The nation’s largest telecom companies have asked the FCC to stifle their competitors, a move that will enrich them at the expense of consumers and small businesses.
Windstream strongly opposes this request by USTelecom, the trade group representing local telephone companies, otherwise known as incumbent local exchange carriers (ILECs). Our position may seem strange at first glance because Windstream is a member of USTelecom and an ILEC that serves primarily rural communities in 18 states. But we are also a competitive provider serving businesses in markets across the country where we are not the local phone company.
USTelecom, at the behest of the very largest ILECs, is asking the FCC to let incumbent providers out of their obligation to provide wholesale access to unbundled network elements, or UNEs. UNEs are essentially cabling that competitors may access under current FCC rules to enter a market in a cost-effective way. This access – which competitors pay for, by the way – has spurred innovation and investment since the rules were established in 1996 and has driven the cost of telecommunications down significantly.
If competitive providers like Windstream lose the access provided by the FCC’s existing UNE rules, residential and business customers will suffer. Prices for communications services will rise, and competitors will have no choice but to reduce their fiber deployments.
I want to emphasize that Windstream isn’t suggesting we deserve a free ride in the areas where we are a competitive provider. We have invested in new switching technology and deployed our own transport network. As a result, our customers have access to the newest technologies and services, including UCaaS, SD-WAN, VoIP, and can take advantage of them to grow their businesses.
Furthermore, we will continue to invest in our own “last-mile” access where it makes economic sense to do so. But the reality is that complete replication of the ILECs’ networks is not feasible and never will be. Those networks were built over decades in monopoly environments in which all Americans shared the costs.
Of course, the true motives are plain in the forbearance relief proposal: The ILECs propose a 15% price increase upon the granting of the forbearance petition, which comes at a spectacularly bad time since rates for cabling to commercial customers have already risen substantially since last year when the FCC deregulated the Business Data Services (BDS) market, over Windstream’s objections. While is it not 1996 – as USTelecom helpfully noted in a recent blog – it is 2018, and we have over 20 years’ experience successfully employing UNEs to create choices for customers where there would otherwise be none. If the FCC agrees to USTelecom’s request, it will make monopolies again of the nation’s largest telephone companies in many markets. Inevitably, then, schools, hospitals, non-profits and small businesses in those areas will see price increases as competition evaporates.
In addition to price increases, USTelecom proposes to phase out wholesale access to UNEs over just 18 months. Competitors and their customers need a thoughtful transition period to allow a methodical movement from the traditional switched network to an IP-based application. The process of moving customers from the legacy switched telephone network to an IP-based environment is complex and often obstructed by the ILECs. Customers face downtime and must purchase new equipment. It is not an inexpensive, easy, or quick undertaking. Competitive providers should not be forced to unwind such a well-established regulatory environment in a mere 18 months.
But the larger point remains: The rationale for UNEs still exists because they support broadband services for customers in areas that simply do not justify the build-out of competitors’ networks. Wholesale access is critical if we are to have competitive telecommunications services in this country. I urge the FCC to reject this attempt by USTelecom to cement in place monopolies that will be free to abuse their customers for years to come.