In my own head recently I've been having the following conversation with myself:Me: "Howard, you idiot, how did this telecom meltdown happen on your watch, and why didn't you warn us?"Howard: "I did warn you. I told you that there was no way that 300 competitive local exchange carriers could succeed. I told you that the entire industry was supported by junk bonds. I told you . . ."Me: "You also told us that applications would soak up the extra bandwidth because they always had. You told us that companies would build new products and create virtual malls, and that consumers would use all of this bandwidth to send music, video and interactive games back and forth to one another!"Howard: "They will, they will. I just didn't say when."Me: "That answer won't hack it here. You and your ilk started to drink the Kool-aid; you actually believed that demand followed supply."Howard: "I'm sick of all this postgame b.s. - it's time to think about where the industry is going. Did you notice Verizon is the nation's No. 3 long-distance carrier if you measure by number of households? They have about 10 million households vs. 8 million for Sprint."Me: "Big deal. We all knew this was going to happen sooner or later. Five years ago The Yankee Group said that the regional Bell operating companies would get 20% of the long-distance market - and they are. But so far none of the RBOCs are making real headway in the enterprise market. But you also said that AT&T and MCI would continue to take share from the local market. Still feel that way?"Howard: "Yes and no. AT&T is gaining share, and the RBOCs are losing access lines left and right. It looks like the Federal Communications Commission is moving to stabilize the industry - if only to protect it from itself. Which means that the prices for the network elements are going to go up, and the long-distance guys are going to find it isn't quite so easy to make money in this business."Me: "There you go with the 'yes and no' crap. What I want to know is even if competitors find it harder to buy and resell, will the equipment market recover, and will the remaining carriers start buying soon?"Howard: "The FCC wants it both ways. . . . It wants to 'save' the industry but it also wants to see innovation and free markets. No one in their right mind is going to rewire America for another local carrier when it's going to cost $2,500 or $3,000 per home."Me: "Look, the choice now is either an RBOC or an RBOC clone in the local market. Will we really see competition from a different sort of competitor - such as cable or Internet telephony or cellular?"Howard: "You already are. Forget the fact that any business that puts in Internet telephony is putting itself at risk because the stuff still doesn't work well enough. Cox Cable and Comcast are overbuilding. The intent of the Telecom Act was to use the local telephone companies' infrastructure temporarily until competitors could build their own facilities."Me: "And what happened?"Howard: "Well, the venture capital industry doesn't have the money or guts to do this; investment bankers couldn't raise more money for these companies, and Europeans had enough problems with their 3G debacle. The only ones left were the cable guys and maybe, under some circumstances, AT&T - and even then only on areas where the volume made it a make vs. buy decision."Me: "I'm still holding you personally responsible for the $3 trillion loss in telecom and for not blowing the whistle on this. You knew in your heart of hearts that there was no way in hell that this industry could absorb all the capacity that came online in the late 1990s and the first few years of this decade."Howard: "Mea culpa."