Will Telecom Rewrite Inspire Provider Makeovers?

When their current business plan goes out of style, companies need a fresh new look to attract customers and increase profitability. In todays executive roundtable, COMPTEL attendees will hear from members who have revamped their business models to keep up with the changing times.

Panelists include Hank Carabelli, president and CEO of Pac-West Telecomm Inc.; Bill Capraro, CEO of CIMCO Communications Inc.; Michael Gallagher, president and CEO of First Avenue Networks; and Bill LaPerch, CEO of AboveNet Inc.

Weve gone through some rather turbulent times in terms of transitions at the FCC and in terms of changes in the rules, said COMPTEL President and CEO Earl Comstock, who will lead todays discussion. Many of these companies have had to do extreme makeovers of their business plans to continue to function. I think these folks have been successful at making that transition.

Pac-West, for example, has transitioned from a regional CLEC to a nationwide enabler of custom phone companies.

The company divested its retail CLEC business in a sale to TelePacific Communications and is in the midst of expanding its network nationally to provide a platform bridging the PSTN and the Internet for VoIP, wireless, Internet and other service providers.

And, First Avenue is formerly Advanced Radio Telecom Corp. (ART), a peer to the ill-fated LMDS providers.

ART filed and emerged from Chapter 11 bankruptcy in early 2002. Its name change was not merely cosmetic; the company has been rebuilding with new assets (it bought Teligents 24GHz spectrum licenses in 2004) and a primarily wholesale business model.

Comstock said the roundtable presents an opportunity to talk about these transformations and how they see potentially having to do this yet again if Congress were to significantly change the rules once again.

Comstock is frank about the negative impact current proposals to rewrite the Telecommunications Act of 1996 might have on its members businesses. Certainly, if the Ensign bill or either of the Barton drafts or the DeMint bill were adopted that would have significant adverse consequences for the entire competitive industry, he said.

Last fall, Democrats on the House Energy and Commerce Committee were upset when

Chairman Joe Barton, R-Texas, brought out a revised version of an earlier draft of the Broadband Internet Transmission Services (BITS) Act that went much further toward serving Bell companies interests than before. The House committee draft differs in some respects from the leading Senate bill on telecom reform, Broadband Investment and Consumer Choice Act, which was introduced last summer by Sen. John Ensign, R-Nev., but in overall thrust, the two measures are largely in sync .

Sen. Jim DeMint, R-S.C., introduced the Digital Age Communications Act of 2005 in December 2005. It also takes a laissez-faire approach to broadband.

The common issues most COMPTEL members are concerned about is where does interconnection and access to networks fit into the picture? said Comstock.

He concedes todays roundtable is, in part, an effort to help educate the industry on the potential impacts of proposed changes to the law and also galvanize them to be heard in Congress and see that the changes that would adversely affect them would not be made.

The lack of required interconnection and the imposition of a two-tiered Internet are among the provisions most likely to inspire opposition, he said.