A Telecom Bailout?

Not to be an alarmist, but as politicians debate the merit of bailing out the crippled U.S. auto industry, after bailing out Wall Street to the tune of $700 billion, it might be time for us to think of this, at least in a what-if frame of mind.

Anyone who was employed in the telecom/communications/e-commerce/networking business back in 2000 to about 2003, or in a related industry like airlines post 9/11, should remember well just how hard they were hit.

I’m not saying we’re headed for a repeat, the end-of-the-world as we know it, a death spiral etc. It seems financial market and economy mega-struggles are already have a chilling affect on companies that are cutting staff, spending, reorganizing, and selling off assets – all while their stock value has plummeted (even Google).

401(k)s have turned into 01(k)s in a matter of weeks.

Things could and should improve, and many lessons (enough?) have been learned from the dot-bomb stretch.

However, in the last several months alone, bailout candidates have come to the fore, and fast. Loan institutions, financial market firms, insurance firms have already been bailed out, even while AIG held a “bailout party” last week after asking for additional billions.

Now the auto industry, which has been hit hard by $4 a gallon gas (they’re not alone) and a lack of a broad energy policy, is up at the plate. With one out of 10 U.S. jobs related to the auto industry, the stakes are high.

If things get worse here in the U.S. of A for high tech, would we merit a government bailout? There doesn’t seem to be much that the country still makes here beyond cars, computers, communications and content (Hollywood), so the stakes would seem to be sky high too.

And with a new president in office, one who embraced technology as a driver of his campaign, would he be predisposed to help us out, if needed, of course?

xchange magazine broke ground way back in May with our challenged-economy issue, which was written before then and looked at what a struggling economy could/would mean for our readers. I’m not saying we possessed any time-machine future vision, but a lot of the content that month focused on business and financial issues as opposed to pure technology.

Enabling technologies are just that. But without a revenue, business model or real ROI attached to them, what are they beyond enablers?

The point I’m trying to make is that there’s been a lot of debate as to who foresaw the mortgage mess and Wall Street collapse and who didn’t, and when. It may not be writing on the wall, but none of this was a complete, overnight shock-and-awe situation.

There’s no excuse for failing to look forward, whether you are a half-full or half-empty type.

I hate to think how bad things would have to get for us to qualify. 2000-2003 was bad enough for me, and many, many others who were forced to consider extreme spending and career makeovers.

Nobody wants to see this happen again.

Folks have to remember that bailouts are not new, and can work, for an extended period. The feds bailed out Chrysler way back when and Lee Iacocca helped turn the company around. It was bought in the late ‘90s by Daimler, but still exists, for now.

We’re really good at helping other countries with their woes. But shouldn’t help start at home?

Maybe rather than thinking telecom Armageddon, perhaps we should be focused on all the steps that could be taken to avoid it.

Hopefully fed help for industries will right the ships instead of making the captains rich. And maybe a stronger economy, financial markets and fewer billions headed to foreign wars will together or separately bring things back to normal. That would obviate the need for a telecom bailout, right?

I’m not a regulatory expert, nor do I even masquerade as one in this weekly blog space, but I do remember really tough times in lots of industries. It could be long argued that regulation/oversight, or lack thereof, helped create the problems we face.

I remember the one-time struggles of the defense industry in the ‘80s and ‘90s that was seemingly first cured by Iraq 1, and much else later.

I also remember most of the names of airlines that existed before the towers went down on 9/11. I remember the ups and downs of the auto industry as gas prices went on a still-running rollercoaster ride starting in the late 70s.

I far prefer to think glass half-full than glass half-empty, but those memories and more are forever in my mind. That’s why I wrote this blog.

We may (and hopefully) would never need a bailout, but it’s increasingly hard to avoid the topic in general, or avoid it on TV.

I’d rather focus on taking every step needed to avoid having to go there.

I just hope that all of the parties needed to come together to make things better ─ politicians, money experts, consumers, enterprises, IT industry firms, regulators and so on ─ are up to the task, and perhaps already thinking about this scary what-if scenario.

Rebuilding America has to include a strong, vibrant and forward-thinking tech industry. Let’s remember that, and make others who don’t, realize it. I don’t want people turning off the proverbial light at the end of the tunnel to save on energy.

Going into the holiday season, in whatever shape, I’d like to focus on happy thoughts...

But first things first.

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