Turmoil in Telecomm

Transcript

ROBERT CRANDALL: The only place in the world where I know a firm is growing using unbundled network elements of the incumbent company is in Japan. Yahoo Broadband has now 3.2 or 3.3 million subscribers using NTT's unbundled loops to sell broadband, and Yahoo Broadband is making money doing it. A small problem: Softbank, who funds them, is losing a billion dollars a year or about $300 per subscriber.

So that, as of yet, does not prove that there is a workable model using unbundled network elements of an incumbent monopolist or an incumbent telephone company to deliver a broadband service by itself, and yet Yahoo is also offering Voice over Internet Protocol to about 90 percent of its subscribers.

So, at this juncture, I think we can say that there is no successful business model that I'm aware of in the world for these new competitive local entrants, but that what we're seeing is a shake-out to three groups of players who are going to compete head-to-head in a variety of different telecomm markets, and they're the ones up there right now [on the graph]: the wireless carriers, of whom we have six; the incumbent local exchange companies; and the cable television companies.

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