US Carriers Should Fix Own Regulatory Crisis
LAS VEGAS -- COMPTEL Plus Spring 2014 -- Can US service providers cooperate on their own solution to figure out how to interconnect competing networks in an all-IP world? Sam Kline, SVP-corporate strategy for Granite Telecommunications thinks so, and he warns that the telecom carriers' failure to agree on a solution that supports competition going forward will force Washington to step in with a plan likely to burden everyone. (See Windstream CEO: Protect Interconnection and FCC VoIP Ruling Bound to Disappoint Someone.)
Kline, whose firm Granite Telecommunications LLC is a national competitive carrier, laid out what he sees as obvious realities in a panel discussion on the future of the copper network in the US. While conceding that it doesn't make sense for an incumbent telco to maintain outdated or inefficient network elements such as aging copper loops and under-used circuit switches, Kline pointed out that it also doesn't make economic sense for every operator to build out its own local distribution network, rather than share the local loops through the wholesale arrangements that exist today.
"We are better off working together here to find a solution," Kline said. "It doesn't make economic sense for us to force government regulation by refusing to find a reasonable business process that enables us to work together. "
The challenge is how competitive carriers will gain access to incumbent networks as incumbents upgrade their networks, both to eliminate aging TDM switches with IP gear, and to replace copper distribution plant with fiber. (See FCC Tests Copper Obsolescence in an IP World.)
Kline's comments came after execs from two incumbents -- AT&T Inc. (NYSE: T) and CenturyLink Inc. (NYSE: CTL) -- said their companies are not planning sweeping retirement of copper networks but nor are they interested in maintaining two networks -- copper and fiber -- or keeping aging switches in operation when they are under-utilized.
Both Gary Ludgood, SVP, global network field operations, AT&T, and Bill Cheek, president, wholesale markets group, CenturyLink, said their firms are tracking their network investments to consumer demand -- and that's tilting toward wireless connections and VoIP services, not traditional wireline voice.
CenturyLink, which has lost 70% of traditional voice lines in its 37-state region, "doesn't see the day when we will retire copper but we don't want to be mandated to maintain two networks either," Cheek said. The carrier favors interconnection at state level, he added.
AT&T is looking for the most efficient way to handle interconnection of networks in the IP realm, Ludgood added, and he appealed to a large crowd of mostly competitive operators to share their ideas. Ludgood also said he believes the period for all-IP trials will be a long one. AT&T has proposed two initial trials to the FCC. (See AT&T's All-IP Tests Won't Answer Key Questions.)
The fourth panelist, Daniel McCarthy, president and COO, Frontier Communications Corp. (NYSE: FTR), a smaller ILEC, pointed out that while consumers are shedding their wireline phones, businesses are not, and maintaining choice and competition in the business community remains a key economic driver in many parts of the US. That will require maintaining copper connections.
Competitive Telecommunications Association (CompTel) , the organization sponsoring the event and the political lobbying force for the competitive carrier industry, is the likely fulcrum point for any industry discussion, since all of the major carrier players that buy and sell wholesale interconnections attend its twice-annual events and keep its deal center hopping. Chip Pickering, the new CEO of Comptel, moderated the copper panel and kicked off the panel by saying the new transition to IP needs to carry forward the "enduring values" of the current system.
— Carol Wilson, Editor-at-Large, Light Reading