[ NNSquad ] ATT Admits there is no bit exchange business

http://www.reuters.com/article/2011/05/13/us-summit-att-idUSTRE74C6F220110513

ATT is the argument that wholesale data networking is a natural monopoly.

"John Stankey, the head of AT&T's enterprise business, said the best hope for U.S. mobile wholesale providers may be to get swallowed up in a merger as the U.S. market is hardly big enough for one wholesaler, let alone two."

Of course mobile is a red herring here -- bits are bits. The problem for the carriers is that all the business is going to data (AKA bits) because of VoIP. This includes today's cellular traffic via UMA. ÂThis would mean the both local and spanning (AKA backbone) networks collapse into a common network.

So what business is left for the carriers when all we're doing is exchanging bits and creating all the value outside the network? This means there isn't even a wholesale business. So if it doesn't make sense to do networking as a profit center then why are we trying so hard to extend the 1934 model?

Fortunately we don't even need networks as such thus we donât need to go through regulatory gyrations nor do we need to limit our ability to communicate just to make a network a profit center. I explain more about why in http://www.circleid.com/posts/the_internet_lost_in_translation/.

We just need to facilitate the local means of exchanging bits and, as with roads, we can use protocols to composite it into a global system. That is a very simple approach that doesn't require taxing any and all innovation.

I'm glad that someone at ATT is ready to admit the obvious.