Top Execs to Discuss Forbearance, Copper Retirement and Personal Style

By Paula Bernier

Forbearance and special access are among the key issues expected to be discussed during todays The View from the Top panel. But beyond delivering updates on such important topics, this panel should provide a fair amount of fun, considering the format COMPTEL President and CEO Jerry James has put together for this colorful cast of executives.

James expects to kick off the session which will feature XO Communications Carl Grivner, Hypercubes Ron Beaumont and McLeodUSAs Royce Holland by asking each CEO about his management style, how that style was developed, and how to create work/home balance. James also will offer the CEOs the opportunity to share their personal stories.

Next, he will ask the execs how, despite ever-changing technological and regulatory variables, they keep their companies focused for success.

The panel is expected to wrap up with a discussion about regulatory issues, including CEO views on the several recent forbearance discussions, and the question: If you got to be FCC chairman for a day, what would you do?

XOs Grivner said the market is better than its been in years. Demand on the carrier business side is growing exponentially because the dreams of the ’90s now are coming true, with end users using applications like YouTube to drive bandwidth through the roof.

Ive always said that telecom makes predictions, and its always 10 years later when things start to happen, said Grivner.

That said, Grivner believes now is the time to invest in new network infrastructure, customer service and more. For its part, XO has doubled its capital spending this year.

On the enterprise side of the business, consolidation among the RBOCs is helping competitive providers like PAETEC, XO and others, given businesses want to diversify their network service suppliers and now have fewer incumbent carriers from which to choose. But Grivner added that while consolidation over the last few years has uncluttered the market, he expects consolidation to take a pause in the coming years given high valuations.

He continued that although things are looking up for competitive carriers like XO, regulation remains as important as ever. He noted that the outcomes related to forbearance and copper retirement will be key for competitors.

Of course, forbearance has to do with the FCC not requiring the incumbent telco to provide affordable UNE loops and transport to competitors.

The incumbent telcos tend to justify the argument for this by demonstrating that there is adequate competition from the cableco in a given market that they shouldnt have to open their access networks to additional competitions. But that competition from cablecos is typically only on the residential side, not for business services, which is what the CLECs are talking about, said panelist McLeodUSAs Holland.

Holland said the FCC in December 2005 issued an order that took away Qwests obligation to provide UNE loops and transport throughout most of Omaha.

We are really the only CLEC in Omaha, where the first one was granted a couple of years ago, and we have filed with the FCC for reconsideration because we cant make a business with the price of loops, especially T1 loops, having gone up so much, said Holland. It puts us in an uncompetitive situation. And theres no pricing certainty, if they deregulate the price [of] the bottleneck. Qwest could charge us anything they desired to charge us. So we told [the FCC] that were going to pull out of Omaha and disconnect our customers and leave if they dont do something to modify the decision.

But Holland added that McLeodUSA is hopeful now that we have five FCC commissioners rather than four, like we had when Omaha went through.

Elsewhere, added Holland, Qwest has filed petitions for Denver, Minneapolis, Phoenix and Seattle, and Verizon has petitions pending in Boston, New York, Philadelphia, Pittsburgh, Providence and Virginia Beach.

At the same time, the Bell companies are abandoning their copper plant, said Holland, which is an especially pronounced problem for competitive service providers in Verizon territory.

Holland said there are reports that Verizon is cutting out copper at the pole when they overbuild with fiber. So the FCC, of course being the paper tiger, has not done anything about it, he said.

So the CLEC industry continues to push for rules that require incumbent telcos to unbundle their fiber plant.

My overall opinion is that the FCC has done a disservice to the small, competitive world by allowing the freedom that theyve [allowed] to the Verizons and the AT&Ts of the world, said Beaumont of Hypercube LLC, a tandem services provider to CLECs and other telcos. I think that we have an FCC that is very much big business-oriented, and it makes it much tougher. And, hopefully, some of these things that COMPTEL is pushing, some of the agendas, will get attention and will get approved so that competition can flourish.

COMPTEL www.comptel.org
Hypercube LLC www.hypercube-llc.com
McLeodUSA Inc. www.mcleodusa.com
XO Communications Inc. www.xo.com