For faltering fixed wireless carriers, April proved every bit as cruel as T.S. Eliot decried in The Waste Land. Eliot, it turns out, was as much a prophet as he was a poet. Local telecom competition is quickly becoming a vast dumping ground.
Teligent Inc., Winstar Communications Inc., XO Communications and others continued to get whacked on Wall Street in the month that ends today. Advanced Radio Telecom Corp. already has one foot in the grave.
These local competitors were to be shining stars of the new deregulatory, pro-competitive landscape sketched out by the 1996 telecom act. They would challenge the Bell monopolies for local market share. Those who insisted the telecom act was a success-or eventually would be-pointed to high-flying fixed wireless start-ups as proof. Maybe it was a big act.
What happened? For sure, high-tech and telecom sectors generally are being torched by investors. Did fixed wireless firms have bad business plans? Did their technology not work?
This much we know: From the start, fixed wireless carriers have been up against well-heeled telephone companies that have monopolized local markets for more than a century. Their deep pockets have the power to change hearts and minds on Capitol Hill and on state public utility commissions.
The Baby Bells are hardly babies in the corporate world. Several of the seven original regional Bells have merged in the five years since the telecom act’s passage and in the 17 years since AT&T Corp.’s breakup. If alive today, what would Harold Greene, the judge who oversaw the AT&T divestiture, say?
When Teligent, Winstar, XO, ART and others are not knocking on doors for business, they’re having to fight in court, in Congress, at the Federal Communications Commission and elsewhere for access to rooftops, utility poles, etc. Now they’re all punched out.
There’s nothing cruel about April for the Bells, though. Springtime is wonderful!
Quarterly earnings look good. Last week, House Commerce Committee Chairman Billy Tauzin (R-La.) and Rep. John Dingell (D-Mich.) introduced broadband Internet legislation that critics claim would eviscerate the Bell long-distance restriction in such a way as to remove any incentive for opening up their local markets to competitors.
Meanwhile, the FCC, under new Chairman Michael Powell, is sending daily deregulatory signals that include possibly lifting the spectrum cap. The next Justice Department antitrust czar-Charles James-appears to be of the same ideological ilk. Merger and acquisition time could be right around the corner for Verizon Wireless and Cingular Wireless, two of the nation’s top mobile-phone operators. What makes spring really wonderful for Bells is that they can take advantage of yard sales overseen by bankruptcy courts.
The competitive outlook is quite gloomy until you consider that AT&T’s Mike Armstrong and AOL Time Warner’s Steve Case also want to rule the world.
