Subscribe / Unsubscribe Enewsletters | Login | Register

Pencil Banner

Three fights Big Telecom is losing -- and what that might mean for IT

Jon Gold | Feb. 6, 2015
It's been an unusually tough few months for Big Telecom. The industry, which enjoys a generally friendly regulatory climate, has plenty of influence in Congress and with state and local governments across the country.

It's been an unusually tough few months for Big Telecom. The industry, which enjoys a generally friendly regulatory climate, has plenty of influence in Congress and with state and local governments across the country.

On three big issues, however, the outlook is fairly grim for America's biggest telecom companies. First, the proposed merger between Comcast and TWC, the two largest wired broadband providers in the nation, has come under increasing scrutiny from regulators, consumer rights advocates and many others — who argue that the merger would create an effective monopoly on consumer broadband in a market already bereft of meaningful competition.

The FCC, prompted by recent comments by President Barack Obama, has also indicated that it may strike down state and local laws that restrict the ability of municipalities to create their own broadband networks — laws that the industry has worked hard to help pass. Their removal could clear the way for publicly backed competitors in many local markets.

Finally, and perhaps most importantly, the long-running public debate over whether high-speed broadband is a public utility is heading for a decision in favor of the "yes it is" camp — which is made up of, essentially, all stakeholders but the cable companies themselves, who fear increased regulatory oversight under Title II of the Telecommunications Act. The FCC announced yesterday that the new proposed rules would classify broadband services as a public utility, which would uphold generally agreed Net Neutrality principles and ban paid traffic prioritization.

None of these negative outcomes have yet come to pass, of course — AT&T has already threatened to file suit over any proposed reclassification, and the industry in general is likely to wage a scorched-earth legal campaign against Title II. The Comcast/TWC merger may yet be approved by U.S. regulators, and the FCC efforts on behalf of municipal networks could be torpedoed by additional legal warfare.

But the winds, currently, are blowing against the telecom industry, not for it. So, if the weather holds, what does it all mean for business users?

The Merger

According to experts like IDC's Courtney Munroe, landline providers like Comcast and TWC aren't the biggest players in the enterprise market, taking a back seat to Verizon, AT&T and Level 3.

"I think you're going to continue seeing them going up-market, they're adding new business services to their portfolio like VPN, managed services, cloud services," he said. "So they're slowly but surely inching up into that regional mid-market area and looking for some national deals eventually as well, but that's gonna be a little further down the road."

While consumer advocates warn of price hikes, further limitations on choice and other major issues to come if the proposed merger occurs, Munroe asserts that Comcast and TWC still lag behind the competition where business services are concerned.

 

1  2  Next Page 

Sign up for Computerworld eNewsletters.