The opinions expressed in this editorial are those of the author and do not necessarily reflect those of Decima Reports. Cannect Communications’ failure is likely only the first in a series of readjustments in the telecom field to come. Companies will merge, fold or restructure their operations and large telcos will become even bigger through acquisition rather than from any business acumen. It’s easy to identify culprits when a company founders. There are too many competitors chasing too few clients; regulatory restrictions make it difficult for new entrants to compete fairly; the money markets are becoming overly cautious, after spending like drunken sailors during the dot com craze. As our article on telecom financing explains, the moneymen are taking a careful look at where they place their capital. But the market may be correcting itself to accommodate them. There are at least three telcos up for grabs right now—Cannect, RSL Com and Vidéotron Telecom. It’s a buyer’s market, although the sellers may hold off until they can get a better price. The regulatory environment is also brightening for the telcos. The abandonment of the old contribution regime has been widely praised. While individual companies have specific concerns, and have filed appeals based on those, no one has condemned the change itself. Ditching contribution will not cure what ails the telephony industry, but it will stop the hemorrhaging of money. These changes should lead to a sober reassessment by the money managers of how they do business. For the past couple of years, they flitted from trend to trend like an adolescent switching loyalties from Britney Spears to Christina Aguilera to N’sync. When Internet stocks took a tumble, more traditional telecoms took their place. As they faded, investors looked around for other places to put their cash. Cannect boasted an impressive management team and a new way of doing business. It couldn’t quite pull it off, but it may have written the blueprint for successful ventures yet to come. When vision joins with venture capital, we all come out winners.