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HolidayBuyer's Guide
Services

The threat to the Bells

It is clear that VOIP and a competitive broadband provider market (cable and DSL) provide a very severe threat to the monopoly of the Bells.

In response to the July 16 Perspectives column by Yale Braunstein, "Wrong turn in the Net's future":

Interesting comments by Yale Braustein. Interesting but wrong.

Currently, there is no incentive for the last copper mile owner to invest in their plant because they are forced to lease it out to whoever wants to be in the DSL market. As a result, DSL is lagging cable in the broadband market.

For cable, the picture is very different. Since cable operators were not forced to share their line (they used to be, but that stopped), they have restarted to invest. As a result, cable Internet access is spreading rather fast. What is needed is competition indeed--between DSL and cable. In fact, the most competitive situation can be reached with both providers (Bells and cable operators) put in a situation where they can invest and compete with the other without the regulatory uncertainty of having one member of this duopoly forced to lease lines at rates determined by government employees and not the other.

To let the local telephone company invest in its copper plant and attempt to extract profit from it in competing with the cable operator is very healthy. As for the argument that local phone line is a Bell monopoly, it is clear that VOIP and a competitive broadband provider market (cable and DSL) provide a very severe threat to the monopoly of the Bells.

In fact, as an investor, I would stay away from the Bells. Not quite the situation of Microsoft of the Standard Oil.

Marc Anselme
San Anselmo, Calif.