Windstream says AT&T's IP pilot doesn't address FCC's wholesale rules

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Windstream (Nasdaq: WIN) wrote in a filing with the FCC that AT&T's (NYSE: T) current proposed plan to conduct TDM to IP transition trials in Alabama and Florida does not take into consideration a number of the regulator's wholesale service rules.   

In particular, Windstream said that AT&T's proposal does not address three key requirements set in paragraph 59 of the FCC's Technology Transition Trials Order. Those requirements revolve around how to provide comparable wholesale services with equivalent prices, terms and conditions; offering similar wholesale access to AT&T's network; and ensuring that neither wholesale nor retail customers are penalized as a result of the experiment.

Although AT&T's proposal addresses how the transition would affect the retail side of its business, Windstream said it does not provide enough detail about wholesale.

"The AT&T Proposal is far more fully defined and articulated with respect to the transition of AT&T's retail products and customers than its wholesale products and customers," Windstream wrote in its filing. "Thus, it is not clear that AT&T's trial will 'identify operational issues posed by technology transitions and their impact on customers, including any operational challenges arising between applicants and their wholesale customers and competitors.' Indeed, at the time of filing AT&T was not even able to articulate the 'specific extent of wholesale activity' in the wire centers."

Besides a lack of clarity on replacement services, Windstream said that all of the details AT&T could provide about the trials can't be seen by its wholesale customers.

"Despite AT&T's recognition that 'it is important to be transparent about how [wholesale] issues fit into the overall IP transition,' much of the little detail AT&T has provided thus far has been pursuant to Protective Order and thus is inaccessible by its wholesale customers," wrote Windstream. "Thus, while Windstream is interested in opportunities AT&T may present to convert Windstream's business customers to all-IP services, Windstream is unable to provide meaningful comment on the proposed wholesale transition until AT&T provides and makes accessible to the public further details."

Understanding the impact of the TDM-to-IP trials taking place in the Carbon Hill, Ala., and Kings Point, Fla., wire centers is important for Windstream because it purchases wholesale services from AT&T to deliver services mainly to small businesses.

On average, the business customers Windstream serves out of AT&T's Kings Point wire center have five employees, while another 90 percent have less than 50 employees.

Since many of the businesses it serves--a group that includes restaurants, doctors' offices, independent retailers and florists--are typically housed in a single or a few locations, their bandwidth requirements for standard POTS and data services can be delivered over a DS0 or DS1.

Windstream is not alone in its frustration. Fellow CLEC Granite Telecommunications, which also provides services to area retailers in both markets, agrees that the IP transition and copper retirement issue should take into account what effect it could have on the business customer.

While it is not opposed to delivering IP services, Granite adds on average 1,000 plain old telephone service (POTS) lines a day for its multi-site business customers.

Sam Kline, senior vice president, corporate strategy for Granite Telecommunications, said during a recent panel discussion at the Spring COMPTEL trade show that "business customers are not moving as fast as residential customers" off of the PSTN.

For more:
- see this FCC filing

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