COMPTEL SOUNDS BATTLE CRY ON BELL DATA LEGISLATION
ORLANDO -- Panel of Washington insiders told CEOs of competitive telecom companies here Mon. that they must become more involved in lobbying against Bell-sponsored data LATA relief because there was better chance than ever that such legislation could pass. Speaking at CompTel’s annual convention, panelists came close to pleading with competitive entrepreneurs, who traditionally are less likely than Bell CEOs to get involved in policy issues. They warned that their businesses could be at stake; that House, at least, was likely to pass data deregulation legislation this session and that Bells were very good lobbyists. “You need to make clear why this legislation could be a danger to this industry,” said Gary Slaiman, Washington attorney and former aide to Senate Judiciary Committee. Earl Comstock, Washington lawyer and former legislative counsel to Sen. Stevens (R-Alaska), told group, “Bell CEOs are engaged, they come to Washington. Your industry CEOs don’t often come to Washington and you have a complicated message.”
Panel was only part of CompTel’s push for legislative action at this convention. Organization has set up kiosks to gain pledges from members to send letters and donate money to effort, calling it “Break the Bottleneck” campaign. Flyers that showed up at every session ask for $2,500 donations. “We face a grave threat in Washington,” CompTel Pres. Russell Frisby warned at start of general session Mon. At issue is Bell companies’ effort to gain freedom from regulatory restrictions on their provision of data services, for example by offering data services that cross LATA lines without obtaining Sec. 271 authorization. Competitive industry officials fear Bells won’t be as likely to open their local networks to competition if they gain even partial deregulation. “None of our past battles reached the importance of the battle we are about to embark on,” said CompTel Chmn. Douglas Hanson, CEO of Internet Commerce & Communications: “I am not overstating the seriousness of this issue.” He said last year’s data LATA bill obtained more than 200 signatures because “we were not on the Hill enough” and as result “Bells are playing the tune.” Hanson said, “we're talking about getting engaged in the political process to win the war of 2001.”
Washington panels, all former or present Hill aides, said best bet for competitive carriers was to emphasize their industry’s positive effect on economy when they talked with govt. leaders. They urged CEOs to talk to House and Senate members, in Washington or at home, local dignitaries and anyone else whose views might “filter up” to Congress. Senate isn’t as likely to pass Bell data bill as House, where its key sponsor is House Commerce Committee Chmn. Tauzin (R-La.), said Gregg Rothschild, legislative dir. to Sen. Kerry (D-Mass.). There’s “no champion” in Senate and some senators such as Hollings (D-S.C.) and Stevens “are on your side,” he said. However, he said Senate might become more interested in such legislation if “Bells get smart” and align with cable industry on broader-based data deregulation bill as Verizon, for one, has proposed. “That could change the debate,” he said.
Competitive industry also must work to offset argument by Bells that members’ rural constituents want broadband services and can’t get them because Bells are hamstrung by regulations, Comstock said. Competitors should point out that they could be serve those rural customers if Bells didn’t “drag their feet” in providing connections for competitors, he said. He also advised competitors to “change the message,” which he said can be confusing now. When competitors start talking about access and UNEs (unbundled network elements), “members’ eyes glaze over,” he said. “You need to simplify your message,” he said. “This is an economic issue.” Rothschild said Bells had “relationship” with Congress for long time “and we tend to see more of them than you.” Bells tell Congress their local networks are open and “that’s the image that stays in members’ minds if you're not there,” he said.
With new Administration, “you have a great opportunity to teach,” said James Derderian, policy dir. for Bush-Cheney Transition Team and former aide to ex-House Commerce Committee Chmn. Bliley (R-Va.). Telecom wasn’t big issue during campaign, and Administration’s “approach to most regulatory issues is ‘let’s let the states do it,'” Derderian said. However, Administration will turn “willing ear” to issues effecting economy, he said. He also urged more political activism by competitive leaders: “You're smart and you work like dogs in every area but this one. Be as good at this as you are in everything else.” -- Edie Herman
CompTel Notebook…
FCC’s planned detariffing of long distance providers rates is “worst thing that could happen to you, worse than the Bells’ getting into your markets,” Excel Communications Asst. Gen. Counsel Marcy Greene said Tues. at CompTel. She said detariffing could make it very hard for long distance providers to change rates. There’s clear process for posting rate changes under tariffing, she said. If tariffing goes away, long distance providers will have to enter into contracts with customers and notify each of them if rates change to avoid contract violation, she said. Adding to complication is that, instead of working under one set of rules, industry will be bound by contract law in 50 states, Greene said. She said her company was trying to figure out what its obligations would be under contract law. “My understanding is that if we raise the contract rate we have to give notice,” she said, but it was unclear whether such notice could be placed on Web page or whether more complicated process would have to be followed. If customer’s service is Web-based, online notification might work, she said, but if it were sold “face to face,” regulators might seek more direct approach, Greene said. Asked from audience about using recorded announcement when customer placed call, she said AT&T tested that approach and found customers didn’t like interruption as they prepared to place call. “Some carriers are saying they don’t have to give notice” while others are debating charging less for Internet-based service because notification of rate changes would be cheaper than other types of services, she said: “I don’t have the answers yet.” -- EH
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“You've got a lot of work to do to make sure competition prevails,” ex-Rep. Thomas Bliley (R-Va.) said at a dinner at CompTel convention. Referring to pro-Bell initiatives on Hill, he told group that “You need to strengthen this organization because there are new folks in Washington and the outcome is uncertain.” Bliley, ex-House Commerce Committee chmn., was among people inducted into CompTel’s “Champions of Competition” hall of fame. Others honored, some posthumously, were the late William Baxter, Dept. of Justice antitrust chief leading up to AT&T divestiture; Anne Bingaman, Valor Telecom chmn. and ex-DoJ antitrust chief; WorldCom CEO Bernard Ebbers; the late U.S. Dist. Court Judge Harold Greene; Sen. Hollings (D-S.C.); Rep. Markey (D-Mass.); the late William McGowan, MCI chmn.; Simplexity Chmn. Alan Peyser, founder of several competitive companies who also is ex- CEO of Cable & Wireless; Sen. Stevens (R-Alaska); McLeod USA CEO Roy Wilkens who founded WilTel Network Services in 1980s. Along with Bliley, Bingaman was one of few who attended dinner, telling audience that being antitrust chief after passage of Telecom Act was “one of the things I'm proudest of” although it was hard because “the forces of evil were awesome.” Keynote speaker Howard Janzen, Williams Communications CEO, said current competitive industry is “standing on the shoulders” of those being honored because they were ones who forged competitive environment.
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Concern about on-line privacy is starting to percolate in Congress and state legislatures, driven by constituent pressure, panelists said Mon. at CompTel’s annual convention in Orlando. Gregg Rothschild, legislative dir. to Sen. Kerry (D-Mass.) said there’s no consensus on Hill about what to do but “the odds of seeing legislation are somewhat better than for telecom [bill rewrite] because the impetus is from constituents.” He said “Congress is reactive and no one is writing letters saying we have to deregulate the Bells,” other than Bell executives. “We do get letters on privacy more and more,” he said. He said his boss would support requiring companies to have privacy policies that give consumers right to opt out of information collection. At issue is ability of on-line providers to collect marketing information based on consumers’ buying habits. Difficulty for Congress is how to weigh consumer benefits against “dangers of regulating emerging technologies,” said Rothschild. Amazon.com Vp Paul Misener strongly argued against regulation, saying it’s not fair to regulate on-line but not off-line sales, particularly when there is so much competition for on-line products and it’s so easy for consumers to switch. Market conditions would “discipline” those who didn’t properly protect consumer privacy, he said. While some on panel suggested industry might want to develop national standards to ward off legislation, Misener opposed that as well, saying privacy arrangements should be left to individual companies. He said his company’s privacy policy is part of its image. Nonetheless, there’s push for regulation “in state houses all over the country,” Misener said, adding that it would be extremely difficult for national company like Amazon.com to meet numerous different state requirements. There has to be federal preemption of such state laws, he said. He also pushed for bar on private law suits if any privacy regulations are instituted so “ambitious trial lawyers can’t pound us with class action suits.” Washington attorney Gary Slaiman said one survey showed 80% of consumers oppose sharing data even within company that obtained it and 71% think federal law is needed.
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BellSouth is beefing up its wholesale services to CLECs and others by shortening provisioning and maintenance cycles, adding products and introducing new pricing plans, company announced Mon. at CompTel conference in Orlando. Bill Smith, pres. of BellSouth Interconnection Services, said company is spending $500 million on project, which includes addition of 1,100 technicians. Smith said industry spawns some “crazy relationships” with BellSouth both competitor and supplier to its wholesale customers but company is very committed to this unit because in its 4 years of existence it has grown to over $4 billion in revenue. Three-prong expansion plan includes: (1) Provisioning and maintenance intervals will be shortened by adding staff and “pre-deploying” facilities based on customer forecasts. BellSouth said, for example, it has established 5- and 8-day service intervals for DS-1 products and customers can go on Web to determine which of those intervals applies to their particular services. (2) New product lines are coming out including those that will connect local area networks (LANs) to SONET services, which Smith said will enable customers to “take advantage of the circuit oriented world and packet switching.” (3) New pricing plans as result of FCC’s granting pricing flexibility to BellSouth. New pricing plans will offer flexible volume and term arrangements. Wholesale unit serves long distance companies, CLECs, wireless providers, resellers, independent phone companies and others. Sprint also announced expanded line of wholesale data products and managed services that it said is comparable to services available to its retail customers. New services announced at CompTel conference Mon. include dial, dedicated and “burstable” IP; ATM; frame relay; shared, dedicated and custom Web hosting; managed network services.