Full-Service Network: Telecom’s Lost Decade
In the early ‘90s, US Regional Bell Operating Companies (RBOCs) were muscular and in a spending mood. Having only recently completed a nationwide network digitalization, several RBOCs embraced a new, ambitious vision to catapult themselves into a high-tech future centered on a “full-service” network (see some major milestones in Exhibit 11 – Battle for the Wire: A Brief History). At the time, with no commercial internet, and therefore no email, web surfing, e-commerce, nor streaming media, the idea was that phone companies would take the lead in creating all manner of bandwidth-rich, two-way (“interactive multimedia”) consumer services and the network that delivered them.
The full-service vision was largely video-centric, with an eye on the still-fragmented and debt-burdened cable industry as a threat in the “battle for the wire.” Fearing they might be relegated to transport services, while others “up the value chain” helped themselves to the multimedia booty, telcos decided to cut to the head of the line.
Though AOL had yet to popularize the term, phone companies envisioned a “walled garden” of content – video, games, shopping, other interactive services – charging a toll to outsiders who wished to serve their subscribers, and wherever possible charging off the enabling infrastructure investment as an upgrade of regulated facilities. While the translation of vision to strategy was a bit hazy, in essence the goal was to create a high-speed, proprietary form of the commercial internet before there was one, ensuring telco supremacy for whatever broadband future lay in store.
The full-service vision proved to be technically and strategically over-ambitious. It was displaced by all manner of other items on a growing, crowded agenda: reconsolidation of Baby Bells, cellular digital conversion and expansion of competition, getting DSL off the ground, the internet and telecom bubbles (and subsequent aftermath), and unrelenting regulatory battles both pre- and post- the ’96 Telecom Act.
The increasingly half-hearted projects eroded into stalled technical trials, tactical resale deals with digital satellite television, ultimately fading from telcos’ strategic planning radar. After flirting with media companies, telcos retreated to their core connectivity businesses and competing with each other.
Meanwhile, instead of the full-service network, what the world got was the ultimate “self-service” network: the internet. This inherently open network, in which transport and content are unbundled by definition, became the de facto global driver of broadband deployment. ■
10 October 05
