It's 'put up' time

As a die-hard Cubs fan, I could be talking about the baseball playoffs, but in this case, the headline above references promises being made by AT&T and Verizon as they convinced state legislators to implement statewide video franchises.

The most recent of those laws went into effect today in Connecticut, but many more states are buying into the logic that competition will come more quickly to video services if new providers (AT&T and Verizon) don't have to go municipality by municipality to get a franchise. To win favor with those state officials, AT&T and Verizon are promising billions in broadband investments -- and conversely withholding money from states where legislation fails.

In general, I think statewide video franchise laws make sense, but as we are once again inundated with broadband promises, it's also wise to remember when we passed this way before. In the process of getting state regulators to approve mergers and to provide long-distance freedoms, both SBC (now AT&T) and Verizon made significant promises to build out broadband networks that, if kept, would have had entire states wired by now. SBC once promised to aggressively compete for local service on Verizon's turf, something it never did.

This time around, there is, obviously, greater incentive for the major telecom providers to live up to their promises, and that incentive comes not in the form of regulatory penalties but market forces. If AT&T and Verizon can't become major video players, the rapid loss of their core wireline business will threaten their very operations.

Maybe at the end of the day, that is the real lesson here -- a technologically empowered market holds far more sway over major corporations than all the legislators and regulators combined.

E-mail me at cwilson3@telephonyonline.com.