USA Today (Monday) has a front page article (Business section) on AT&T and its decision to get out of the consumer market for local and long distance services. Opinions are mixed on the wisdom of this approach, but the company does not really have much choice. With the FCC decision to allow the regional Bells to charge whatever they like for wholesale access to their infrastructure, AT&T could no longer profitably offer local dial tone service.
As I've said before, I think that the FCC made the right decision. If the Bells are expected to compete with unregulated companies (e.g. the cable and WiFI firms), it does not make sense to hobble them by requiring them to sell their own network to competitors below market rates. It is no coincidence that since that ruling a few months ago that the regional Bells have begun to announce FTTP (Fiber To The Premises) projects--they finally know they can make money doing so.
Buried in the article is a one line reference to the "Cable-Phone Wars." One reason the phone companies have finally jumped on the fiber bandwagon is that the cable companies have captured a large part of the broadband customer base by investing early. DSL is now selling in most of the country for about $15 less than cable service because the phone companies have to do something to get customers back--like actually compete on price and service. Horror stories abound, but generally, the cable companies, which tend to have more local offices and real service people working for them, seem to be winning the service battle.
The phone companies, in a better late than never strategy, are winning the price war right now. This is all good for consumers, up to a point. Quality of Service (QoS) is still shaky for both cable and DSL. Both are copper-based legacy systems that were never designed to deliver high speed data to homes and small businesses. Fiber and wireless can deliver data much better, but can't always provide the content (e.g. cable TV) and/or some services (like dialtone)--yet.
It is going to be a war. Communities and businesses are particularly at risk if a single company "captures" the local marketplace before competition fully develops. As always, the way to avoid this is to make modest investments on a communitywide investment to keep the playing field level for small and medium-sized companies. Those investments will help network access and service providers compete effectively against the cable and phone companies. Those investments will also keep prices down--that's always a good thing that makes the community and region more attractive to businesses.