So, this is my year in review for all things Telecom and Telecom Regulation. Unlike others, I will provide what I think are predictions for next year.
First, Title II was implemented this year for Residential Internet Services. People are concerned that this will be overturned by the incoming Administration as it allocates new people to the FCC Commissioner Offices. I think that Title II will stay. I know that the large Service Providers don’t like it, but there is little real push to stopping it. If ISPs were really concerned, they would have exited the residential market. There is no obligation to continue the business. But there has been no inkling of any CAPEX changes or any market exits by incumbents post the ruling. So, this time next year Title II will not be a topic.
Second, Google Fiber stopped its expansion. I think that this signals an end to the growth of overbuilders and possibly even CLECs. Deploying capital for Internet Service clearly did not do it for a company that can afford it. Where are the investors going to come from who are going to do this kind of deployment when there are so many better things to invest in. My prediction is that next year will be quiet on this front. There will be an occasional Municipal Network, but the proliferation of these carriers has peaked.
Third, there will be ongoing consolidation between the Content Providers, Internet Infrastructure Players, and ISPs. This trend is long-standing, but it is clear that it is cheaper to buy networks than make them. There are a lot of 2nd and 3rd Tier Businesses in these markets that have either interesting properties or significant revenue streams but uncertain or troubled futures. Consolidation continues to play a role in an exit strategy for these businesses.
Fourth, People will still be haggling over NFV and SDN and how to deploy them to build modern Service Providers. IT SaaS companies will continue to deploy the IT equivalent technologies and be another year ahead of the Service Providers. The Large Service Providers need to have internal incubators and have no business model for doing it. Their vendors need to think about what this means for them. They have simply been listening to their customers or at least one guy within their customers without thinking about what they will do with the technology. It causes them to develop all kind of products that nobody actually uses (see IMS).
Have a great weekend!
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