VoIP Growth, Local Competition Said To Depend On CLEC Access To Bell Networks
ORLANDO -- As the FCC writes its permanent UNE rules, CompTel/Ascent CEO Russell Frisby urged the Commission and the White House to keep in mind that “continued access to specific monopoly-controlled network elements is the only way that facilities-based local competition -- not to mention the growth of VoIP -- will happen.” Opening CompTel’s fall convention here, he said “much factual evidence exists to prove that competitors have no other alternative than to lease portions of the Bells’ networks in order to provide services to business and residential customers alike.” He said he hoped the FCC would consider the data gathered by CompTel and make “a more reasoned decision as it finalizes its permanent rules.”
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“It’s important to recognize that VoIP is an application that rides on broadband facilities, and there are numerous [obstacles] that can hinder VoIP growth,” Frisby said. “There is a real danger that companies providing last mile connections will block access,” he said: “Competitive companies must have access to the monopoly network; there is no way around it. This is not a radical request, but simply a reality.”
Frisby strongly criticized the recent actions by the U.S. Appeals Court, D.C., on UNE rules, and the Supreme Court’s denial of the competitive industry’s appeal, saying they had “left providers in a competitive ‘no man’s land,’ unsure of the rules on which you have based your business plans.” “It seems things are not changing for the better,” he said: “An industry once led by entrepreneurs and innovators is now being held hostage and harmed in a political chess match controlled by deep- pocketed monopoly lobbyists.”
Joined by CompTel Chmn. Sherman Henderson, Frisby encouraged CompTel members to continue to fight for access to Bells’ facilities. “The [competitive] industry has survived stressful times before and we continue to grow,” Frisby said: “We are like the Red Sox -- we are winners. We survive no matter what.”
In his keynote, Broadwing Chmn. David Huber asked the FCC to bring regulatory clarity to the marketplace. “If they specified what the regulations are clearly, it would save our money” and allow us to move forward, he said. Regulatory clarity is also critical for VoIP growth, he said.
CEO Forum panelists agreed. WilTel CEO Jeffrey Storey said he was concerned about “continuing regulatory changes. We haven’t had any type of consistent policy going forward… Our biggest issue is not a specific piece of regulation, but rather that there is no regulatory clarity -- we don’t know how to invest.” He said White House should work with the FCC “to create an environment where we can operate.” Echoing other panelists, Progress Telecom CEO Ron Mudry said: “We certainly look for the regulatory certainty… I think bringing [such] clarity would help the entire industry.”
Panelists said VoIP could create seismic change. “Obviously, money is chasing VoIP,” Mudry said. Storey said he expected VoIP to bring about “a paradigm shift in the long term… The bigger issue is that it changes the way companies do business. It changes everything and fairly rapidly.” “What makes VoIP magical is the economics generated by it,” said Mpower CEO Rolla Huff: “We look at [VoIP] as a great opportunity because we can move traffic more economically and offer customers more features, but for the most part it really boils down to economics and quality.”
Panelists agreed VoIP carried opportunities for both wholesale and retail businesses. Huff, who described his company as “mostly retail-oriented,” said: “We've shown that the economics do work… If you don’t have a network at all today, VoIP is probably a way to deploy the network.” Said Storey: “I don’t know if wholesale versus retail makes any difference. We sell both wholesale and retail.” He said at the end of the day “end user applications is what is going to drive the difference.” Mudry said customers don’t “really care how you provide the service, they just want it to be dependable.” He said his company saw VoIP as “a great opportunity that is going to have a growth area.” He said “enterprises are going to be really interesting to watch, whether they will embrace VoIP or not. As a wholesaler, we think it’s going to be good for the industry in the next few years.”
Frisby who moderated the CEO Forum asked where the panelists would invest $50 million if they had it. Huff said: “If I had $50 million, I would invest it in customer relations.” Storey said he thought that “making it easier for customers to do business with us is a good way to invest money.” Mudry added: “A new areas to invest is wireless… I think it’s a growing part of the industry… We feel that wireless is the next wave of a big growth.” He said wireless could help CLECs “completely bypass the RBOCs; that would be good.”
Asked how they viewed competition, particularly from cable providers, Storey said “they certainly are going to be strong competitors… And that’s good. If you believe in competition, they are good competitors that will bring a lot of good applications.” Mudry agreed: Cable operators “are becoming the largest competitors. VoIP is a tremendous opportunity, and I think we'll see more integration between cable and telecom industries in the next year or 2.” Storey said “there is going to be a lot of consolidation going forward and people shouldn’t be afraid of it.”
Huff said the competitive industry should build its own networks, rather than rely on the Bells’. “If you are going to rely on somebody else’s networks, then you are on a sinking ship,” he said. The other 2 panelists declined to comment when we asked.
“Despite the challenges, the telecom services industry is an irresistible opportunity,” Hubert said. He outlined “a vision for success in the [competitive] industry: (1) Stabilize your business. “Customers need to know that their service provider is there for the long haul,” he said. (2) Innovate and evolve your business. (3) Invest in your systems. (4) Deliver 360 network services. “Give your customers complete solutions to enable the success of their businesses.” (5) Execute.