Monday, November 20, 2006
The attractive young lady at the left is "Alice", the symbol of Telecom Italia's DSL service in France. She is holding the "Alicebox" - their combined DSL, VoIP, IPTV customer premises equipment. The woman on the right is Marianne, an allegorical figure of Liberty and the French Republic. Alice and her less dramatic competitors are leading France to a real convergence revolution that seems to be lacking in the US.
Digital Subscriber Line (DSL) technology is the core of this revolution and ironically it was invented in the US at the former Bellcore, which is turn evolved from Bell Labs. For a while FCC was requiring incumbent local exchange carriers (ILECs) like Verizon to unbundle their local loop and let 3rd parties offer DSL. The ILECS hated the idea, complained about the financial terms of the the mandatory leases, and managed to get the policy reversed. Let's see what the US has missed.
In France there are several companies offering DSL with other services either bundles in or available at a small surcharge. These are France Telecom (the former monopolist), Alice/Telecom Italia, Neuf Telecom, Free (which is not actually free), and Darty (the French equivalent of Circuit City). (Non-Francophones might want to view these links through Google's translation page which will help the understandability a lot.) These carriers sweeten their offers by throwing in special deals like free MIMO Wi-Fi LANs, free calling to up to 27 countries, free domestic long distance in France (although Tahiti is not included - sorry Gauguin fans - even though other French overseas DOM/TOMs are), and - more importantly - IPTV, a cable TV-like service. (On the long distance issue, attentive readers may recall my 6/17/06 entry on "Telecom Too Cheap to Meter".)
Now the title of this blog is SpectrumTalk so you may wonder why I am talking about Alice and friends. C-O-N-V-E-R-G-E-N-C-E. The IPTV that is being offered by these French firms is crosselastic (competes with even though it is different in nature) to both traditional CATV and over-the-air television! Already in the US only 14% of households get their television solely from over-the-air signals and the growth of IPTV could decrease this further. At some point the broadcasters may wish to review the Kwerel/Williams proposals in FCC OPP Working Paper 38 and think about selling their spectrum rights to more socially valuable alternative uses. (This would be facilitated if they could be allowed to retain some or all of their must-carry rights, but more on that in a later posting.) More importantly, the whole concept of content regulation of TV in the US is based on the idea of scarcity. No scarcity of video channels, no need for content regulation - other than limiting access to indecency to adults. Finally, nearly unlimited opportunities for new channels, which you get with IPTV and multiple DSL providers, will be the best thing for Free Speech and the 1st Amendment that ever happened.
So, hopefully, Alice may be able to visit the US in the near future if FCC revisits its policy on DSL competition and looks more at the long term impacts.