Thursday, March 22, 2012

Cable and Telephone Giants: Embracing, Extending and Extinguishing the Competition

           You may have heard that the major cable and telecom players have entered into joint venturing agreements that appear to have the effect of eliminating cable operators as wireless telecom competitors and reducing the zeal with which telecom players, such as Verizon, will pursue video ventures.  See http://tales-of-the-sausage-factory.wetmachine.com/my-insanely-long-field-guide-to-the-verizonspectrumcocox-deal/#more-2824.

           I marvel how something so transparently anticompetitive can be framed as economically efficient and of course job creating.  I believe the big lesson here is that when incumbents face destructive new technologies, they respond with a predictable playbook: embrace, extend, extinguish.  We're in the embrace mode now.  Isn't it wonderful that the Bellheads and Cableheads are thinking out of the box and embracing new technologies?  Of course the goal is to extend market dominance and to foreclose and eventually destroy competition.
            So is there anyone out there to perform the destructive technology role?  Sprint, Clearwire, Dish?  Or are we at the "game, set and match" conclusion at least for our lifetime?  At the very least before our very eye incumbents erect even higher barriers to market entry making competition that much more difficult to achieve.