Why AT&T And Pals Are World-Class Bozos

Everything you've ever suspected about AT&T and other telcos is true: They're backwards-looking, technology-averse dinosaurs whose idea of progress is to fight innovation and try to dominate markets with monopoly power. That's essentially the conclusion of a superb investigative piece in BusinessWeek. The headline and deck of the article sums it up best: "The Phone Companies Still Don't Get It...They block competition and charge too much. You call this a communications revolution?"

The author of the piece was invited to take a look at a real-life consumer's home for AT&T's Project Lightspeed video-over-phone wire multibillion project. The only problem is that AT&T couldn't actually find a consumer, so they brought him to the house of the architect of Project Lightspeed to show off the service.

The highlight of the visit: The TV remote, AT&T officials claim, changes channels faster than do cable remotes.

Oh, and unfortunately, the service can't record one show while you watch another -- something that Tivos and cable systems can already do.

But it sure does change those channels in a jiffy, doesn't it?It's no accident that telcos lag behind the rest of the world in innovation. They don't spend on it.

The article notes that AT&T had revenues of $44 billion last year, but spend only $130 million on research and development, and that Verizon had nearly $80 billion in revenue, and didn't even bother to mention the word "research" in its annual report.

So it's no accident that in the words of the article, "One of the signal facts of the communications revolution is that virtually all the new technologies that made it possible were developed outside the phone world."

The article goes on to note what we already know -- phone companies use their lobbying muscle to try and squash competition, for example by trying to kill municipal Wi-Fi.

In the long run, there's no future for these dinosaurs if this is the way they continue to do business. Phone calls will relatively soon be free thanks to VoIP. Free Wi-Fi is popping up everywhere.And if the best thing that telcos can tout about their video service is that its remote is faster than the competition...well, I'd say it's sayonara time.