The fact is that the telecom industry has return on capital among the lowest of any industry: <a href="http:&#x2F;&#x2F;www.mckinsey.com&#x2F;business-functions&#x2F;strategy-and-corporate-finance&#x2F;our-insights&#x2F;a-long-term-look-at-roic" rel="nofollow">http:&#x2F;&#x2F;www.mckinsey.com&#x2F;business-functions&#x2F;strategy-and-corp...</a> (Exhibit 2). Software and related services, in contrast, has among the highest returns.<p>So if Google is looking to spend a billion dollars, they can make several times as high a return putting that into their software and services operations than into building fiber. But ultimately, Internet companies are reliant on the physical infrastructure to provide their service. That puts them in an odd situation: they need <i>someone</i> to build those pipes, but they&#x27;d rather not do it themselves because that&#x27;s not an efficient use of their capital.<p>So has it occurred to you that nobody wants to step in and compete, not because of the regulatory hurdles,[1] but because no investor wants to pour billions of dollars into an industry that&#x27;s about as good at making money as airlines?<p>[1] After all, investors pour tons of money into highly regulated industries like pharmaceuticals, because the return on investment justifies it.