of large corporations have a much greater voice in the higher levels of govenrment than those of the people and this is a recipe for disaster. Brand-X and Grokster, neither particularly bad in and of itself, show a very dangerous inclination on the part of the federal government. It all goes back to a point you have made many times Dana -- corporations deserve less rights, not more rights, than actual people.
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