Begin forwarded message:
From: Daniel Berninger <[EMAIL PROTECTED]> Date: June 14, 2004 4:05:58 PM EDT To: [EMAIL PROTECTED] Subject: Battleground changes in phone wars
Dave,
For IP if appropriate. The article makes the point that wireless and VoIP
technology drivers will shape the communication future much more than the
noisy RBOC vs. IXC regulatory battle. In fact, the wins allowing Bells to
charge more just accelerates the exodus of customers towards these new
technologies.
Dan
-------------------- Battleground changes in phone wars --------------------
By Jon Van Tribune staff reporter
June 10, 2004, 4:25 PM CDT
To many in the phone business, the battle over rates is a diversion from the
real issue: Technology has already reshaped communications.
SBC Communications Inc. and other phone giants have been warring with rivals
over control of traditional phone networks since 1996. But consumers are
rapidly switching to wireless phones, the Internet and even cable television
systems to talk, bypassing a century-old network.
This week the Bush administration opted to move away from
government-enforced competition that requires Bells like SBC to share their
networks with rivals like AT&T and MCI, which now supply local phone service
to some 19 million customers nationwide.
Today Michael Powell, chairman of the Federal Communications Commission,
said his agency will write new rules to govern--and probably phase out--the
network sharing provisions included in the landmark Telecommunications Act
of 1996.
Consumer advocates say this will lead to fewer choices and higher prices for
landline phones.
Yet new rules could also accelerate the shift to new technologies, said Dwayne Goldsmith, a former Ameritech executive who now heads Inflexion Communications, a Detroit-based telecom startup.
"What this does is give the local phone companies the opportunity to strangle themselves in their own copper networks," said Goldsmith, whose firm just won a contract away from SBC to supply voice service to public schools in Detroit.
"We can do a lot of stuff with wireless now that just wasn't possible five
years ago," said Goldsmith. "A lot of companies like ours will be doing just
that."
Wireless phone companies continue to carry more local and long distance traffic because their rates are competitive and their features more enticing, said Albert Lin, an analyst with AmTech Research based in San Francisco.
For eight years the Bells and their rivals have battled over control of the
old circuit-switched network, Lin said, and even though the Bells have won
that war, it's becoming irrelevant.
"The real battle now is between circuit-switched networks and the Internet,"
he said. "There'll be a phase-out of network sharing, but during that time,
the Bells have to worry about how many customers they'll lose to wireless,
to cable operators and to start-ups that provide voice over the Internet."
Even though it is phasing out network sharing, Lin said the FCC has signaled
it won't classify Internet telephony as a traditionally regulated service.
Congress has extended a ban on taxing the Internet and the FCC has allocated
new airwave spectrum for wireless Internet uses.
"Going forward there'll be much more interesting and meaningful battles that
have nothing to do with regulatory decision-making," said Lin.
Copyright (c) 2004, Chicago Tribune
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