Carrying On: In Memoriam: Big Telecom

Born of a desire to advance the public good, Big Telecom lost our trust when it acted like a greedy monopoly.

January 28, 2005

3 Min Read
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We all knew big telecom was stealing from us, but like indulgent parents, we let it tell a lie or two. We wanted to believe it when it promised to improve service. We forgave the pretense that bandwidth was scarce when we all knew it was as plentiful as rain.

Telecom often got into scrapes with the law. It acted in questionable and corrupt ways. Some of its leaders turned out to be criminals. It built an entire industry around defending itself in court, even writing legislation for lazy lawmakers. The large incumbents refused to fight with one another and instead created a cartel. Government tried to create competition, but like an overprotective mother, it couldn't just let the boys fight it out on the playground. It couldn't bear to see the incumbents get hurt.

Big telecom slept around a lot, professing love to many partners simultaneously, all the while fighting with them as competitors. It was abandoned at the altar more than once, and it suffered many failed marriages. It put on excessive weight.

The monthly letters it sent us in private were barely readable. It was always demanding more money, often in obscure ways, with its USF charges, 911 equalization fees, portability fees and emergency service fees. There was even a collections surcharge--in other words, a charge to cover the cost of taking our money. We got a headache every time we read those bills, but we just shook our heads and mailed the check, sensing we were being taken advantage of.

By 2005, it looked like big telecom had held the market by doing nothing and watching its competitors die. But just as local carriers were declaring victory, along came voice over broadband, then the cable operators and the wireless carriers paired up, and then the WiMAX vendors entered the broadband market. Toward the end, big telecom tried radical surgery--chopping off an arm here, lopping off a division there. But it could cut only so much before bleeding to death.Late in life, big telecom's mood turned sour. It spent endless hours writing angry letters to members of Congress. But the world left it in the dust. People didn't care about basic phone service; they wanted mobility and entertainment. In 2006, telecom attempted a final heroic effort to revive itself as an entertainment player, wiring local neighborhoods with expensive fiber. This only set off a price war with cable and satellite. The "triple play" of voice, data and video was a debacle, even worse than the 3G mess the wireless operators created when they wasted millions betting that people would pay through the nose for mobile data.

In the end, big telecom died a slow, agonizing death. Customers flocked to alternatives, and a new era of software-based telecom services commenced as voice became a Web application. In hindsight, what telecom should have done was fire the old guard of product managers and hire the smartest people it could find in the software industry.

Death is often sad, but the saddest thing of all is to die and not be missed. Rest in peace.

David Willis is a vice president of Meta Group's Technology Research Services. Write to him at [email protected].

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