2 more quick points on connectivity. The FCC just lost on appeal its regulations forcing Regional Bells to open their wires to alternative DSL suppliers:
"The commission ... completely failed to consider the relevance of competition in broadband services coming from cable (and to a lesser extent satellite)," Judge Stephen Williams wrote.
So here's a thought - can the FCC instead mandate that the Telcos have to give access to their physical poles and conduits , so that someone else can run fibre through them? (Peter Cochrane linked below explains why the telco's won't ever do this). Or would this be something that needs to happen on a local basis?

Secondly, on the 'commodity' argument, Andrew Odlyzko's 'The History of Communications' is a must read - it shows how communications become fixed-price commodities over time, covering everything from postage to the net.

He also has a detailed commentary on Roxann Googin's predictions A couple of snips:


Is the "first mile" a natural monopoly? That is what the failure of the CLECs has led many observers to conclude. Yet there are some contrary indicators. After all, most households do have three separate communication systems, the copper-based one from their ILEC, a coax-based one from their cable TV provider, and a cell phone from a wireless carrier. Thus a much deeper look is needed to understand what is going on, far beyond the scope of this note. A key factor, though, is that change is slow but inevitable. Hence a static analysis of technology choices, without taking account how quickly consumer are likely to move, is bound to be inadequate.
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Policy makers who are interested in promoting competition could help this move along by forcing those ILECs that have not yet done so to completely sever their ties with cellular carriers. This would be a much simpler move, both technically and politically, than the separation of wireline industry that is widely discussed.

Competition from cellular carriers for voice is likely to force ILECs to concentrate on exploiting their natural advantage in bandwidth, and to emphasize Internet access. (Note again the UK statistics, where internet access traffic on the voice network is fast approaching that of voice itself, especially since the latter figure includes some modem and fax traffic.) This will likely also force them to emphasize broadband, as a way to segment the market, and to create a natural progression path for their customers, towards higher and higher bandwidth.
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The most promising area for [long distance carriers] is to manage networks that are largely owned by their customers. This will be a huge change, but the IBM example shows that it possible, and also that there is time to do it. The ILECs might be tempted to follow in this same direction, but are less likely to succeed, and may have to resign themselves to operating at lower levels of the networking hierarchy. However, there is likely to be enough opportunity for them even there to thrive.