Revisited: the case for shared last mile infrastructure

We have a new FCC on board that is busy meddling in every sector of the communications market, save one. That one item is the choke hold of the duopoly and is the single largest growth limited in the US economy after the taxes and federal debt. Yes,  I’m about to rant on the virtues of a strongly enforced unbundlind of the local loop again.

While the rest of the world is preparing for 4G mobile wireless to augument its fatter fixed line access, in many major American cites, 4G will meet or surpass the fixed line capacity. The reason is the lack of investment from a telco /cable duopoly that has no real competition.

In France, the last mile is open to any competitor and no matter what you hear fromthe duopoly suits and thoer fed lap dogs, all of the players in that competitive market are making money. The real eye openier is how much the average French househould gets for far less than we spend here:

French broadband providers like Free.fr, Numericable, and SFR have just one offer. It costs €30/$45, and for that you get everything:

• Cable and DSL internet at 20-30Mbps (and DOCSIS3 or fiber at 100Mbps in some towns)
• Free telephony to 100 nations (mostly to fixed lines; calling mobiles costs more)
• HDTV with a HD-DVR

(Some ISPs like Numericable and France Telecom/Orange have offers for €20 for Internet + telephony, or Internet + TV, but the majority of customers choose a €30 pack.)

This isn’t all you get. More is included, like free access to WiFi hotspots, music jukeboxes, computer games, your own personal television channel for live TV, etc. We’ll touch upon these innovations in more depth below.

The pioneer of this business model was Free.fr. Led by its maverick CEO Xavier Niel, it introduced the plus simple model in 2002 into what was then considered a lagging broadband market. Now Free is the second largest ISP in the country, it is profitable (with 4 million subscribers), and it boasts extremely low churn rates below 0.01 percent a month. One could almost say that Free’s subscribers only give up their subscription upon death or moving outside of the service area. (Ars Technica)

If the new FCC chair really wants to make a difference in broadband, he’ll work to reinstate local loop unbundling in the United States.  No stimulus pork, broadband maps or net neutrality laws needed. In a truly competitive market, the bad business practices of the duopoly will change instantly. Of course that also require  less central planning and control in Washington DC. No one really believes the FCC or our current Congress and President is interested in that. Far easier to draw very expensive maps and put a shiny new “net neutrality” clown suit on the inadequate system we already have.