SBC’s VoIP end run

Someone at SBC Communications got to be nominated for the best media strategist of the year award. What a masterful strategy! Announce VoIP plans, then to layer it thick, announce IP-TV plans, and while the whole world was gushing over you (SBC) embracing the future, stick a knife in the back of every potential VoIP rival with a simple, relatively little know yet lethal regulation. In other words, thanks to a regulatory filing, SBC has brought to a quick end the “lets not pay any termination fees” party that VoIP upstarts had started.

There is shock and outrage in the blogger community. I am not a little bit surprised. My stance has been that Bells will win the VoIP sweepstakes. Now take this ruling as an example. Folks at Vonage and Sunrocket are busy building their brands and are spending their money on advertising. AT&T, MCI and Sprint are financially hobbled and are basically saying: we got no friends in Washington anyway. So where are the millions of dollars needed to spend on lobbying efforts. Think of this as a classic Silicon Valley hallucination. The techies believe innovation will change the world. Eventually… meanwhile Washington, the soft dollars, and powerful groups control the future.
Bells have what they want: no regulation and interference from pesky state officials. They have monopolistic control of the last mile of today and the future. They have near total ownership of the wireless waves. They have now basically imposed the old order on the world, and they are going to print money. Good for their share holders, too bad for venture investors. It happened with DSL, and it will happen again. Why does anyone get surprised by all this, I don’t get. Listen up guys: when Bells’ livelihood is threatened they firebomb the opposition. As simple as that. I am told Michael Powell is very upset about this end run by SBC. He cannot do anything much right now.
So you think, it is over. Think again. Many overlooked the fact that Cisco bought a company called P-Cube recently. One of the things P-Cube can do is prioritize the traffic flows on an IP network. SBC could use it and lower the priority of the traffic coming from say Vonage or AT&T. Nothing illegal here: SBC’s network and it can do pretty much what it wants on its own network. Poor quality, lags, dropped packets and soon Vonage customers could be switching to SBC VoIP: which is more expensive, has better quality and of course is highly profitable. Do I like it? No! Will I use it? Of course! Like I will have an option. You thought I was joking when I said monopoly for next 100 years.