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April 12, 2006
the age of VON? Not so fast
As we get near to the IPO of Vonage, a question that needs to be asked is what is the competitive concerns of having a service that forces the ILEC or Cable company to just be an ISP.
I believe that the Internet inherently wins, so that makes Vonage a good choice. However, the customers are reluctant to see phone service as anything other than what already exists. This makes the issue not net neutrality but communication bias.
So ask your friends who are not phone folks if they use VoIP? The answer probably is "No". So when the answer starts to become "Yes" Vonage will have to morph like every other "Phone" company. Unlike most however the first question wont be, what do i do with this network?
Posted by carl at 10:57 PM | Comments (0)
Revestiture the Walmart of our times
When at&t bought BellSouth it had completed the cycle. Not a single Divestiture entity had not been changed. When divestiture occurred we were in a million. We thought we were the Walmart of our times.
Now the combined assets represent have about 1/2 the number of employees they did at divestiture, but probably have represented new market opportunities for so many more people as a result of divestiture. Fundamentally, the world is much more interesting with the market being competitive. I have been told that AT&T had become so bloated before divestiture that in truth it was a something they should have been seeking.
So I am willing to go along with the fact that the world was better off with forcing the Bells to breakup. So why is today any different than all the rest? Why should the revestiture of the parent and child be welcome?
I can think of a couple of good reasons.
1) The arbitrary distinction between local and long distance was an anomaly that had to die. Since Divestiture the cost of long distance delivery has made the profit margin disappear. So IXCs had to die.
2) The country has shrunk in its social distinctions. State oriented divisions are no longer appropriate. When I first came to work for the Bell System, I was a New Jersey Bell employee. My logo and work were totally oriented to the state. Divestiture gave me a regional leader that turned me into Bell Atlantic of New Jersey. These days I think the company only has state titles in the title of employees.
So the disruption of divestiture allowed the break up to rejoin the companies in new ways. The ads I see in California are the same ones I see in New York and Florida. The marketing is more price driven. So perhaps now the companies are more Walmart like then they were predivestiture.
IMHO the goal of choice was not obtained if we expected to see something new. Only if we wanted something cheaper.
Next time - the age of VON? Not so fast.
Posted by carl at 09:36 PM | Comments (1) | TrackBack