Michael Dolan Dot Com

Sunday, August 7th, 2005

Big Changes Coming for Telco Internet Access

Just in from Congress. Phone companies providing DSL services are no longer required to lease their lines to companies at deep discounts. What does this mean? I think initially, we may see a slowdown in price competition for DSL. However, cable Internet, wireless, power line Internet and other options will likely keep phone companies in check over the long run. The reality is the old rules dis-incentivized phone companies to upgrade their networks – they would have to invest huge capital sums only to find themselves required to lease the new networks at deep discounts. Congress made this change, therefore in order to aid the next generation of investment for future services. It remaisn to be seen what the fallout of this change will be. It’s undeniable many small ISPs will be squeezed out of the market. The upside is we may actually get closer to catching up with Japan if these telephone companies start doing wireless like WiMAX…