Verizon Refutes Windstream Claim in Latest IP Transition Battle

Verizon is countering claims by Windstream and Incompas, a competitive industry forum, that special-construction practices and charges to deliver DS1 services are inconsistent among its customer segments.

In a letter to the FCC, Verizon specifically takes issue with Windstream’s recent claim that “unjustified ILEC special-construction charges erect an unduly high cost barrier to competitive carriers’ and their customers’ migration to new services, and often cause customers to forego orders with competitive carriers.” The letter was submitted by Curtis Groves, Verizon’s assistant general counsel, federal regulatory and legal affairs.

This is all part of a larger picture. Verizon thinks Windstream is trying to put roadblocks in front of businesses that want to move to all-IP-based services. CLECs such as Windstream rely on the ILECs’ networks for last-mile access to commercial buildings. This is just the latest attempt to get the FCC to safeguard their interests – a strategy that’s been reasonably effective to this point.

“Verizon over many months has discussed with its customers some of the concerns they raised to the commission about special construction,” Groves said. “As a result, we revised our special-construction procedures so we can better serve both our retail and wholesale customers. And, despite recent allegations to the contrary, Verizon applies the same special-construction policies to retail and wholesale customers.”

Incompas said CLECs and business service customers are “increasingly observing the imposition of unwarranted and/or excessive special construction charges being used as an opportunity for ILECs to impose de facto last-mile price increases,” especially with Ethernet cases. It proposes allowing for special-construction charges in situations where ILECs do not have facilities and ILECs certify that they will not use facilities paid for through special construction to serve a retail customer or an affiliate.

“Windstream now says even that proposal does not go far enough,” Groves said. “Disguised as a clarification of Incompas’ proposal, Windstream’s latest proposal materially changes the Incompas proposal. Windstream adds to the Incompas proposal many scenarios under which an ILEC could never charge special construction, regardless of facilities availability or a willingness to certify to no future re-use for retail.”

Verizon already absorbs much of the costs of constructing Ethernet facilities to respond to customer requests, and often absorbs all of those costs, but Windstream and others “want to shift as much of any remaining construction costs as possible to the ILECs,” Groves said. At the same time, Windstream and others are not asking ILEC competitors, such as cable companies, to operate that way,” he said.

“In Verizon’s experience, many cable companies do not absorb all of the construction costs required to provide Ethernet to a building that is not already connected to their fiber network,” he said. “And if a cable provider does not already have facilities at or near a particular building, that provider often is not willing to construct facilities to fulfill a wholesale Ethernet service order.”