Comments on: AT&T chief refuses to 'miss' VoIP

David Dorman, AT&T's chief executive, is determined to turn voice over Internet Protocol into an HBO-like service that it can sell.

Still missing the boat....

Regulation is catching up to VOIP. I think the focus should be on using the worlds largest network for technologies and services with a larger and more stable profit margin. Wired voice service of any kind, no matter how cheap, will continue to become a commodity.


TheNetGuy

Smart Guy. He's on track.

He's right on. The market for broadband is NOT a duopoly -- from an economics standpoint it would be interesting to see a Herfindahl-Hirshmann index on broadband. With the advent of terrestrial wireless, DSL, lower point-to-point frac/T1, and cable I would sincerely doubt one could claim there is little competition.

As for wired services, he is also right. Cable is smart to take advantage of the additional marketing opportunities. The Bells will kick themselves for not taking advantage of the additional revenue. Network economies represent dramatic gains/loses due to operational leverage of the firm. We've seen this before with firms offering dialup at $9.99 to build their network.

Probably the most important is the competition for voice services. In the future, VoIP will be $20 a month with a boatload of features. The Bells and their monopoly position (and history of gouging consumers) is OVER. The cost to operate their networks is still substantial, but, if they can't get the voice and data part they may be in trouble as their fixed costs can't be covered by the volume of consumers they are carrying (as cable and competitive VoIP services offer consumers a choice).

In my opinion, the Bells are going to get what they deserve. They had a chance to survive on unbundled network elements and the selling of their services to competitors, but they blew it. They had a chance to sell the value of their network -- which would have spurred new innovation and lower cost for dialtone. It's unfortunate monopolies in the USA have caused this country to have fewer broadband services (or quality) than abroad.

Dorman's figured it out

I worked in Dorman's organization at Pacific Bell in the late 90s and remember his zeal. He's got this thing nailed!