It has been so quiet on the Regulatory front that I have not had a lot to post. Today, I want to talk a bit about competition. There are two distinct sets of Access competition and then one in the metro and long haul.
The thing that most of the time we rail against is the lack of competition in Residential Access. We have in large bulk a Duopoly between Cable and the Telcos in most places. Wireless ISPs, Cellular Networks, and some Overbuilders are available in many areas with more or less coverage and more or less service. There have been experiments like Google Fiber that have tried to build a third way. There have been Municipal Networks in some places, but in bulk there has not been a wide availability of 3rd networks that are going to be competitive over the long haul.
There is also a shift in Business Networks with Fiber becoming more and more broadly available from the incumbents, particularly Cable and the Telcos. There has also been some consolidation in 3rd party Fiber Builders that has led to fewer but larger networks available. Unlike Residential Networks there is considerable Fiber Construction in most major metropolitan areas. The Wireless ISPs also play in this arena and there is at least some coverage in most major metropolitan areas.
But the challenge in both areas is one of Capital Deployment. These networks are problematic to build and maintain. There are also regulatory and legal hassles that often make them even more challenging. Pole Attachment is one example here. Our current system was not built for lots of players to have equal access to a capability. There are many portions of the network that were designed and built during the period of regulated monopolies. People would like this stuff to change overnight but it will just not happen.
The question really is “What should we do?” The fundamental business issue is that 3 good competitors is likely the maximum that any market will support in a broad sense. This can consist of both regional and national players. Once you get down to single digit percentage market shares in any geography, there is just not the capability to fund the construction of a network without some help. This is why we always think about facility sharing (like CLECs and UNE-P). The problem is that these are artificial constructs today. In the long term, we need to make sharing a fundamental part of the infrastructure legally or it will always have problems.
This is where we stand today, the question is “What is a vision for tomorrow?”
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