Other people who want to see the telecom industry restructured as fast as possible...

The Paradox of the Best Network:

A Letter to FCC Chairman Michael Powell:
Support "Fail Fast"

The Hon. Michael Powell
Chairman
Federal Communications Commission

Dear Mr. Chairman:

We thank you for your leadership in FCC efforts to understand the causes of the current telecom debacle, and especially for convening the FCC's October 7, 2002, Telecom Recovery En Banc hearing.

We were dismayed that several of the En Banc speakers confused causes with effects. We believe that balance sheet weakness, long-haul overcapacity, and even the recent speculative bubble, are effects, not causes. If we attempt to treat the symptoms, we risk missing the causes and prolonging the agony.

We hold that the primary cause of current telecom troubles is that Internet-based end-to-end data networking has subsumed (and will subsume) the value that was formerly embodied in other communications networks. This, in turn, is causing the immediate obsolescence of the vertically integrated, circuit-based telephony industry of 127 years vintage. CLEC, IXC and ILEC bonds used to purchase now-obsolete infrastructure assets have become (or inexorably are becoming) bad debt. Weak last-mile competition prevents the most powerful technological advances from reaching all but a few customers; this is the largest cause of long-haul over-capacity.

One En Banc participant, NYU Professor Larry White, had views that seem consistent with ours. He recommends that we let firms that are failing fail as quickly as possible. We believe that it would be harmful if government actions prevent, delay or interrupt this evolution. It must proceed if the United States is to continue to be a leading contributor to communications progress, and if its citizens are to benefit from the technologies that are now available and the applications that they enable.

The telecom debacle is not a cyclical phenomenon. The telephone network's technological base, and the business model under which this old technology thrived, are obsolete. Recovery is not an option. We can only move forward; how far and how fast will be determined by our continued freedom to innovate. Let the United States learn by not duplicating the Japanese banking experience in the telecom arena.

We need to see the current situation not as a disaster, but as a natural event; part of a revolution in productivity and human benefit as big as the agricultural and industrial revolutions.

Given these views, we urge the FCC to:

• Resist at all costs the telephone industry's calls for bailouts. The policy should be one of "fast failure."
• Acknowledge that non-Internet communications equipment, while not yet extinct, is economically obsolete and forbear from actions that would artificially prolong its use.
• Discourage attempts by incumbent telephone companies to thwart municipal, publicly-owned and other communications initiatives that don't fit the telephone company business model.
• Accelerate FCC exploration of innovative spectrum use and aggressively expand unlicensed spectrum allocation.

Mr. Chairman, we note with gratitude your impatience with antique regulatory structures, and your attempts to embrace new technology. Also, we acknowledge the burden inherent in the FCC's duty to ensure the continuity of communications, especially basic dial-tone continuity, in the face of such changes; we are prepared to lend assistance as the FCC grapples with this issue. Notwithstanding, we urge you to continue against the inevitable onslaught of those seeking to preserve an impossible status quo. Sincerely,

Izumi Aizu, Asia Network Research; Jay Batson, CEO, Pingtel; Robert J. Berger, President, Internet Bandwidth Development, LLC; Dan Berninger, pulver.com; Scott Berry, telecommunications consultant, Darien CT; Michael Bialek, President, InfoComm Inc.; Scott Bradner, Harvard University; Richard Campbell, Worcester Polytechnic Institute; Douglass Carmichael, individual, dougcarmichael.com; Judi Clark, individual, ManyMedia.com; Anders Comstedt, Managing Director, Stokab; Gordon Cook, publisher, The Cook Report on Internet; Sky Dayton, founder, EarthLink, founder & CEO, Boingo Wireless; Timothy Denton, Internet attorney, tmdenton.com; Greg Elin, independent software developer; Tom Evslin, CEO & Chairman, ITXC; David J. Farber, Moore Professor, University of Pennsylvania; Bob Frankston, individual, frankston.com; Dewayne Hendricks, CEO, Dandin Group; Roxane Googin, editor, High Technology Observer; Charles W. K. Gritton, President, Broadsword Technologies, Inc.; David S. Isenberg, Principal Prosultant(sm), isen.com, LLC; Johna Till Johnson, President, Nemertes Research; Peter Kaminski, individual, peterkaminski.com; Shumpei Kumon, Executive Director, GLOCOM; Bruce Kushnick, Executive Director, New Networks Institute; Andrew Maffei, individual, Falmouth MA; Jerry Michalski, sociate.com; David Newman, President, Network Test Inc.; Matthew Oristano, former CEO, SpeedChoice, People's Choice TV; Mark Petrovic, individual, Pasadena CA; Jeff Pulver, founder, pulver.com; Frank R. Robles, CEO, Neopolitan Networks, Inc.; David P. Reed; Charles Rybeck, Managing Director, Benchmarking Partners; Paul Saffo, individual, pls@well.com; Doc Searls, Senior Editor, Linux Journal; Clay Shirky, telecommunications consultant, shirky.com; Porter Stansberry, publisher, Agora Inc.; Ted Stout, CEO and founder, The ROI Institute; Steve Stroh, Editor, Focus On Broadband Wireless Internet Access; Brough Turner, CTO and co-founder, NMS Communications; David Weinberger, JOHO editor and Cluetrain co-author; Kevin Werbach, technology analyst, Supernova Group LLC; Ken Freed, Media journalist; Kevin Marks, instigator of MediAgora; Joy Pinsky, CEO MindMyth, Inc.; Mitch Ratcliffe