Birch Telecom Leaves Austin

News reports yesterday indicate that Birch Telecom is performing massive layoffs. Birch will terminate a third of their workforce. The company will close their Texas sales offices in Austin and San Antonio.

Here is an odd juxtaposition of events: on the very same day, the Texas Senate passed the telecommunications deregulation bill.

The troubles at Birch are indicative of the failing state of competition in the telecommunications sector. So, the question is, how does this legislation, ballyhooed as a solution to drive telecom competition, help competitive providers such as Birch?

Answer: it doesn't do a blasted thing for them.

See, when the legislature talks about "competition", they do it in that Humpty Dumpty way where a word doesn't mean what we think it does. When you and I talk about competition, we mean things like bringing more competitors into the market.

The "competition" provided for in this legislation means giving the incumbent providers access to new markets. It doesn't mean structuring those markets so that new competitors can join. In other words, the goal of this bill is to allow Bell to leverage its monopoly in traditional telecom to gain entry in the video market.

The unfortunate events at Birch show that telecom markets are becoming less competitive, and the legislation being pushed through in Texas is only going to accelerate that process.


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re: Birch Telecom Leaves Austin

As a subscriber to Birch telecom and an observer to the present FCC,legislative debacle regarding rate structure changes; as in Lemmony
Snicket, its a series of unfortunate events. It conjures images of some legislators protesting,(to no long term avail) the gerrymandering/demogogury of the Republicans.