Gigabit Cities

SlideshowFCC Plan Could Stymie Rural Broadband

NTCA CEO Shirley Bloomfield
Addressing members in July meeting in Portland, Ore.
Addressing members in July meeting in Portland, Ore.

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mhhf1ve 8/6/2015 | 6:11:13 PM
Re: Too much of a bad thing BTW, seven, where's your blog? 
mhhf1ve 8/6/2015 | 6:07:16 PM
Re: Too much of a bad thing What's stopping a private equity firm from doing what you propose without the fed govt as a partner? (It's probably not a great investment? It might be prohibited by state laws...?) 

Maybe there's a better solution? Is there a vendor that can unify all the little telcos with an infrastructure-as-a-service product to get all the little guys more reliable and efficient? Leave the govt out of your plan...? 
mendyk 8/4/2015 | 2:36:39 PM
Re: Too much of a bad thing seven -- Yes, in theory that holds up. The questions are whether the smaller operators want to vacate, and whether there is an aggregator that wants to take on this kind of business. There's also the issue of state regulations, which can be hugely restrictive with little apparent rhyme or reason.
brooks7 8/4/2015 | 2:28:52 PM
Re: Too much of a bad thing So, here is the thing.

Suppose the Fed Gov stepped in with some corporate partners (say a P/E firm or something like that) and picked up some adjacent properties and added together some of these companies to the point that they are now over 100K - 200K lines (say the size of TDS).  Now you have enough bulk to be able to build a company around.  

So would the little telcos (the 10K or so line guys) go away?  Yes, but a better sounder structure might emerge.  The big telcos get to dump some rural properties (win).  The little telcos get stronger (win).  Just requires some jiggling and some will.


mendyk 8/4/2015 | 2:09:11 PM
Re: Too much of a bad thing The difference with rural telcos, at least in most of the US, is that the big operators really don't want this business, at least on the wireline side. This is probably the biggest reason to maintain some sort of federal oversight and regulation. That said, there's probably a strong case to be made for small wireline operators going away once mobile broadband networks are in place.
Ariella 8/4/2015 | 1:45:01 PM
Re: Too much of a bad thing <But there's something fundamentally -- dare I say it -- American about them, > @mendyK I know what you mean, but it today's economic climate, they do seem doomed. I just heard another report today about small mom and pop type businesses being squeezed out by tho bigger chains with deeper pockets. The same principle applies across all industries.
mendyk 8/4/2015 | 11:56:03 AM
Re: Too much of a bad thing If there's a way to collectivize smaller rural carriers into a reasonably efficient and effective operating group without involving direct central governmental oversight if not outright control, I don't think anyone has found it yet.
brooks7 8/4/2015 | 11:40:47 AM
Re: Too much of a bad thing Carol,

I agree with your contact.  As things get more complicated, the IOCs will have to hire and manage lots of IT teams that they have no way of obtaining.  Seems like the right answer.


I get it.  I sold a lot of stuff to the IOCs when I was at AFC.  I like the people.  I like the notion.  The question I have is about practicality.  We have 2 problems:

1 - Our large carriers don't get good ROI in investing in Rural Properties.  They lag the IOCs in deployments.  So, the FCC and State PUCs need to set up rules that make this work for them.

2 - The rules that make it work for the big carriers probably crush the smallest of the IOCs.  

The Rate of Return carriers are a small subset of the IOCs.  They in turn are a small subset of the total line count of the IOCs (much less the US).  Many IOCs converted to Rate Cap Carriers.  So, is there a way to make these smallest of companies (many of which are municipal co-ops aka muni carriers) bigger?  


mendyk 8/4/2015 | 8:35:45 AM
Re: Too much of a bad thing seven -- In a lot of ways, the mom and pop telcos are analogous to family farms in the era of big agribusiness. In terms of pure economics, there are more reasons for them to be subsumed than there are to keep them going. But there's something fundamentally -- dare I say it -- American about them, warts and all. And of course big businesses have their own levels of inefficiencies.
cnwedit 8/3/2015 | 6:53:33 PM
Re: Too much of a bad thing I just had an interesting conversation with someone from one of those companies and he is predicting some substantial change when they get around to looking at virtualization. Instead of all of them doing themselves, he expects a group of wholesale providers to step up and essentially do it for them. 
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