The telecom industry has gotten riled up recently. If you have been paying attention to the news, you know that the biggest telcos are asking the FCC to make a policy change that would have huge impacts on both residential and business customers. At the end of the day, Windstream Enterprise stands for our current customers and those of you who will become our customers in the future. Our loyalties lie with you, not the big telcos.
Given current government leadership’s fervor for rolling back regulations, it’s important to remember that marketplace oversight often elevates public interests above the profit motives of monopolies and near-monopolies.
That’s certainly true of the Telecommunications Act of 1996, which sparked a wave of competition that brought more choices and in many cases lower prices to businesses and consumers. Big Telco is working hard to reverse that dynamic, pushing the FCC to repeal a key element of the Act. If they succeed, it will hit corporate America’s pocket book. And it will hit hard.
The element under attack: Among its many provisions, the Telecommunications Act of 1996 requires ILECs (incumbent local exchange carriers) to offer UNEs (unbundled network elements) to competitive providers, at prices that include a reasonable profit. This has enabled a new class of providers (like ourselves) to deliver innovative services without having to duplicate ILEC infrastructure – which, after all, was paid for in full by ILEC customers. In addition to greatly increasing service options, UNEs helped to keep costs under control by fostering competition among a larger number of service providers. In other words, we help you manage your costs while enabling you to run your business your way and better serve your customers.
Big Telco would like to increase its profits by giving consumers and enterprises fewer options at higher prices. Through the USTelecom lobby group, the ILECs are pushing the FCC to end their obligation to make UNEs available. If they succeed, the largest U.S. telephone companies will hit enterprises with a serious double-whammy:
- First, the proposal calls for giving ILECs the ability to increase rates for their embedded base of UNEs up to 15% — a cost increase it admits would be passed to end customers. The increase would take effect immediately upon acceptance of the proposal. With no incremental costs to the ILECs, it is purely a profit boost that will hit the largest consumers of services from competitive providers the hardest.
- Then, the proposal calls for the termination of embedded UNEs within 18 months, with the projected result being that “40% of end-customers will migrate to next-generation services in Year 1.” Windstream Enterprise has helped many enterprises that have already migrated, and we know that providers make considerable up-front investments of time and money so that customers can realize the benefits of next-gen technologies. While we promote next-generation networking as an option, it’s unjust to force a transition on the ILECs’ preferred timeframe, like it or not.
For these reasons, Windstream Enterprise strongly opposes the USTelecom request. Although we are an ILEC serving communities in 18 states and a USTelecom member ourselves, we’re also a competitive service provider in markets where we’re not the ILEC. We know how much enterprises have benefitted from UNEs. We also know the financial impact of an immediate 15% increase in telecommunications costs for these enterprises. And we are extremely concerned about the business disruption they’ll incur with forced migration to next-generation service within a brief window.
Simply put, this proposal is a roadmap for inflicting pain on enterprise customers for the benefit of Big Telco.
That’s why we have joined forces with other competitive service providers and champions of a competitive telecommunications marketplace to persuade the FCC to reject Big Telco’s proposal. Together, we have persuaded the FCC to extend the comment deadlines, giving all interested parties more time to review and respond to USTelecom’s proposal.
We hope to help shut down that proposal completely. If that can’t be done, we’ll press hard for a more reasonable transition period that eases the disruption ILECs are so eager to force on enterprise customers.
At the end of the day, our job is to help you transform your business by providing innovative network solutions and elevating your experience with us so you can do the same for your customers. That’s why we don’t have boxed solutions and refuse to get “boxed in’ by competitors” proposals that stand in the way of us putting you first. We’ll continue to advocate for you in these deliberations and will keep you posted on the progress as it unfolds.