TIA NOT ENTHUSIASTIC ABOUT COMPREHENSIVE USTA LOBBYING EFFORT

Telecom manufacturers have interests in seeing some telecom regulations changed, but aren’t likely to fully support USTA’s efforts to make wholesale changes to telecom regulation (CD Nov 3 p1), TIA Pres. Matthew Flanigan said. While there are some areas where TIA will continue to work with ILECs, the specific proposals advanced in an Oct. 20 meeting were too ILEC-oriented to get the support of manufacturers, he said. “We'd be happy to stand arm-in-arm if all carriers are arm-in-arm,” said Flanigan, who said CLECs, cable, wireless and long distance providers are also important customers to TIA members. “But that’s not the case here. This is an ILEC-directed attack.”

USTA and several Bell CEOs met with several manufacturing CEOs recently in an effort to raise nearly $40 million for a 5-year lobbying campaign to loosen, reform or eliminate such regulations as unbundled network elements platform, universal service fund, TELRIC pricing and broadband regulations. But while TIA was active in supporting the relaxation of broadband regulations, it’s not likely to support ILECs on regulatory reform on issues like UNE-P and TELRIC pricing, officials said.

The TIA board met last week and the USTA proposal was a “hot topic,” Flanigan said. But members of the board had a lot of concern about the proposal, he said, especially after some CLECs raised antitrust concerns: “They got very nervous about that.”

TIA board members were reluctant to back a campaign that would favor one segment of the industry over another, said Flanigan, who added that telecom manufacturing industry prides itself in its independence. During the meeting, the board adopted a “sense of the board” statement that emphasized “TIA and its constituent members are best served by maintaining a high degree of independence in the formulation of public policy positions of importance to the telecom sector.”

The “sense of the board” statement describes where manufacturers and LECs can develop a consensus. The statement said: (1) In many cases, TIA member companies and their consumers interests have been “highly convergent” and proved mutually beneficial. (2) “TIA and its member companies’ credibility with the FCC and on Capitol Hill is very high and must be protected in order to sustain the effectiveness of our advocacy efforts going forward.” (3) TIA member companies include the entire range of enterprise customers and service providers, including wireless, wireline, satellite, cable and ISPs. (4) TIA and its customers should focus on improving the health of the telecom sector, restoring lost jobs, maintaining fair competition, increasing investor confidence and providing valuable services to American businesses and individuals.

Part of USTA’s effort is to raise nearly $40 million for the 3-5 year lobbying campaign. During the recent meeting, USTA was asking for $1.5 million over 3 years from manufacturers. Flanigan said he wasn’t aware of any TIA member companies willing to make that commitment to USTA. Asking manufacturers for $20 million is “totally unacceptable,” Flanigan said. Also, Flanigan said the telecom sector slowdown has hurt manufacturers more than ILECs, so they're less likely to devote such sums of money to a campaign. “True, the ILECs are going through some tough times, but their revenues are rather strong and most are still in the black,” he said: “In some cases, manufacturers’ revenues have gone down to half what they were. They're the ones bearing the brunt of the telecom downturn.”

TIA did work actively with USTA on broadband issues, Flanigan said, as both supported loosening broadband rules in the FCC’s Triennial Review. TIA is a member of the high-tech broadband coalition that supported the FCC’s unbundling of new ILEC broadband deployment. But in the near term, Flanigan said there aren’t other issues that will garner such TIA support. Flanigan said TIA was examining the FCC’s rulemaking on TELRIC prices and could file comments in that case.

Flanigan also said none of the 10 CEOs invited to attend the meeting had been notified of the subject matter in advance. “It was quite a surprise,” said Flanigan, who said some of the attendees were turned off after being caught by surprise.

But USTA Pres. Walter McCormick had a different impression of the meeting. He said it was “enormously positive,” and the meeting was in direct response to Congress’ call for industry makers to “get together broadly to develop a consensus.” “What TIA has said is needed for the manufacturing community to return to profitability is remarkably consistent with what we're calling for,” McCormick said. “It was a very positive meeting. There is remarkable consensus as to what the important public policy objectives are.”

McCormick said the goal of the campaign will be to shed more than a century of regulations of the telecom system. “We are looking for a public policy that will encourage investment and that will eliminate the regulatory lag and uncertainty that has been created by government micro- management of the marketplace,” McCormick said.

Also, McCormick discounted antitrust concerns. He said industry leaders’ getting together to talk about regulation is “entirely consistent” with antitrust laws. He said the CLECs that complained about the meeting said they themselves meet “and in many cases enjoy the same kind of supplier- purchaser relationships that they criticized us for,” McCormick said. McCormick said it was a political issue, not an antitrust issue.