I’m not quite to my Julian Simon-style wagering stage on all the wonderful promises being made about phone company TV service saving North Carolina consumers money. But I’m getting close.
The key is understanding why the telcos and their silent partners, the state utility regulators, have gone charging down the IPTV path up in Raleigh. On the surface, it seems that the phone guys want to be able to compete with cable TV offerings. Cable now bundles video, data, and voice on one wire — the triple play. Why not telcos?
Fair enough, but the phone guys were already selling bundled voice/data/video services with satellite TV providers, often with features that IPTV will not soon duplicate. So there’s that little off-message factoid.
No, the primary drive for legislation was not the actual services marketplace, it had to do with changing the regulatory backdrop for info services. This has been happening at both the federal level and on a state-by-state basis as the telcos roll out a truly impressive display of lobbying might.
As the oldest info technology, the telcos are also the most heavily regulated, which reflects the best practices of New Deal-era thinking for a 19th century technology. This state-of-affairs bothers the phone guys to no end, but they have also made something of a virtue of it by investing in lobbyists and lawyers and other non-technical forms of competition. For example, they have used billions in universal service fees the are required to collect from their customers to build up massive universal service funds, which function as legal bribery pools for state regulators and officials.
Two important things to know about the USFs: The cable guys do not pay them and the funds are shrinking. The funds are shrinking because consumers are buying fewer telco dial-up land lines. This scares the mess out of both the telcos and state and federal regulators.
Just last month the FCC moved to plug a hole in USF money by voting to impose the fees on voice over IP telephony and to increase them for cell phone providers. Both moves had been long sought by the phone guys and their lobbyists. Both moves expand regulatory controls on cell service and, most certainly, on Net voice traffic.
Why? Here’s what Mark Lambert, a former Iowa utilities commissioner, says:
Nationally, control-freak utility regulators and the state and federal level have really been bothered by the idea of a) competition in telecommunications and b) a telecommunications method beyond their regulatory control. They will keep trying and trying to increase their regulation of VOIP and the Internet, justifying every little idiotic step like this one.
With the this in mind, think of the changes in NC law not as a move to increase competition in TV offerings, but as part of a bid to restrict and regulate non-telco voice and data offerings in the state and nationally. In fact, forget TV.
The telcos do not so much want a level playing field on which to hawk TV to consumers, they want to establish the principle that a wire is a wire is a dish is a cell. Everyone is the same, so everyone should be taxed the same (that notion is in the new NC law), should be regulated the same, and everyone should pay into the USF the same. That is the Holy Grail of telco public policy: All the info technologies are just as hobbled and festooned with goverment hangers-on as they are.
My prediction: The telcos will make a token effort to sell TV services, and not any time soon. All the while, though, they will press the idea that cable phone services should pay USF fees too. In any event, downward telco pricing pressure on bundled
services — currently in the $100-$125 per month range for voice/data/video — will be no where to be seen.
And one clear indicator of where we are heading and why: Once Bell South gets IPTV up and running, will North Carolina consumers be able to purchase just video services, or will they also be forced to buy a USF-charging voice land-line as well?
I know my bet.
