Cox Crow

Asking the Stupid Questions Since 1971

Lose the Lines, not the Customer: Stemming Access Line Loss

Access lines are lost

1. to other local service providers, such as AT&T, MCI WorldCom, and RCN;
2. to wireless providers, because wireline rates are grossly higher per call than cellular rates;
3. to broadband, as homes are not acquiring additional lines for Internet access and teenagers (see also #2).

The first can be addressed through competitive pricing and higher service quality. The second can be addressed through competitive pricing and bundled wireline and wireless service, particularly flat-rate inter-LATA and long-distance calling plans — this distinction between local and regional rates is less and less viable. The third can be addressed by providing additional services that do not care whether the wire is cable, xDSL, or other broadband service.

In the long-term, the RBOCs best hope lies with eliminating the last mile bottleneck, by deploying scalable infrastructure such as fiber to the home. In concert, they need to transcend their geographic limitations, not through entering the long-distance market and manipulation of regulation, but by breaking their vertical integration, embracing their role as a common carrier, and providing the means to build new services outside their control.

The alternative is to reduce the utility of the network in order to remain in control.