Who Needs Line Sharing When There Are No Lines?
By Mike Masnick, Sat Aug 14 00:00:00 GMT 2004
While the debate about line sharing rages on in the US for DSL providers, will wireless broadband options make the entire question obsolete?
Competition is a funny thing, in that every time you think you've defined the boundaries of competition, someone finds a way to dance successfully completely outside the lines. In the US, there's an ongoing battle over the question of "line sharing" for the various telcos. The so-called Baby Bells own all the copper wiring into homes, and in an effort to increase "competition" were told to share those lines at regulated rates with others who could then offer service on them. Recently, however, the FCC ruled that they wanted to phase out line-sharing, buying the argument from the telcos that they were unfairly subsidizing their own competitors.
Of course, once free to price the lines as they saw fit, it became much more difficult for those who had been leasing lines to see the economic value in it. It even led to AT&T to decide to stop selling residential long distance altogether. Others, like Covad, are desperately trying to sign deals with the Baby Bells in an effort to re-establish a form of line sharing. Some of these moves have obviously spooked those back at the FCC, who are now talking about bringing back the line sharing rules, at least for a little while, despite having just written them off.
Still, the news isn't all bad. In fact, by making competition tougher within one space, the potential disappearance of line sharing has suddenly made alternatives much more compelling. Both AT&T and Covad have been making aggressive moves to offer VoIP telephone service as an alternative to traditional land line phones. Still, these deals require DSL broadband, which brings them back to the Baby Bells -- who may not be all that thrilled that these outsiders are now trying to take away their cash cow voice business as well.
Of course, when there's a bottleneck, the smart thing to do is find a way to route around the problem entirely. If getting access to lines at a reasonable price is a problem, why not skip the lines entirely? Already, some are pointing out that fixed line voice is facing increasingly strong competition from mobile phone plans as the pricing gap between the two has been rapidly shrinking. At the same time, telcos everywhere are drooling over the (possibly over-hyped) potential of WiMAX. Combine the two, and it may not be all that long until the political fight over line sharing seems like a quaint historical debate of little significance. One player to watch in all of this may be Earthlink. While this article only hints at Earthlink's plans, it's clear that it sees wireless connectivity as a way to differentiate itself from its competitors. Those competitors seem to be getting bogged down trying to offer additional content, rather than focusing on the connectivity. By going wireless, Earthlink and others can not only get around the entire issue by avoiding the telcos completely, but can start to offer options that focus on mobility -- opening up even more opportunity. Suddenly, the lines surrounding this competition appear to be no lines at all.