The big telcos’ push to bail out on wholesale obligations that have helped fuel innovation in communications services since 1996 will cause tremendous pain for customers if the FCC agrees to it.
Two sources of that pain – higher prices and less competition – are obvious. Today, I want to take a deeper look at some of the less obvious causes.
In my role at Windstream Enterprise, I’m responsible for service delivery, repair, customer care, and field operations. Bottom line, that means I’m held accountable for making sure our customers get the kind of robust, state-of-the-art communications services they need to operate their businesses in the real world. I live this stuff every day – and believe me, customers aren’t shy about letting me know when things don’t go as expected.
I assure you, for many businesses, there’s going to be a lot chaos they never expected if the big telcos’ proposal, put forward by their trade group USTelecom, goes through.
As a quick reminder, the USTelecom proposal would require the conversion of all UNE, unbundled network elements, like DS0, DS1 and DS3 that are used extensively by CLECs to support customer services and to connect their network facilities together. If the FCC agrees to this request as written, the big ILECs would be able to raise rates immediately by 15 percent, and they would no longer be required to provide UNEs after just 18 months.
The hidden impacts to customers that are forced to go through this technology change will be as significant as the obvious price increases. Certainly, there will be disruption for our customers who are required to modify their business priorities in order to rush through a complex transition. These opportunity costs cannot simply be ignored, as the big telcos would like.
Windstream wants our business customers to have the opportunity to purchase the latest telephony services, including the over-the-top products that leverage them. But we also want our customers to make this transition on their terms and at the cadence that makes sense for their businesses.
For years now, we have been converting customers from UNE services to next-generation products, and I can tell you the effort to do that isn’t trivial, whether the customer is a small business or a large enterprise. A successful conversion requires that Windstream and our customer be fully aligned after thoughtfully reviewing the available service options, the implications for the customer’s existing network architecture, the customer’s future needs, and the impacts on the customer’s hardware and applications. And, after all of that is accomplished, the conversion still must be executed, a complex process that requires careful planning and close collaboration.
In some cases, these steps can take years from the initial Request for Pricing to the completion of all site conversions. How the big telcos could declare with a straight face that “40 percent of end-customers will migrate to next-generation services in Year 1” is a mystery.
In addition to the opportunity costs, customers will have to spend real dollars to support this technology conversion, including project management support; facility rework and preparation (wiring, space, power, etc.), and hardware replacement (switches, routers, firewalls, phones, etc.). Add this to the big telcos’ 15 percent price increase, and the pain customers will suffer is substantial.
Likewise, the expense to Windstream, in both real and opportunity costs, is significant. Having to fund incremental resources (service delivery and field operations) to accelerate converting customers from one access technology to another with limited incremental revenue opportunities, will be challenging. Additionally, the accelerated timeline will cause Windstream to focus exclusively on the access solution transition and lose the opportunity to have a broader discussion with our customers about their total service needs. Our customers want us to be a strategic partner rather than a simple service provider, and this rushed transition could preclude us from being just that.
Ironically, our ability to help our customers rush through this transition in 18 months depends on the ability of the big telcos to keep pace. With their current conversion capacity, it would take 3-5 years to complete the transition. Think about that for a moment. Clearly, the big telcos know this. There’s no need to ask why they chose this ridiculously short timeline because we all know the answer rhymes with “honey,” and in this case, they mean to grab it all for themselves.
Which reminds me of an old saying that my grandmother – and maybe yours, too – liked: “You catch more flies with honey than you do vinegar.” If the big telcos’ and the FCC will agree to work with Windstream and the CLEC community, there’s a way to make sure everyone – customers, big telcos and competitors – gets to share the honey.