[For
the Press]
Press Release
Telecom Group
Urges FCC:
Let Telcos Fail Fast
Letter to Chairman Cites "Natural Process"
Washington, DC, October 21, 2002 - An influential group of Internet analysts and business executives today urged the Federal Communications Commission (FCC) to let failing telecom companies fail, and "fail fast." The 44 signatories, led by independent telecommunications analyst David Isenberg, said in a letter to FCC Chairman Michael Powell that Internet-based technologies are subsuming the value embodied in the traditional telecommunications networks. According to the group, "This is causing the immediate obsolescence of the vertically integrated, circuit-based telephony industry of 126 years vintage. [Telephone company] bonds used to purchase now-obsolete infrastructure assets have become (or are inexorably becoming) bad debt."
The group urges the FCC to resist telephone company pressure tactics to prop up businesses that technological progress has made obsolete, in order that advances in newer, better forms of communication not be stifled. Calling the current telecom troubles "not a disaster, but a natural event," the letter says a "revolution in productivity and human benefit as big as the agricultural and industrial revolution" could result.
"Too many business analysts are talking about bubbles and over-leveraged balance sheets as the root cause of current telecom troubles," said Isenberg, commenting on the letter. "This confuses the symptoms with the disease. These things are just symptoms of the fact that Internet technology has made phone companies obsolete. If the government tries to treat the symptoms, the American economy will actually stay sick longer than if the natural process is allowed to run its course."
The proper course, according to Isenberg, is to write down all circuit-based telephone assets to reflect their obsolete value, and re-capitalize the industry with as little government intervention as possible. "People will continue to use the existing telephone network for years to come, just as people still rode in horse-drawn carriages for years after the automobile was invented. But the government never subsidized buggy whip makers, and it should not subsidize telcos now."
Included in the letter are four recommendations to the FCC:
Acknowledge that non-Internet communications equipment, while not yet extinct, is economically obsolete and forbear from actions that would artificially prolong its use.
Discourage attempts by incumbent telephone companies to thwart municipal, publicly-owned, and other communications initiatives that don't fit the telephone company business model.
Accelerate FCC exploration of innovative spectrum use and aggressively expand unlicensed spectrum allocation.
Isenberg said that this point of view has evolved over the last several years among the signers, and has been reinforced by market activity. "The results of the new Internet technology on the old are there for all to see in the industry stock prices. We just want people to think clearly about how to move forward for the greatest public benefit."
Contact:
David Isenberg
Principal Prosultant
Isen.com
1 908 875 0772
1 908 456 4006
isen@isen.com
Matt Oristano
President
Alda Inc
1 203 389 7407
matt@aldainc.biz
David Weinberger
Editor In Chief
Journal of the Hyperlinked Organization
1 617 738 8323
self@evident.com
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Links
Contacts:
David
Isenberg
isen@isen.com
1 908 875 0772
1 908 456 4006
Matt
Oristano
matt@aldainc.biz
203 430 6500
203 389 7407
David
Weinberger
self@evident.com
617 738 8323