Business Week Learns, Break Up The Bells

Business Week has finally learned what I call "the lesson of Dennis Hayes."

Hayes was the leader in the PC modem business until he decided to believe phone industry innovation claims. He bet his company on ISDN modems. The Bells never rolled out the service, and Hayes lost his company.

Today, TechDirt links to a Business Week article that teaches the same lesson, only now it’s trying to teach this lesson to the entire country.

The subject is the Bells’ hatred of innovation. And it’s important to remember. Change frightens the Bells. They think only of short term profit — that’s all they’ve ever thought about.

It was one thing when this was just sinking businessmen like Dennis Hayes. But now it’s threatening the entire U.S. economy. The Bells are presently engaged in a giant shell game – running ads claiming they’re innovators, ads that tell us networking is so hard only giant companies can do it.

These ads are lies.

The Bells are also engaged in an immense political war. They seek nothing less than an unregulated, total monopoly over Internet service.  They want to determine not only what they can charge, but which sites will win and which will lose in the continuing competition.

This would be a disaster.

The best solution, as Ed Dodds has noted to me, would be to separate
communications from services entirely. That is, break up the Bells
(again) into one company that provides transport to all comers, and a
separate unregulated company that would compete in services.

To go forward, we must first go 22 years backward. And this time, we
must guarantee that the Bells can never be put back together again.
They’re dangerous to the whole concept of innovation, which is the only
thing the U.S. economy has going for it.