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Monday, July 03, 2006

Today's New York Times: The Telecom Edition?

Today's New York Times carries two big telecom stories. First, on page one, the Times has an article entitled "Internet Calling Pressures Bells to Lower Prices." It's not clear to us what makes this front-page news, but the article discusses how VoIP calling plans offered by Vonage, SunRocket, Skype and others are pressuring the Bells to lower prices on traditional calling plans that are increasingly offered in bundled packages of voice, data and now video in some areas. The article also notes what we have discussed here before: specifically, that while the Bells now offer their own VoIP calling plans, they are not really very serious offerings. As the Times notes, "these services are rarely advertised. It is cheaper to cut prices [on landlines] than to try to win customers later from a rival." The article also notes (correctly) that "the Bells still control the bulk of the country's 180 million landlines and are far from giving up on what has been a giant cash cow." So much for "intermodal competition."

The other Times story is a Business section above-the-fold cover on AT&T's video rollout ("AT&T IS Calling About TV Service. Will Anyone Answer?") The article discusses the hurdles AT&T and Verizon both face in capturing enough video subscribers to pay for the cost of deploying their respective video networks and also highlights just how slowly and discretely the roll-outs are taking place, noting that just 5,000 subscribers in San Antonio will be able to receive AT&T's service. Contrast that reality with the hype filling the regulatory ether here in DC, where you can't avoid the Bell's non-stop TV, radio and print advertisements begging for regulatory "relief" as though the Bells were ready to offer video to millions if only Congress and the FCC would let them. The reality is very different.


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