Men Behaving Badly

I'm a Verizon DSL customer and, on balance, a happy one. The service works very well most of the time, providing our family with high-speed access to the Internet. It's not as fast as a T1 line, but it's about $950 a month cheaper. From Verizon's point of view, providing this household with high-speed Internet access for $49.95-a-month is almost certainly a money-losing proposition, but it's a great loss leader because with our DSL line comes local and long-distance telephony. And that is, I can assure you, a mini-ATM for Verizon shareholders (which is one reason we own Verizon stock).

Recently, the House of Representatives passed legislation that makes it easier for the Regional Bell Operating Companies (like Verizon) to dominate high-speed Internet access. This legislation will probably die a much-deserved death in the Senate, but the larger point is that the bill is completely unnecessary. And here's why.

Consider our home. We have two telephone lines (one for voice, one for fax), DSL service and DirectTV. We also have two mobile phones. The cost of the mobile phones is $39.95 each. The cost of the two phone lines (including all long distance and local charges) is about $110 per month. In another year (so they say), our mobile phones will likely provide us with crystal clear voice communications, even in the basement. So we can save $110 per month by getting rid of Verizon local and long distance. We could save that money now, except the reception on our mobile phones isn't quite good enough.

But what really keeps us tethered to Verizon local and long distance is the DSL line. It's there, it's right next to the computer, which is right next to the phone, which is really a base station for a bunch of cordless phones around the house. The reception is great, the speaker phone works perfectly, I'm listening to my messages right now as I type this item. The truth is we probably won't "go wireless" as long as we have DSL. If you look at the households that have DSL, virtually every one of them continues with local and long-distance land-line telephone service.

So who needs legislation that enables the RBOCs to ramp up the build-out of DSL (without meddlesome competition), when protection of two of their most important revenue streams (local and long distance) all but requires that they build out DSL as fast as they can do it? Thomas Weber, "E-World" columnist for The Wall Street Journal, has an excellent piece today on this and other legislative meddling with regards to the Internet and information technology sectors. After making hash of the RBOC arguments with regards to DSL, Weber slams Sen. Fritz Hollings (D-SC) for pandering to the Entertainment Industry with the "notion that computer makers should be required to build copy-protection technology into all PCs, lest Hollywood find itself Napsterized." (emphasis added). The important point Weber makes is that the Internet/information technology sectors have done very well by their customers without a lot of government regulation and interference. Fritz Hollings and Tauzin-Dingell will make things worse, not better.

PS: Those seeking more information on Hollings and the Entertainment Industry should check out Instapundit, who has been all over what he calls "Hollingsgate" from the git-go.