Why are the Telco's the industry whipping boys?

I have to admit, I am definitely guilty of our favorite pastime of telco bashing. Having worked extensively with BellSouth as part of an NSP (basically a BellSouth reseller, when all is said and done), I have often launched into many a tirade about the evils of the ILECs and their negative influence on the industry.

Still, I am often wondering these days whether the industry hatred of BellSouth, AT&T, Verizon, etc.. is perhaps a little misguided. Don't get me wrong--they are no angels. But, having had some recent exposure to the cable industry, I'm not sure that most of the independent service providers would be better if the ILECs take the much desired tumble, leaving only the cable companies as potential partners for physical infrastructure.

Most of the industry dislike is voiced by businesses whose livelihood is tied to an ILEC: CLECs, NSPs, VoIP providers, etc. I think, unfortunately, the familiarity breeds the contempt; the most aggressive telco-haters are generally the companies who need infrastructure partners since, in most cases, they lack the means to provide end to end infrastructure to even one of their customers, let alone thousands. So, they lease lines or interconnect with the ILECs, play marketing, branding, and semantic games, and, when all is said and done, simply game the system to provide the same basic services rebundled at a better value using the ILEC infrastructure. Down with AT&T? Down with Verizon? Who is ready to step up and take their place in the market? Who attempts to build real infrastructure? The only real nod here goes to the wireless guys and, when all is said and done, the technology is limited in its capacity.

We speak of deregulation increasing competition and, in some sense, it has. The market is much more open and vibrant than it was in '96 and '84. But, when all is said and done, I wonder if deregulation has failed in its basic objectives: there are still only a handful of companies that actually make the long-term investment to lay real infrastructure. The CLECs of yesteryear made billions of dollars off a favorable regulatory environment and billing loopholes; relying on a great UNE-P rates instead of actually getting their hands dirty. With a few notable exceptions, I don't think the amount of CLEC infrastructure could make a dent in a third world nation, let alone in the US.

No matter how many different companies compete on selling services over that infrastructure, the only thing that will increase competition in that space is more companies actually building real infrastructure. I think, perhaps, the FCC is not being as foolish as we'd like to think--they are generally being supportive of the people who can actually provide real competition and broadband penetration (ie telcos, cable companies, and wireless) and making the rest of the industry operate as the resellers they have become. After all, a 1000 NSPs won't provide increase broadband penetration in the least.

I'm not going to stop bashing the telcos: after all, they are fun to hate. Still, if the ILECs tumble, who really wins except the cable companies? Judging by how few people make a living partnering with the cable companies, I'm not sure that is the desired outcome.