Telco plus utility = Reduced risk of disintermediation and marginalization
The fact that many tech companies are interested in the energy and communications industries is notable when discussing Google. Some have taken significant steps, such as Google’s acquisition of Motorola’s cell phone business in 2012 and its purchase of smart thermostat provider Nest in 2014.
The Google Fiber project was an early attempt to capture share in the broadband access market, and although that development country-wide hasn’t taken place (yet), the Google Fiber service is still available in about ten U.S. cities.
As a result, technology companies, like Google, Netflix, and Amazon, are entering internet and entertainment business lines traditionally owned by telcos to maintain growth in a saturated and sometimes declining market. Technology giants like these are embracing smart thermostats and home energy management – an area once regarded as a potential future growth engine by progressive utilities.
In addition, the U.S. continued to thunder despite the latest events. When compared to their power utility and telecom counterparts, the technology companies are undeniably less regulated by the Justice Department.
It’s no wonder that Tesla recently acquired SolarCity, launched its solar rooftop initiatives, and released its wall battery offerings, demonstrating that unregulated technology companies are taking on legacy utilities.
Aside from that, legacy telcos or utilities cannot compete with Amazon and Google, who discover profound and undeniable information about their customers using their searches, clicks, and purchases.
Telecom and utilities should join forces, says the presence of mind
Working under a public system and being governed by the Federal Energy Regulatory Commission, the U.S. The Department of Energy and the U.S. In the United States, utilities, telecommunications, and the Federal Communications Commission (FCC) are regulated at the state level. A majority of public utility commissions support or refuse service rates and investment drives at these utilities, to offer essential services at the lowest possible cost for each utility constituent.
Historically, programs like the Universal Service Fund (USF), operated by the FCC, generally guaranteed that essential needs, like electricity and telephone service, would be provided by these utility companies, even though a private, profit-driven corporation could not afford to provide them. The appearance of wireless communications providers during the 1990s led to cellcos taking advantage of USF funds to build affordable infrastructure in parts of the country that were already underserved, such as many Native American reservations.
During the 1990s there was another platform that became widely used: the internet. The FCC didn’t put many restrictions on providers as a result of its decentralized architecture and regulator’s view that it wasn’t a fundamental need like electricity or communication. Thirty years later, Google is a multi-trillion-dollar organization, and Washington, D.C., is still attempting to figure out how to guarantee access to broadband in low-income communities.
Without satisfactory Internet access, it’s difficult to participate in the cutting-edge economy, which is a real and growing contributor to the bifurcation of American society. A similar adverse development may be preparing for legacy telecoms and power utilities. To prevent the Googles of the world from claiming the future of energy and communications, regulators need to get ahead of technological advances moving dangerously fast.
Regulatory needs should be established at the government level so that telecommunications and utilities can effectively compete against their unregulated counterparts, as well as guarantee equal access to fundamental needs.
Renewables must provide the dominant source for future electricity generation – they shouldn’t be inherently unregulated subsidiaries. Utilities and telecoms should not need to deploy multiple, overbuilt communications networks at the same time. Regulations should focus on ensuring the physical security of critical infrastructure as well as its cybersecurity. It’s the telecom specialists’ job to deal with telecommunications, and the power generation specialists’ job to manage power generation. Therefore, the telecom and utility industries should be allowed to merge and compete.
Small-scale implementation has been successful. Central Indiana Power and Hancock Telecom, two telecommunications and power distribution companies in Greenfield, Indiana, united in 2011, turning into one cooperative contribution.
As a result of this consolidation, regional telecommunications and electric cooperatives can better serve rural clients with broadband networks and advanced energy management capabilities. New company NineStar Connect is the first country cooperative to provide triple-play media functionality in addition to grid capabilities.
Billing, client service, and other business functions were combined to increase operational efficiency. Fiber deployment in a rural area was reduced by combining the companies, and the overall deployment time was shortened as well. Several people groups across the nation – and not just in rural markets – would benefit from the merger of their communication and power utilities.
Regulators should anticipate technology shifts, not react years later
New business models emerge with the advent of new technology. Regulators often have lagged in recognizing how legacy businesses (such as landline phones) may suffer a rapid decline following technological disruptions.
Critical infrastructure is exactly what it sounds like: critical. Moreover, regulators need to prepare utility and telecommunication legacy companies to compete with their less regulated counterparts in Silicon Valley on an even playing field regardless.
In any case, allowing even big telcos and utilities to pool their resources will improve efficiency in all fields, increase energy and operational efficiency, and help narrow the digital gap.
In addition to ensuring essential needs are met, regulators can also place more emphasis on arising threats, like cybersecurity in critical systems (such as the ransomware attack on Colonial Pipeline that shut down gas delivery to 45 percent of the U.S. east coast in May). The government can also do its utmost to promote green, sustainable solutions to energy and communications challenges. There’s a mutual benefit between all parties – except for Google.