COMPTEL's James: CLECs need more regulatory certainty

Las Vegas -- Jerry James, CEO of COMPTEL, said during the keynote speech at this week's COMPTEL Spring 2013 event that the biggest challenge its member companies face, particularly CLECs that deliver competitive services, is a lack of regulatory clarity.

Jerry James, COMPTEL

James (Image source: COMPTEL)

The three "hottest" items the industry association is advocating for at both the state and federal regulatory level are SIP interconnection, last mile access, and special access, James said.

"The network technology, as we all know, has been evolving to a managed IP network, which enables our members to offer managed services," he said. "We also need to make sure that whenever we change technology we don't change the regulatory compliance rules, and competition has to have those to stay in place."

James said that with SIP interconnection, COMPTEL doesn't want to hold anyone back, but wants to enable easier ways for its members to work with large incumbent service providers so they can deliver managed services to their customer base.

"What we're not doing is trying to pull back the clock and restrict other carriers from doing what they want, and we don't want to regulate the Internet because what we're talking about is managed voice over the network so we can exchange traffic," he said. "SIP interconnection for us is interconnection with these managed networks for the support of these managed voice services and not for over-the-top (OTT) VoIP services."

Even though the technology has changed, many of the rules that were set by the FCC's 1996 Telecom Act--such as sections 251 and 252--are still relevant today.

Another issue that has been confusing to both CLECs and smaller ILECs is Intercarrier Compensation (ICC) and Universal Service Fund (USF) reform. Under the new rules set by the FCC, the regulator in 2011 developed a proposal to realign the USF and ICC structure by refocusing the Universal Service Fund toward funding new broadband rollouts.

"The intercarrier compensation order that many of you were affected by, the FCC did ask for parties to come together on a good faith basis, but we need more from that," James said. "We need more clarity from the FCC."

One ray of clarity has begun to emerge as some states have begun to adopt a technology-neutral regulatory stance, while the Canadian Radio-television and Telecommunications Commission (CRTC) has developed a policy for SIP interconnection.

But one of the most pressing issues for CLECs is getting access to the ILEC's last-mile copper to deliver Ethernet over Copper (EoC) services to their business customers.

A number of the largest CLECs such as Integra, XO and TelePacific and even some ILECs like CenturyLink (NYSE: CTL) and Windstream (Nasdaq: WIN) have been expanding their EoC footprint to extend Ethernet services where they can't immediately prove out a business case for fiber.

"We have had a robust effort in our nation to serve the small to medium business (SMB) market with the most ubiquitous network in our country, which is copper," James said. "We have advanced the technology over copper to create new products and services."

By having a competitive wholesale market, says James, CLECs and other providers can provide a good quality of experience for their end-user customers.

To help stimulate regulatory action at the FCC over the danger of copper retirement action being taken by the larger telcos like AT&T and Verizon, COMPTEL filed comments with the regulator last week.

Among other issues, the filing--which cites a letter written by Joshua Brobeck who represents TelePacific, an aggressive advocate of EoC--asks the regulator "to take expedited action to update its copper retirement rules to preserve and promote affordable broadband over copper."

The filing said that while it does not debate that service providers like AT&T are going to transition their networks to fiber over time, they "should provide options and accurate information on those options."

While there has not been specific reports of copper retirement hurting an end user, it does have the potential to impact an SMB that uses EoC services.

COMPTEL wrote in its filing that unless the FCC revisits its rules it could drive up the costs that SMBs pay for services.

"The ILECs have not demonstrated that there is significant burden to making copper available," COMPTEL wrote in its filing. "Moreover, since the ILEC is permitted to retire copper without making a functionally and equivalently priced alternative available to competitors, under the current rules, the ILEC is, in effect, permitted to escape its unbundling requirements without having to meet the statutory standard for forbearance."

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