The Times They Are A-Changin'
By Stephen Lawton
In the mid-1950s, folk singer Pete Seeger wrote the song, "Where Have
All The Flowers Gone?" Today, with apologies to Pete, I offer this ditty
to the broadband providers throughout California:
Where has all the broadband gone? High-speed access;
Where have the providers gone? Bankruptcy court;
Where has all the broadband gone? Gone to telcos every one;
When will they ever learn? When will they ever learn?
Despite what some marketeers and sales literature says, broadband, the
promise of high-speed bandwidth for all has never really been a "business."
It's a product - a piece of a pie, just like every other piece of a larger
Some Internet service providers never learned that basic lesson of economics:
if you sell just one product at a loss in hopes of making money later
on volume, someone bigger than you will sell the same thing you do for
less, but make money on their other products. Sounds a lot like the problem
some dot-coms faced - and why they're no longer with us.
If you're like me, you've had at least one of your broadband suppliers
go out of business in the past year. I've had to change providers four
times in the past three years.
First I had Flashcom - a decent provider, if not the most technically
astute. The service department installed an IDSL line in my home, 144Kbps,
instead of a higher-speed ADSL line, because they miscalculated the distance
from my home to the central office. When Flashcom went away, I signed
up with another service provider - InternetConnect. I figured this was
a pretty safe bet; after all, its main source of income was providing
virtual private networks and other business services, and DSL was a just
As a backup, I also got cable modem service through @Home and my local
cable service. Alas, @Home, which tried to grow by acquiring the Excite
portal, failed, having never really gotten over that investment. The company,
which was one of the largest cable ISP service providers, closed its doors
for good in February after discontinuing services this past fall. InternetConnect
also shut its doors, selling off its assets to Covad Communications in
bankruptcy court in January.
Drat. That means I have to change my broadband supplier once again. In
some ways, having Covad as a broadband ISP makes a lot of sense. After
all, the upside to this is that the wholesaler and retailer of the broadband
service is the same company. But Covad has had its own financial problems.
To its credit, however, the company recently dug itself out of its own
In the larger scheme of things, what does this shakeout mean? Is DSL going
away? I doubt it. Will DSL continue to be offered by small ISP? Sure,
there will always be the devil-may-care entrepreneur, but don't expect
the service to be cheap. As DSL settles in to the telephone companies'
list of services and smaller DSL providers drop like flies hitting a bug
zapper, you can expect prices to rise and service to be, well, about what
you'd expect from the monolithic phone company.
Judge Harold Green might have broken up AT&T in 1982, but many of the
Baby Bells have merged again and the new "Baby" Bells are quite a force.
When you look at the overall health of the telecommunications industry,
however, what you find is a huge discontinuity with the conventional wisdom.
Today, more and more people have multiple phone lines in their homes.
They also have cell phones, pagers, and, yes, maybe even a fax.
The problem is, even though consumers are buying up phone lines by the
gross, telecom companies are in a financial funk. Companies like Nortel
Networks, WorldCom, Nextel Communications and JDS Uniphase are seeing
their stock prices wallow well below $10 a share. Global Crossing, the
fiber optics network company, once saw its stock price at $64.25; now
it's worth nothing.
As much as I hate to admit it, the telcos now have the power to control
broadband; maybe they always did. It was great to root for the little
guys, the ISPs that sprouted up to sell high-speed services. Unfortunately,
many are out of business today and DSL is getting a black eye as an untrustworthy
technology - not for technical reasons, but for economic ones.
So, with apologies this time to Bob Dylan, I offer this final thought
on the future of DSL:
Come senators, congressmen
Heed your constituents' call;
Those DSL vendors
Are starting to fall;
And your broadband access
Has rudely been stalled;
There's a telco battle
And it's ragin'.
It'll disrupt your Web access
And your Internet calls;
For the times they are a-changin'.