So we are at the 20 year anniversary of the Telecom Act of 1996. So many companies have come and gone. So many billions have been invested. And yet the largest telecom providers are Comcast, AT&T and Verizon.
Lots of consolidation - just ask Birch, Level3, Windstream, GTT, Zayo or CenturyLink. But really has anything changed?
There is a lot more fiber in the ground. AT&T just announced 500,000 miles. Lots of lit buildings. Birch just said they touch more than 80,000 commercial locations. I would imagine any of the Top 5 MSOs touch at least that. The one thing that has changed is who owns the small business market. Today, that is the cable company, not the ILEC (at least in NFL cities, maybe not in rural America).
The small business voice market seems to belong to the independent OTT providers like 8x8, RC, Grasshopper and Vonage.
But the CLEC sector borne from the TA96 seems anorexic. VZ and AT&T have more than $75 Billion in Quarterly revenue, which is more than all the CLECs annual revenue combined. In a Quarter. The billion dollar CLECs - XO, Intermedia, Paetec - are all distance memories. Yeah, XO hasn't been bought yet, but it has faded from memory. The DLEC group that actually started the business DSL market all went bankrupt and were acquired by the Big Telcos.
The fiber pioneers - Yipes, Cogent, MFN, Williams - all went BK at some point. So did MCI after a spectacular financial mess.
The UNE-P players - Supra, Z-Tel, IDS, ITC, MacLeod - all gone. The largest IXCs - MCI, Sprint and AT&T - are no longer. MCI is now VZB; AT&T was bought by the Baby Bell, SBC that consolidated most of the Baby Bells back into AT&T a little more than 20 years after they were broken up by the Judge.
Remember when FREE was a threat? AOL, Bluelight, NetZero, Muni Wi-Fi (from EarthLink). Today, free is a model! Ask Facebook, twitter, snapchat, Whatsapp, Skype or almost any SaaS company.
Zayo, Level3, Birch and let's include Wind and C-Link ($2Z + $8L + $1B + $6B + $18C) - throw in the $1B from EarthLink (which will be less since shedding the IT business) - and you still only have $19B in a year. All of the money is flowing to the Big 2 RBOCs and the cablecos - still. And since AT&T bought DirecTV, yeah, still.
Unlike Howard Homonoff in his review, I think that the upstarts have been the ones who pushed the establishment forward. The ISPs and CLECs that forced the Duopoly to learn to compete, who did the real work of bringing the Internet to the people. It was also the upstarts that taught real world lessons to the Duopoly - lessons about fiber and DSL and business Internet - and yes even about Converged Networks.
As we start the next 20 years, it will be Amazon, Google, Apple and Microsoft who define some of the race. IOT may change things, but you still need a network. As much as the Big Two Telcos hate to be dumb pipes,they will take your money. (And provide crappy support.)
A couple other points.
Wireless porting between Sprint, AT&T and VZW is done in hours via Syniverse. Wireline porting is still anyone's guess and is measured in weeks, not hours. Why?
Cable went from the lowest margin business - TV - to the highest - voice, while telcos did the opposite. And probably should have left TV alone.
Comptel changed its name to Incompas. CEO Chip Pickering talks about the anniversary here. " I want to point out the incredible benefits of the legislation to the economy and society -- from the creation of new companies, new technologies and entire new industries to the technology solutions that have risen from the Act to help share information and reshape our world."
The sharing of the network elements is all but gone. It is a race at either Layer 1 (network plant) or Layer 7 (apps). No one owns both.
No ENUM. No VoIP Inter-connection. Oh, well.
For the channel, it used to be all about voice. Now it is mainly about data, Internet and cloud.
TA96 was about a resale model - unbundling or wholesale - that would lead to facilities based competition. That didn't happen so much. It was all about voice though. Now way more about data/Internet/Network than voice.
Gary Kim shows the decline of access lines graphically here.
There was frame relay and ATM networks that were supplanted by IP-VPN, MPLS, VPLS and soon by Ethernet private line if cable has their way.
It was AOL and Yahoo 20 years ago. Now VZ owns AOL; Yahoo is for sale and Google is the giant.
Gary Kim point
