The Telecom Story

How did we get here

For more than 40 years, IBM dominated all aspects of the computing business.  IBM maintained their dominance in part by tying application software to hardware and individual hardware components together in tightly controlled proprietary packages.  In the mid-1970’s, IBM misread the growing demand for smaller, more accessible computing services.  A grass roots revolution to create “personal” computers with interchangeable components and application software that could run on multiple vendors’ hardware platforms grew in basements and garages across the country.  This “open” model was a disruptive force in the computing world and ultimately led to the marginalization of mainframe computers and of IBM as a computer manufacturer.

Today, a similar revolution is growing in the telecommunications industry.  For decades, Bell Telephone, the “Baby Bells” and a handful of cable providers have maintained monopolistic control of telecommunications networks throughout the country.  While the components to build a telecommunications network cannot easily be stored in one’s garage, many municipalities, cooperatives and other organizations are recognizing the growing grass roots demand for true consumer choice on true broadband networks.  The disruptive business model represented by public-private partnership open access gigabit fiber to the premises networks stands as the best model to answer this grass roots demand and to revolutionize the delivery of telecommunications services.

Much like the rail systems of the late 1800’s, today’s advanced broadband infrastructures represent a means by which communities may participate in, or find themselves left out of, the global economy.  Many communities are discovering that critical telecommunications needs in their business and residential markets are going unmet.  Incumbent network owners consume limited public easement space with monopoly controlled networks.  Historic telecommunications business practices and market forces encourage these private companies to work towards broadening their revenue streams by extending their natural monopoly through vertical integration leading to cable companies acquiring content producers and traditional telephone companies merging with cellular providers.  Quarterly reporting requirements demand behavior that maximizes short term profits.  This leads to incumbents delaying infrastructure upgrades – not only to avoid capital costs but also to maintain the appearance of bandwidth scarcity allowing companies to charge higher prices for lower quality than found in many other countries around the world.  However, advanced communications infrastructures are essential for the current and future economic vitality of communities.  Communities have begun to see the need to break the cycle of monopoly driven scarcity and vertical integration.  In the 19th century city councils struggled with ways to entice the railroad barons to include them in transportation systems.  In the 20th century cities and towns became experts at deploying critical infrastructure including, roads, electricity, and water.  In the 21st century public policy demands that rather than begging and pleading with the incumbent providers, municipalities apply their infrastructure skills to improving broadband availability and competition.