Slicing Telecom the Right Way

Mergers involving SBC and Verizon and a recent Supreme Court decision exempting cable-modem companies from open-access regulation have reignited fears of market domination in the communications industry. Even though technology is transforming the industry, some consumer and regulatory groups think that the US is still not far removed from the monopoly days of AT&T. Confusion about how best to reform over-regulated network sectors is not unique to telecommunications. Many reform efforts in networked industries have left critical components frozen. Electric utilities and airlines, for example, are now encountering problems similar to those that bedevil telecom. Despite regulatory miscues, new technology is carrying the day anyway. Competitive cable and wireless networks have emerged outside the regulated landline sector. These competitors are largely free to manage themselves as fully integrated networks. The cable industry is leading the way toward a product with a vertically integrated network and is offering voice, video and data in one service bundle.