Alternate Route for the Last Mile

Last week we got the news that the traditional telephone companies will hold on to their key monopoly -- the last mile into your home. The Associated Press quoted Gene Kimmelman, senior director of public policy at Consumers Union (publisher of Consumer Reports magazine) as saying "This decision is the final nail in the coffin for local telephone competition." As Dan Gillmor writes, "You expected a different result?"

But wait a minute, this might actually be the best thing that ever happened for consumers and the industry.

By protecting this monopoly of the last mile of copper, the RBOCs are creating an enormous incentive for the marketplace to innovate around them. Already consumers are flocking to mobile phones as an alternative to the RBOC's fixed line piracy. As wireless technology continues to get better and better, consumers will need that last mile of copper less and less. Writer Paul Kapustka, blogging for Networking Pipeline put it this way, "traditional telcos are looking down the tunnel at the new access methods, and it's probably an oncoming train, not a light, that they see." He was referring to colleague David Haskin's article Wired-Wireless Convergence Threatens Telcos.

I was recently chatting with a silicon valley VC who told me that he gave a talk at the UC Berkeley Haas School of Business and took that opportunity to survey the audience on the technologies they used to get phone calls and access the Internet. Almost all had switched to cell phones for calls and cable modems for Internet access.

Between wireless, cable, and powerline options, the industry can and will build an alternate route for the last mile.