Bell Central Offices Too Dispersed to Justify Network Investment, Say CLECs
Rivals of the Baby Bells said Wednesday homes and small businesses as well as incumbent central offices linking telephone lines to them are so dispersed that they hinder local phone competitors from achieving enough scale to justify an investment in their own network facilities.
Several trade associations and telephone companies supported the argument, which was made to the Federal Communications Commission (www.fcc.gov) today in a letter.
The FCC is scheduled to issue new rules early next year governing a resale method that CLECs have particularly embraced over the last year as a way to acquire local phone customers in the residential and small business markets.
The signatories promoted the availability of the unbundled network element – platform (UNE-P) everywhere, claiming that residential and small businesses are so spread out – and Bell central offices are so dispersed – that it greatly limits a competitor’s ability to offer phone service to a large population without access to the incumbent’s network, including its switch.
But Dorothy Atwood, senior vice president of federal regulatory strategy at the No. 2 local phone company, SBC Communications Inc., said the argument is contradictory since competitors have introduced switches at most of the company’s central offices.
“If it is so uneconomical why are those switches being deployed now?,” said Atwood, the former chief of the wireline competition bureau at the FCC. “The concept that they couldn’t is belied by the fact that they have.”
In a recent proposal to the FCC, Talk America and nine other telephone companies said CLECs should be able to use the UNE-P until they achieve a certain number of customers. Competitors argue they can’t buy a $1 million core switch without owning large base of customers to justify that investment and achieve economies of scale. Talk America pegged that threshold at about 60,000 lines. But the signatories – Talk America was among them – told the FCC achieving that number of customers could be difficult.
“The bottom line is that the geographic dispersion of the mass market, coupled with the incumbents’ loop concentration choices, serious limit an entrant’s ability to deploy facilities across a broad footprint required to offer mass market services.”
Groups who signed the letter include the Association of Communications Enterprises (www.ascent.org), the Competitive Telecommunications Association (www.comptel.org) and the Promoting Active Competition Everywhere Coalition (www.pacecoaltion.org). A number of service providers also endorsed the letter. They include Access Integrated Networks (www.accesscomm.com), AT&T Corp. (www.att.com), ATX Communications Inc. (www.atx.com), BiznessOnline.Com Inc. (www.veranetsolutions.com), BridgeCom (www.bridgecom.com), Broadview Networks (www.broadviewnet.com), Data Net Systems LLC (www.dnsys.com), El Paso Global Networks (www.elpaso.com), Ernest Telecom (www.ernestgroup.com), InfoHighway Communications Corp. (www.infohighway.com), ITC^DeltaCom Inc. (www.itcdeltacom.com), LDMI Telecommunications (www.itsusnow.com), nii communications (www.niicommunications.com), Remi Communications (www.remicommunications.com), Talk America Inc. (www.talk.com), TruComm Corp., WorldCom Inc. (www.worldcom.com) and Z-Tel Communications Inc. (www.z-tel.com).
