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January 29, 2006

The Rise of the RBOCs:

Glad to see another person pick up on My reaction to WSJ's "Phone Companies Set Off A Battle Over Internet Fees."

Stream of Consciousness: Rise of the RBOCs

"So imagine of turnpikes charged when you got on the road, and then again when you got off. This is exactly what some of the telcos are trying to do with internet access. They see that internet access is a commodity and decreasing revenue from the cash-cow that is circuit based voice service and are looking for new sources of revenue..."

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(c) 2006 Jeff Pulver. All Rights Reserved.
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Posted by jeff on January 29, 2006 09:36 AM | Permalink

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Comments

The turnpike analogy may make the whole idea sound preposterous, but consider that this is the situation that RBOCs already enjoy in the voice world today. The subscribers pay them for their local service, the subscriber may choose to pay them for out bound long distance calls, and the IXC pays them for long distance calls terminated to the subscriber.

In the Internet economic model, the RBOC has to pay a backbone (e.g. Global Crossing) for Internet Access. They want to flip the model upside down so that they can be back at the top of the supply chain, just like they are in the voice world.

Posted by: Dave Siegel at January 30, 2006 12:53 PM

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