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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 - Get Report). 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.

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