I have for some considerable years been speaking and writing about the forthcoming “mother of all battles” between the telecoms industry as we currently know it, and end users.  The territory over which this battle will take place is what many of us call “the first mile” … or as the network-centric telecoms industry has referred it, “the last mile”.

It is indeed a battle of Titanic proportions.  Will the ocean of fibre that exists out there supporting the internet be freely accessible by end users – or will there continue to be an entire industry, artificially sustained by public policy and regulation, built around controlling access to this ocean of bandwidth and levying some sort of usage toll?

Well, at last evidence of this battle is clearly beginning to emerge.  As the ‘access tolls’ levied under the conventional telephony business model begin rapidly to evaporate, major telecoms operators are desperate to find ways to preserve net revenues.   Tactic one – reduce costs by merging! 

Early in 2005, AT&T is sold to SBC for $16bn and Edward E. Whitacre Jr., SBC chairman and chief executive provides the compelling rationale,  “We are combining AT&T’s national and global networks and expertise with SBC’s strong platforms and skills in local exchange service, wireless and broadband - It’s a great combination.” Err.. what?!   Doesn’t that make about as much sense as arguing that the Ford Motor Company should buy the Golden Gate Bridge?  Anyway, the combined behemoth, now renamed AT&T is at it again with a $67bn deal to acquire Bell South.

In reality, I believe there are only three justifications (none of which benefit end users!) for these mindless mergers and acquisitions of businesses operating under a fundamentally obsolete business model.   The first is to take cost out of the combined business (“… if we merge, we will only need one billing system”).  Secondly, to provide continued work and revenues for lawyers and bankers!   Thirdly, and probably most sinister of all, to increase the size, power and volume of the resulting lobbying voice, which can appeal to governments and public policy makers to “….do something to protect this vital and strategic telecoms industry from being savaged by free-loading end users”.

So what did I tell you!    AT&T's Ed Whitacre (he who has built the “biggest and best telco” the world has ever known!)  and Deutsche Telekom's Kai-Uwe Ricke are now joined by the Netherlands KPN in the politically beguiling cry to politicians and public policy makers that Internet companies such as Google, Yahoo and MSN (generating as they do, massive amounts of traffic) should be charged for the use of their networks.

Well that’s a good idea!   If we had set fire to the world at the start of the ice-age, we might have made it that bit warmer so the dinosaurs could have survived!

What a perverse and pathetic suggestion from Mr Whitacre and his mates!   At the very moment when it is becoming increasingly apparent that what the world really wants are big, fat, end-to-end pipes to support its ever increasing desire for peer-to-peer communication (over 60% of internet traffic is now just that http://www.cachelogic.com/products/resource/Intro_CacheLogic_P2P_Mgmt_Solution_v3.0.pdf ) Mr Whiteacre wants to start charging for those who generate lots of ‘bits’ that others want.   But hang on a minute – if this peer-to-peer trend keeps on growing like it looks as if it will – then that will end up with all of us having to pay more to Mr Whitacre!

Oh – now I get it!   I must buy some AT&T shares – it’s clearly a growth stock!   Or maybe the citizens of the world could unite and buy AT&T and make the ‘commercial killing’ themselves?  As I have long argued, VoIP is the biggest telephony money-maker of all time – we ALL make shed-loads of cash by keeping it in our own pockets.  Indeed, more than enough to meet Mr Whiteacre’s modest unemployment benefit without us feeling the pinch!