New World Order

Very interesting article on CNET News.com documenting the shift from old line telephone companies to the world of today (and tomorrow), characterized by fiber optic cable, IP telephony and software-based routers and PBX’s.

It’s a brave new world, and it will have an indelible effect on old line phone companies. It will also have an impact on how governments regulate telecommunications companies, both old and new:

“In the end there is going to be more regulation, not less,” said Christiaan Hogendorn, who teaches the economics of technology at Wesleyan University. “Every infrastructure industry starts with lots of competition and then as competitive issues come up, we get more regulation.”

One of the primary issues that will likely shape the nature of the new world order is the stance old line companies (who manage the networks on top of which all of this fun new stuff is happening) take towards their competitors. There have already been skirmishes – scuffles have developed where broadband providers have blocked access to competing services delivered over their networks.

An uneasy truce appears to have settled around a policy statement adopted by the FCC to outline “net neutrality”:

  • Consumers are entitled to access the lawful Internet content of their choice;
  • Consumers are entitled to run applications and services of their choice, subject to the needs of law enforcement;
  • Consumers are entitled to connect their choice of legal devices that do not harm the network; and,
  • Consumers are entitled to competition among network providers, application and service providers, and content providers.

Its not clear that this statement (as opposed to a formal regulation by the FCC) is going to cut the mustard as competition among the old and the new heats up. As old line companies lose these competitive skirmishes, the impact will continue to be felt by workers who a generation ago could count on beginning and ending their career with the phone company. The same phone company.