It's a crazy notion that is going nowhere.
But it would solve a lot of problems, most especially for the Bells, who would be the idea's staunchest opponents, if it were proposed. (It's not being proposed. I'm just blogging here. This is a thought experiment.)
The problem is there is billions of dollars in copper infrastructure that is becoming worthless faster than the loans made to build it can be paid off. This fact is the elephant in the room no one wants to talk about.
So throw those assets, and the debt behind them, into a pot. Sign yearly management contracts with the present owners (mainly the Bells) to keep those assets going.
Then anyone who wants to build on those assets (including the Bells) or provide services using those assets (like ADSL) can do so without discrimination. The Bells no longer have an incentive to stifle competition. They do have an incentive to build, to build fiber, to build what amounts to a cable system, because every dime they use in that effort is a new dime, and every dime that comes in as a result of that effort is their dime.
The Bells would all create management arms, and cash flow from the contracts. But the corporation as a whole would have a different set of incentives. It would want those costs kept down. It would be pushing all its assets into advanced services, and seeing the management company as a cash drain. Fine. If they try to starve the management company, there would be a process by which customers could complain and have a new manager appointed.
Why should the Bells agree to this?
They would get a lot of worthless debt off the books, and a lot of assets that aren't worth what they cost to build.
Why am I proposing this? Because the Bells have been given everything they wanted, for 10 years, and now they want more. They only deliver consumers 1% of what they could deliver, but after protecting their monopolies from competition. And now they want to destroy the Internet, eliminating the vital non-discriminatory nature of it, and making the same promises they failed to fulfill for 10 years.
It's not that they're evil. It's because this is where their incentives lie. Force everyone to use their network, all consumers, then blackmail big information providers in order to reach those customers. The obvious result is that only big information providers can play, and the Internet becomes just like the broadcast media it's designed to replace.
That's madness. But that's the way the incentives work right now.
So change the incentives.
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 December 19, 2005 02:44 PM writes...
Another solution is one that I have mentioned many times before: Force separation between the physical network and service providers. That way, every service provider has equal access to the network and can compete for customers as opposed to favorable regulation. At the same time, the companies that actually own the networks would provide open access to all potential providers and it would be quite tranparent to all why certain parts of the network were getting the spending (making it far easier for government involvement through USF and the like).
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