This is a very interesting situation being described in this article in USA Today. It seems that rural incumbent telephone companies are seeking relief from state public utility commissions to prevent local cable companies from offering voice-over-Internet services as a component of their cable service package in their overlapping service areas.
The rural telcos are withholding the leasing of local telephone exchanges and interconnection to prevent cable VoIP providers from being able to offer a service which would be of use for local calling within the local community. I can speak from real experience of 15 years living in a very small rural town that the difference between a local and a long-distance call can make a big difference in your ability to remain connected to your family and neighbors. In such an environment even the likes of Vonage, Skype or GizmoProject would be challenged to succeed with voice services (except second-line offerings) resulting from the inability to have local numbers provisioned. This is also a class of carrier which is largely excused from requirements for local number portability, so the monopoly on local telephone numbers has a substantial stifling affect on these rural markets.
The parallels between this issue and the issue of providing franchises to incumbent telcos attempting to offer cable television services should not be lost on anyone. In both instances it is incumbents and amicable local and state officials that are actually acting as the roadblock to competition in both the voice and television service market the very customer and constituent bases they are supposed to serve.
Its also worth noting how this issue runs head-long into the issue of the Universal Service Fund. In my past reviews of the various drafts of the new telecom bill, Ive expressed my disappointment that there has been no re-examination of the USF. These same local telcos which are fighting the deployment of cable VoIP are the recipients of USF subsidies.
Tags: Net Neutrality, Broadband
