The first bit, in true Clay style, is spot on, however there are two later points that are surely not correct.
“The incumbent local phone companies –Verizon, SBC, BellSouth and Qwest — have various degrees of interest in VoIP, but are loathe to embrace it quickly or completely, because doing so means admitting to everyone — shareholders, regulators, customers — that both monopoly control and artificially high voice revenues are going away.”
This is much the same as what happened with Netflix and Blockbuster. Netflix gets rid of late fees, and without late fees Blockbuster loses money, so Blockbuster is the incumbent that cannot adopt a more efficient model without actually losing money, something shareholders wouldn’t allow. Local phone operators are similarly challenged by VoIP, but like the music Industry they can use lawyers to prolong the inevitable.
Later on Clay writes:
“VoIP isn’t a service, it’s just a set of protocols, meaning that competitors don’t have to buy into Plan A to deploy it.”
It may be a detail, but isn’t this confusing VoIP with SIP or H323? VoIP isn’t a set of protocols, its just plain ‘Voice over IP’? The most popular VoIP client, Skype, uses largely proprietary protocols. VoIP is possible because Internet bandwidth availability is now largely good enough for voice.
“If Plan A is ‘Replace the phone system slowly and from within,’ Plan B is far more radical: ‘Replace the phone system. Period.’