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October 30, 2005

The telco mindset

From a revealing BusinessWeek interview with SBC CEO Ed Whitacre (Emphasis added):

Q: How concerned are you about Internet upstarts like Google (GOOG), MSN, Vonage, and others?

A: How do you think they're going to get to customers? Through a broadband pipe. Cable companies have them. We have them. Now what they would like to do is use my pipes free, but I ain't going to let them do that because we have spent this capital and we have to have a return on it. So there's going to have to be some mechanism for these people who use these pipes to pay for the portion they're using. Why should they be allowed to use my pipes?

Notice what Whitacre said. He expects companies like Google to pay SBC for providing broadband applications. And he plans to build that function into the network.

Be afraid. Be very afraid.

Posted by Kevin Werbach at October 30, 2005 2:27 PM

Comments

Interview's full of very up front stuff: "It's about owning the assets that connect customers. The assets that probably can't be duplicated except maybe by the cable companies" i.e. CLECs; squashed all that stuff, we're a monopoly and love it. And on Telco TV (non) franchising "The cable companies have an agreement with the cities: They pay a percentage of their revenue for a franchise right to broadcast TV. We have a franchise in every city we operate in based on providing telephone service ... If you want us to get a franchise agreement for TV, then let's make the cable companies get a franchise for telephony."

Posted by: Adam Peake [TypeKey Profile Page] at October 31, 2005 5:42 AM

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