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Is Bigger Better?




Theres a scene in the animated movie Iron Giant where the 50-foot-tall, metal-eating extraterrestrial robot is blown apart. Each arm, leg, nut and bolt has a homing beacon that recalls them back to the machines head and body, allowing it to rebuild anew.

This same thing seems to be happening in the telecom industry with the Bell System reassembling itself piece by piece under the AT&T Inc. banner. The latest piece to return to the whole is BellSouth Corp.

The recreation of the telecom giant conjures images of a big metal foot trampling puny competitors. I know, I know. In the cartoon, the giant is gentle and simply misunderstood because of its fearsome size. Thats the point at which this analogy fails.

Nevertheless, I am at a loss to comprehend how we ended up back here. We all watched it happen right before our eyes over the last 20 years. Yet, the competitors and even consumer groups have been powerless to stop it.

We like to think the regulators dont understand the competitive marketplace. And, I suppose that could be true to a degree, but its more likely the political influence of these powerful, locally based Bell companies.

Someone told me recently, Its good to be big right now. He was talking about AT&T, Exxon, Wal-Mart, Microsoft and other commercial behemoths that are allowed to grow and acquire virtually unchecked. Its a policy issue; and policy comes from politicians and the administrators they appoint.

I never discuss politics with my friends, and after 17 years, there are many among you that are my friends or surely would be if we met. But I am going to break that rule to ask why you would vote against your paycheck against a competition-friendly environment.

I am not so naive to believe consolidation in maturing markets is unnecessary. It is, and it happens. The CLEC market is experiencing it now, and while painful for them, its a normal part of the business cycle. What I object to is the consolidation of power into too few hands. AT&T and Verizon now share majority control over the access network and Internet backbones that you need to deliver services to businesses and consumers.

Already, the terms of previous megamergers have granted stable special access pricing for only two years and UNE-L pricing for two-and-a-half. What then?

Wireless access? Thats definitely a good idea, but it doesnt solve the problem of the backbone and the threat of Bell-imposed slow and fast lanes.

On that point, the competitive industry is pinning a lot of hope on the policy rewrite, but it seems to have few friends in Congress; the leading bills are void of net neutrality provisions.

Once again, it will be up to the competitors to open windows where doors are shut. One way to do that is to find out who among the Congressional candidates up for election in your district supports your business goals and seriously consider giving them your vote regardless of their party affiliation and whether it matches your own. If you are too busy or arent sure where to look, call COMPTEL, +1 202 296 6650. They will be glad to point you in the right direction.

AT&T is going to get bigger, and Verizon is likely to get bigger too. But there is still a chance to make sure their powers dont match their sizes.

KHALI HENDERSON
group editor


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