BlueSkye
join:2002-10-25
Los Angeles, CA
| Telco Monopoly Legacy
It is a brilliant reuse of an existing (and somewhat antiquated) resource by Verizon. And it will help proliferate WiFi.
But it's also a good example of how the telcos have a huge competitive advantage against non-incumbent providers, based upon the telcos' origins as regulated monopolies.
It would be virtually impossible for a non-incumbent to build out a wireline network in a metropolitan area today (hurdles include government approvals, public right-of-way, availability of capital, incumbent barriers to entry). That is precisely why the telephone and cable companies were initially granted regulated monopoly status with the benefits that accrue thereto (public easements, no competition, access to capital, regulated profits, etc.)--precisely so they could build out such networks.
Can you imagine the cost to a competitive hotspot provider if it wanted to build such a network of WiFi access points in Manhattan today in a competitive environment. It would have to purchase thousands of 8 square foot pieces of Manhattan real estate in the open market and provide wired access to each of them.
Obviously impossible. Verizon's existing ownership of such a network of public phones is a vestige of time when Bell Telephone was a regulated monopoly. And that ownership is a HUGE competitive advantage--an insurmountable one.
And yet the telcos continue to whine about how they are hugely disadvantaged in the marketplace. |
