Wired phone assets are plunging in value.

It's that simple. Wireless assets are rising in value, wired assets are plunging in value, so the Bells figure if they can run the wired like the wireless they'll create more value.

The problem is they're looking at the wrong lesson. As usual, the Bellheads are being dumber than dirt.

The light bulb went off in my head when I saw, today, that NTL (a cable company) offer abougt $1.5 billion (817 million pounds in real money) for Virgin Mobile, which is no more than a reseller.

NTL is the UK's version of Comcast, the largest and best-run cable television outfit. They want to combine Virgin with their own stuff to create a "quadruple play" of mobile, phone, TV and Internet services to run-off BT (the local Bell) and BSkyB (its real rival in TV services).

The deal values Virgin at about 220 pounds per customer (that's about $400 American, or 330 Euros in real money), again, for a company that doesn't hold any spectrum of its own. And Richard Branson (hero of my novel The Chinese Century) looks like he will hold out for an even better price, perhaps from Murdoch's BSkyB, perhaps from one of the operators whose spectrum he re-sells.

So what is the lesson?

Two words -- customer service.

Virgin Mobile inspires Apple-like loyalty because it knows its customers and treats them well. It gives them the best deal based on their usage patterns. This is not rocket science. This is management.

Treat people right and your revenues will grow. Treat them like garbage (as the Bells do) and the only way to grow revenues is to kill off the competition and force people to be your customers.

If America is going to rise as a technology power again, we need to encourage operators like Virgin Mobile and liberate our people from the Bell gulag.