with Chip Pickering, CEO of Comptel
Chip Pickering, one of the key architects behind the landmark 1996 Telecom Act, took over the helm at Comptel as CEO in January. One of his initial goals after taking over the competitive telecom industry group was to expand its membership by adding a group of international providers, wireless operators and even other incumbent telcos such as BT (NYSE: BT), Vodafone, US Cellular and AT&T (NYSE: T). The rest of 2014 and 2015 will be a pivotal time in the competitive telecom industry as the FCC grapples with three major issues: last mile access, copper retirement and VoIP interconnection. Sean Buckley, senior editor of FierceTelecom, caught up with Pickering at Comptel's fall show to talk about his first nine months on the job and how he sees the growth of Comptel and the changing competitive service provider landscape.
FierceTelecom: You took over the helm of Comptel in January. To start, can you talk about your first nine months on the job and what goals you have set so far?
Pickering: The first nine months have been focused on growing our membership. What we have communicated throughout the show is the tremendous growth of Comptel as we expand into other parts of communications and technology sectors. We will have members that are not only in our core and historic membership in enterprise and business where we have leading companies like XO, Birch and many others that have joined over the last nine months.
We're also seeing leading Internet companies, international companies and wireless companies join Comptel. For example, in the Internet and over-the-top sector we will be announcing Netflix (NASDAQ: NFLX) as a member. We're also adding Amazon (NASDAQ: AMZN), and Google Fiber (NASDAQ: GOOG), and Angel List, a company that matches angel funds and venture capital with startups. On the wireless side, Softbank, T-Mobile (NYSE:TMUS), US Cellular, Cavalier Wireless and Vulcan Wireless have joined in the last nine months, giving us a full slate of wireless networking companies. On the international side, BT, Vodafone have joined. On the incumbent carrier side are members that are important to our show and create as many business opportunities for our members as possible. These carriers don't work with us on the policy side, but they do work with us in the marketplace. AT&T and Frontier joined this year and Verizon (NYSE: VZ) has been a long-standing member. With Windstream, TDS, AT&T and Frontier, we have an almost nationwide carrier incumbent membership represented in Comptel. We're working to complete and have all incumbents as part of not only our show, but in our membership. We believe diversifying and expanding the growth of Comptel will help us in our advocacy and be more effective. It will strengthen our show and will give our members greater opportunities to network, do business with each other.
On the advocacy side, FCC Chairman Tom Wheeler's keynote looked at issues related to special access reform, IP transition, the future for VoIP interconnection, and the standards that will establish wholesale competition not only in the present, but will give certainty in the business market with wholesale and last mile access. The two primary initiatives in the first nine months have been to grow Comptel and to create policy decisions necessary to guarantee our members' future success and prosperity.
FierceTelecom: One of the hot button issues for the competitive telecom industry is the drive to rework the 1996 Telecom Act. As one of the key participants in drafting the '96 Act, what do you think needs to be in the revised version?
Pickering: At the end of our show, we sponsored a workshop that had former members and current staffers and leaders in the policy arena that looked at what principles should guide and what process should form any potential rewrite of communications and technology policy in Congress. There's a good possibility that the Senate will go from a Democratic majority to a Republican majority. With the House already in the hands of the Republicans, the potential for an effort to start the process of what areas of competition policy need to be strengthened, modernized and what parts of FCC should be reformed to fit a modern marketplace that reflects today's realities versus the past structure of the FCC. We believe our membership really represents the future of communications and technology markets. With this membership, we believe we'll have a strong and effective voice in any reform or rewrite. When we can combine the Internet, wireless, enterprise and fiber companies, their voices need to be heard in an effort to change what has been an extremely successful policy based on the 1996 act.
FierceTelecom: Another issue is the TDM-to-IP transition. Can you talk about Comptel's perspective on that process and what your member companies' key concerns are?
Pickering: Our basic message is a trial without competition is no trial. The only successful experiment is one that promotes and maintains competition prior to the trial, during the trial, and after the trial. We will work with any incumbent anywhere, anytime to experiment with them on how to make the transition work. We want to accelerate the transition. Most of our members have been deploying IP networks and IP technologies. It's much more efficient and what the country needs. We now need the incumbents to join the rest of the IP world so we want to do everything we can to accelerate that transition while at the same time maintaining the enduring value of promoting competition.
FierceTelecom: In tandem with the TDM-to-IP transition is special access. What's Comptel's perspective and what is being done to ensure fairness?
Pickering: It's been a long drawn-out battle, but the good news is that the data collection on special access has been ordered. It's been modified in a better way that will reduce the burdens on small businesses. It will look at the most recent year without overextending or burdening those that are providing the information to the FCC. It has a very timely deadline of December 15 of this year so the data will be able to inform the FCC on what reforms are necessary in the special access marketplace in 2015. We also expect the chairman will look at steps that can address some of the elements and some of the practices in the special access market such as lock up contracts--something called "volumes and conditions" that require competitors to stay with an incumbent if they give 90 percent of all of their business to an incumbent and lock in for long periods of time. The practical effect of those contracts is that it reduces competition and reduces the incentives for our competitors to deploy their own networks. It really locks the market and their competitors into a disadvantageous position.
FierceTelecom: There are a number of multi-billion dollar acquisitions taking place: AT&T and DirecTV; Comcast and Time Warner Cable; and Level 3 and tw telecom. What effect are these deals going to have on the competitive environment?
Pickering: I think Level 3 and tw telecom will be strengthened by their merger. As our member companies and industry look to form and invest in each other to grow their scale to compete against the incumbents, it's still also very, very important that small and mid-sized companies have access to last mile and wholesale so they can continue to do well so that we have small, medium and large companies in the enterprise and business market. If the right policies are maintained, you can have a vibrant competitive industry as well as incumbent companies.
The Comcast (NASDAQ: CMCSA) and Time Warner (NYSE: TWC) merger does create a lot of concern for our members. Similar to how the T-Mobile and AT&T merger was a step too far in the wireless market, there's growing concern that the Comcast/Time Warner is also a step too far in the broadband market. The anti-competitive issues on video would have a harming effect on a lot of our companies who want access to video as they deploy their networks and in urban markets and rural markets in the country.
FierceTelecom: The E-Rate program is also being reworked by the FCC. What would you like to see with that revision?
Pickering: This is another example where competition is the answer. What we see when we have a competitive bidding for E-Rate services, prices of E-Rate services are dramatically reduced and the quality is dramatically increased. The other benefit when you do it through a company like Fatbeam is E-Rate gives them the ability to deploy to a school, but then from that they can deploy to other parts of the city or the community. All of a sudden you created advanced network capability for whole connectivity because you brought competition. We'll continue to advocate that E-Rate reform has as much competition as possible because it's better for the taxpayer and it's better for other deployments that bring competition to the marketplace.