The Telecom Wars

Posted: 01/1998

With the coming of the new year and everybody full of good cheer–or maybe just too
much food and drink–this seems like a good time to talk about cooperation.

The need stems from conversations about negotiating agreements among interexchange
carriers and incumbent and competitive local exchange carriers.

There isn’t much movement to report. The industry appears caught in the midst
of a regulatory melee on the verge of overrunning commonsense. And spillover seems to be
fogging otherwise clear minds, with providers unwilling to come to the table and address
problems that are hindering their own growth efforts. Never mind the civilian victims that
will result if the whole mess blows up.

It’s a particularly bloody war. So the question becomes, what strategy guarantees you
will win or at least avoid getting killed? Anyone who doubts there will be casualties need
only consider some recent high profilers–and the walking dead already marked to join
their ranks.

A somewhat cynical friend said telecom is a paranoid business to be in, and if you’re
not paranoid, you’re not in the telecom business.

Maybe a good strong dose of paranoia is what everybody needs.

But how can we avoid escalation if the parties are too paranoid to talk to each other?

Forget it, another said. Cooperation is irrelevant. There are a finite number of
customers. They are the trophies of war. Telecom providers know organic growth is, at
best, a myth. So they have two options: Buy their customers or take them from someone
else.

In the meantime, while the generals are cutting consolidation deals in their war rooms,
guerrilla sharpshooting by their lieutenants is picking off customers one at a time.

And once the local number portability missile is launched, look out, he continued. LNP
will destabilize everybody.

When was the last time you picked up your phone and you didn’t get dial tone, another
asked. If the technology is destabilized for whatever reason, we could end up with a
telephone system comparable to British Guyana’s.

Still another said he gets calls almost daily from people getting into local dial tone
who ask if they can bill their calls through the local regional Bell operating company.
Apparently, they wandered into some kind of chemical weapon that renders its victims
stupid or at least clueless.

Finally, we turned to AT&T–aloof, proprietary and the carrier that stands to lose
the most. Isolationism just won’t work these days.

From the Trenches,
Debera Bell-Beam
Senior Managing Editor