IP Convergence: Beyond VoIP, Beyond Cost Savings

An odd sense of deja vu took over when I read the news this past weekend that New Jersey approved a statewide franchising law for Verizon to offer cable television service. Maybe it was Ivan Seidenberg saying "Gov. Corzine's decision means New Jersey consumers and businesses are poised to have the nation's most advanced communications network delivered directly to their front door."

And then it hit me. It was deja vu all over again.

You see, back in 1993 the New Jersey Board of Public Utilities approved Opportunity New Jersey, a “plan” by Bell Atlantic (Verizon’s original name) to deploy a fiber optic network throughout the state. Of course, this Opportunity was only available to New Jersey if the BPU deregulated Bell Atlantic and froze residential rates (at a time when costs were declining). The New Networks Institute has done a good job of exposing the folly of Opportunity New Jersey.

But now with statewide franchising, Verizon can really invest in New Jersey. It’s a wonder policy makers fall for this nonsense time and again. I never understood the threat the Bell Companies were making. Essentially they were saying deregulate us or we won’t invest. What an empty threat. If you don’t invest, you can’t compete. It’s like the scene from Blazing Saddles when Cleavon Little puts a gun to his own head to fool the angry crowd into thinking he was being held hostage.

But I have to hand it to Sol Trujillo over at Telstra. A veteran of US West (pre-Nacchio Qwest), Trujillo is trying this tired effort out in Australia. Only there the regulators don’t seem to be buying what Sol is peddling. The Australian Competition and Consumer Commission let Sol take his marbles home when they wouldn’t succumb to his not-so-subtle form of economic blackmail. I particularly enjoyed this bit of news –

Helen Coonan, the Communications Minister said the collapse of the talks was disappointing but the Government would not be tied to an "artificial deadline, determined by Telstra" on regulatory issues. She said Telstra's attitude was "anti-competitive" and the company wanted to "re-monopolise" with the new network, but she dodged a question about whether the Government had confidence in the Telstra chief executive, Sol Trujillo.

It’s unfortunate that Ms. Coonan is in the minority of regulators around the world. Most of her peers have previously succumbed to incumbent pressure to deregulate prematurely and severely curtail interconnection and unbundling rights. But Ms. Coonan and Viviane Reding over in Europe seem to be the vanguard of competition and consumer protection and I can only hope other regulators follow their lead.