BLAME GAMES

For the past decade, Supercomm has been a week for the industry to crow about its latest accomplishments, get precious little sleep and blow out expense budgets. Last week's fete in Atlanta couldn't have been more different. Survival and maintaining a bunker mentality are in; trotting out the latest boxes with higher speeds and feeds than ever is out.

An unfortunate side effect has also reared its head: shifting blame.

Across what seemed like acres of empty carpet, the noticeable absence of vendors like Marconi and Motorola, along with light traffic on the show floor, was symptomatic of the current market malaise.

Despite that, multiple keynoters assured those who still had jobs that the future was bright. Notwithstanding massive job cuts (rationalization, right-sizing, cost controlling — pick your preferred term) and share prices that are near all-time lows for several big players, many of Supercomm's headliners suggested that the telecom industry will be fine as long as people continue to pick up the phone and log on to the Internet. And when they did acknowledge that the short term is going to be difficult, most placed blame for the difficulties at someone else's feet.

Verizon Communications Vice President and Chairman Lawrence Babbio used the Supercomm soapbox to complain that pricing for DSL service would be 40% to 50% higher if it was based solely on the cost of providing the service instead of on competitive pressures. Of course, one must ask whether it was somehow the fault of others that Verizon set its price at that level.

Sprint CEO William Esrey, while as optimistic about the future as one would expect, took aim at Wall Street analysts and the media, saying that those who focus on gloom and doom are reporting yesterday's news. Esrey said the same group is showing a “lack of vision and confidence — a desire to follow the easy and familiar path of mass psychology and conventional wisdom.”

Mass psychology on Wall Street, though, punished Nortel Networks last week after the equipment company issued almost $800 million in convertible bonds, and conventional wisdom says there will be more carriers and vendors filing for bankruptcy protection in the next six months.

The blame indeed falls to carriers that overbuilt their networks using the free-flowing capital as their drug of choice and to vendors that thought the days of business plans with little prospect of profitability would never end. Regardless of long-term prospects, everyone is feeling the short-term pain. Blaming others does little to ease the ache.