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Windstream Letter a Game Changer.

It’s always easier to see both sides of an issue when you have one foot in each camp. That is the case for Windstream, a Broadband Coalition member who has business operations split nearly evenly between incumbent and competitive local exchange carrier operations.

In fact their CEO, Jeff Gardner, recently served as the chair of United States Telecom Association (USTelecom), the trade association that advocates for incumbent providers including AT&T and Verizon. He was also thekeynote speaker at the COMPTEL Plus show for the competitive industry this spring.

This deep understanding of both the incumbent business and the competitive marketplace is what makesWindstream’s recent letter to the FCC such a game changer in the debate over the Technology Transition and the IP Transition specifically. After close examination, Windstream called AT&T’s IP experiment proposal for communities in Florida and Alabama, flawed. 

Flawed, as in should be rejected flawed.

Now, Windstream makes it very clear the FCC should speed the transition from TDM technologies to IP technologies – an area where the company has taken a leadership role. They note that carriers like AT&T should not be allowed to invoke the IP transition as a pretext for shedding pro-competition requirements and an excuse to raise prices on business customers.

In urging the FCC to reject AT&T’s trial outright, Windstream notes:

--AT&T has no plan for wholesale customers. Zero.

--The trials as proposed violate the FCC stated core values: competition, public safety, widespread and affordable access and consumer protection.

--AT&T’s plan will lead to fewer providers, less innovation, and lower standards of service for consumers and business customers.

In their letter, Windstream hits on a key point in the debate: last-mile access.

“In the post-IP world, competitors still will need equivalent access to last-mile facilities and services to continue offering business services to millions of customers.”

Windstream recognizes that competitors can’t make a viable business case to replicate last-mile connections, except to serve the very largest customers. This is because of a variety of factors, including high sunk costs of constructing last-mile facilities (i.e., costs, once incurred, cannot be readily recovered), local government regulations that delay and raise costs for new deployments, and building owners’ refusing access to new carriers or seeking to charge competitors extending networks into their buildings.

Rather than working to cut off last-mile access, like AT&T is proposing, Windstream’s letter calls on the FCC to take immediate action to ensure that, at a minimum, the status quo for wholesale access is not undermined by incumbents seeking to invoke the IP transition as a pretext for dramatically raising the costs of the companies that are their biggest rivals in the business service marketplace. Without this reform, businesses, schools/libraries, hospitals, and government entities all will see their communications bills increase – as competitors’ will be forced to increase prices in response to higher last-mile access costs, and competitors’ prices will no longer provide a meaningful check on incumbents’ price hikes.

On Friday, during their June meeting, the FCC is scheduled to receive a presentation updating the commissioners on the IP Transition and AT&T’s IP experiments proposal. As a recent article in TelecomCompetitor suggested, the Broadband Coalition hopes Windstream’s letter, along with concerns raised by Granite Telecommunications, XO Communications, tw telecom, COMPTEL, Sprint and Level 3 (read here and here) caught the eye of the FCC.  

After all, the migration to IP networks is happening in the marketplace. This is a step forward for technology, a step forward for consumers, and a step forward for innovation. The Broadband Coalition members have been at the vanguard of this transition, rolling out IP-based services for over a decade. But as Windstream notes, we can’t afford to “flunk” a test along the way. And AT&T’s trials, absent a viable wholesale plan for last-mile access, threaten to disrupt technology advancements toward an all IP network. 

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