FIDDLING AROUND

The story about Nero fiddling while Rome burned is usually used to describe people who do nothing while all hell breaks loose. Modern historians have suggested that the fire was simply used to clear real estate for a new palace. Either interpretation — arrogant negligence or expeditious ground-clearing — can neatly be applied to today's telecom space. Vendors continue to say that the bottom has been struck and things will get better — that innovation will return. But the carriers stand by, watching innovation shrivel like flame-licked parchment in a monetary drought. This could be the carriers' way of clearing out companies with half-baked ideas. Competition, however, is making the fire difficult to control. By all indications, the cable industry is starting to occupy the void the telcos are creating. Telcos promote high-speed data via DSL, then don't deliver because of cost, distance or whatever the reason du jour may be; cable operators rebuild plants and add high-speed data, then make it easy to go to CompUSA and pick up a cable modem. Carriers tempt consumers with video services, then withdraw as if they've touched a burning ember; cable stockpiles its digital video arsenal and moves into entertainment-on-demand. It's possible that in ancient times, the telco strategy of standing back, stifling innovation and waiting for the government to regulate competitors would have worked. However, today's atmosphere of a laissez faire government that listens more intently to a more politically savvy cable industry is likely causing that strategy to backfire.