This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Google and Telecoms vs. the 'Regulatorium'

NEW YORK (TheStreet) -- What VisiCalc co-founder and profound digital thinker Bob Frankston once called the "regulatorium"  -- a collection of cozy relationships between telecom regulators and the regulated meant to frustrate change -- may be about to break up.

It's being replaced by Internet property rights, a system that may benefit the formerly regulated even more than the regulations did, bringing monopoly rents and profits to their investors.

The break is being led from the top down by AT&T (T) and Verizon (VZ), and from the bottom up by Google (GOOG). Its chief beneficiary may turn out to be Comcast (CMCSA).

The top-down effort is called the "IP Transition" in which telephone-era regulation will wither away, to be replaced by Internet regulation. This could happen as early as next year, writes DSL Reports

Tom Wheeler, chairman of the Federal Communications Commission, said it would be "a good thing" if what he calls the "Network Compact" -- competition and the interconnection of networks -- is maintained. But it's a a pretty low bar when he adds that "regulating the Internet is a non-starter," as he did in a 2013 speech.

This means all the property built by phone and cable franchises, under regulation, over 100 years becomes private property. Rules designed to prevent abuse of market power are replaced by a vague regulatory yearning.

This sounds great to AT&T, which is already moving to change tariffs accordingly and grandfathering old agreements for no more than three years. Verizon is also on board with this view. Comcast may prove a bigger winner. After its purchase of Time Warner Cable (TWC) is complete it will be the unquestioned leader in local Internet services.

Lost amid the gold rush is any concept of a local network as a "common carrier," whose business relations are subject to public scrutiny. Former FCC member Michael Copps, now with Common Cause, wants the biggest Internet service providers (ISPs) such as AT&T and Verizon to be defined in this way, but his is a voice in the wilderness.

While the telecommunications companies bring down government from the top down, Google is looking to liberate them from the bottom up through its Google Fiber initiative.

Google Fiber was first deployed in Kansas City, where the company got free access to rights of way, office space, city employees, and an express lane for its permits. 

Now the company says it is "considering" nine other metro areas for its next buildout, and it wants similar deals.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
GOOG $554.76 -0.13%
AAPL $130.12 -0.23%
FB $80.41 0.00%
TSLA $207.19 0.00%
YHOO $44.40 -0.11%

Markets

DOW 18,214.42 -10.15 -0.06%
S&P 500 2,110.74 -3.12 -0.15%
NASDAQ 4,987.89 +20.7530 0.42%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs