CLEC Trade Group Vows to Break Bell ‘Bottleneck’

To lossen what the Competitive Telecommunications Association (CompTel) calls the Bell companies’ stranglehold over local market access, the association is vowing to “Break the Bottleneck.”

In a press conference marking the fifth anniversary of the of the 1996 Telecommunications Act, four chief executive officers representing the competitive local exchange carrier (CLEC) and Internet service provider (ISP) industries stressed local competition is on the rise, but claimed specific concerns about the anti-competitive business practices of the regional Bell companies are still a major impediment to competition.

They said that the promise of the Act is not being fully realized because all market entry methods — through interconnection, resale and unbundled network elements — are being delayed through a lack of enforcement. The CEOs are in Washington to present their views to lawmakers.

“This is a critical year, as we face the very real possibility that the Bell companies could remonopolize the industry,” said H. Russell Frisby, Jr., president of the Washington, D.C.-based CompTel. “The Telecommunications Act is not an elective — it’s the law, and the competitive industry is getting tired of the Bells’ favorite dance: sidestepping and backsliding on their obligations under the law.”

The Bell companies “have waged a five-year campaign of lawsuits, delaying tactics, and non-cooperation to prevent the Act from being fully implemented,” he added. “The problem — and its solution — lies with local market access. The four behemoth Bells have yet to relinquish their stranglehold and are stronger than ever-squeezing out competitors with surgical precision and targeting advanced services competitors to extend their monopoly into the Internet and advanced services markets.”

Doug Hanson, CEO of Denver-based Internet Commerce and Communications and CompTel’s chairman, described how the Bell companies are trying to extend their local exchange monopolies into the Internet market.

“The Bells are willing to pay fines rather than give up their local market monopoly or follow the rules,” he said.

Richard Burk, chief executive officer of nii, based in San Antonio, Tex, and a member of CompTel’s executive committee, addressed the problems that competitive carriers face in accessing and using the Bell companies’ unbundled network elements. “Real progress is being made, but only where the Act has been enforced and allowed to work. Unfortunately, the Bells seem to think they are entitled to decide where and when that is.”

Sean Minter, chief executive officer of Dallas-based IP Communications Corp., pointed out that the 1996 Act made no distinction between voice and data, and that the Bell companies’ demands for so-called “data relief” to provide long-distance data services ignores that reality.

He also warned that attempts to establish advanced services subsidiaries — as SBC has done with its “Project Pronto” affiliate — and the Bells’ reluctance to cooperate in the area of line-sharing and line-splitting reflect an unwillingness to abide by the pro-competition, pro-consumer tenets of the Act.

Jerry James, president of Grande Communications, based in San Marcos, Tex., and a former CompTel chairman, called for continued and effective enforcement of the Telecommunications Act, as well as certain enhancements that would help prevent any potential backsliding by the Bells on their market-opening obligations to competitors and consumers under the Act.

James explained how the structural separation of the Bells’ wholesale and retail arms would help prevent RBOCs from using their market power to inadvertently discriminate against competitors and make it easier for regulatory authorities to detect any such discrimination when it occurs.

“Competitors need meaningful and timely remedies to resolve such disputes and, when these same problems continue to occur or are widespread, re

gulators need to be able to respond quickly to these matters and have the tools to enforce compliance, including the right to assess punitive damages for repeated violations,” said James.

Added James, “The fact that a large number of interconnection agreements exist is not the yardstick of competition-competition is determined by the number of consumers who have a real choice among service providers. Our goal as an industry is to provide such a choice, but we need time for competition to continue to mature in urban and rural markets. With competitors’ holding only 6 to 8 percent of the local market today, it is clear that competition is coming and making an impact, but it has yet to completely arrive.”

CompTel represents trade associations representing U.S. and international competitive communications firms and their suppliers who offer a variety of local, domestic and international long distance, Internet and wireless services. The association’s members include global and national firms, regional carriers and emerging integrated communications providers.

The association is located on the Web at

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