John Robb

John RobbNewNetworks Institute: The RBOCs (local phone companies) caused the recent tech recession. This is true. IF the RBOCs had adopted i-mode's approach this killer tech recession would have been averted.

“In fact, through this fiber-optic fiasco, the Bell companies have become some of the most profitable companies in America — outpacing the Business Week 500's profit margins by 256%, their utility brethren by 212%, and the top 9 companies by 170%. This includes: EXXON, Citicorp, AT&T, IBM, Enron, Wal-Mart, Ford, GM and GE. These profits are directly from phone customers, not Bell investments. “

What specifically did they do wrong (this is another example of how monopolies can hurt consumers)? Here is a list:
1) They delayed broadband roll-out in the last mile
2) They killed off competition from independent DSL providers by introducing delays and imposing customer service expenses (they routinely turned off working connections which caused independents to expend resources to reconnect them).
3) They didn't act as a transaction agent for content sites (i-mode charges a 9% service charge for sites that want to charge users). Instead they cut exclusive deals for content placement. They know how to charge for content. They do it for 900 numbers all the time. Dione Warwick owes her millions to the ability of RBOCs to charge for content.

If the RBOCs had done the above, we could have had lots of successful Websites right now and real competition in DSL. I would pay $3 a month for Yahoo or Google. The cost of running independent transaction systems and independent authentication systems is enormous. Further, there wouldn't be a Passport right now if the RBOCs followed the correct strategy.

Why did they do it? Ill informed consultants told them that they would be commoditized. Marginalized. Pushed aside if they didn't own content. Wrong (ala Cramer)! They also did it because they could. If they couldn't own it all, no one would.

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