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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.

"They do have VPN, they do offer some of these things, but they don't have the sophistication that a Verizon, AT&T or a Level 3 can offer yet. But I think that's something that they're steadily working on," he said.

Muni broadband

Municipal broadband or fiber networks could provide additional competition for the telecom industry, protected as it has been for years by restrictive state and local laws that guarantee effective service monopolies.

The competition, however, is sometimes seen as merely a spur to telecom investment, rather than a meaningful alternative to private industry's services.

"The endgame is not really to empower each municipal authority to have its own network — I'm not sure that's quite sustainable long-term," said Munroe. "It might be easy to say 'put some fiber in the ground,' but you have to maintain that, you have to keep up with technology, and it's not easy for municipals to compete with these big telcos, whether it's cable company telcos or increasingly, people like Google."

In short, most businesses aren't likely to be directly affected by the municipal broadband issues, though they will bear keeping an eye on.

Title II

The biggest and most hotly contested issue, however, is Title II regulation, which the FCC looks likely to impose on broadband services over the fierce objections of the industry.

Shira Enstrom, an analyst with IHS, said that the industry is afraid of being over-regulated, which could limit its ability to offer certain kinds of services important for future businesses. Paid prioritization, in particular, is the obvious sticking point.

"What happens to those 'connected services' if the operator isn't allowed to do any sort of prioritization? "How do you deliver a telemedicine service, for example, to a remote facility where the cost of a private line is prohibitive?"

Though it's far from clear that this type of service would be scuttled under Title II — for his part, Munroe predicts that the FCC's enforcement of such rules wouldn't be too heavy-handed, and the proposed guidelines include provision for "reasonable network management."

Enstrom argued that the effect of Title II regulation could be to limit the options available to business customers.

"I think it could have a chilling effect on the service options that operators are able to offer to address the SMB and enterprise markets, either directly or through partners," she said.


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