Competitors Gearing Up for Changed Washington

Competitors and public-interest groups are planning a broad new coalition, and it may surface in two to four weeks, a CLEC official told us late Wednesday. The official wouldn’t disclose the group’s leader or lineup, but said it aims at a membership beyond CLECs. On the panel Thursday, Salmon again endorsed the concept of a competitive alliance (CD March 5 p3). He noted that former Congressman Chip Pickering “has talked about formally putting together a coalition.”

If a competitive alliance forms, it should include more than phone companies, because industry efforts are sometimes perceived as self-serving, said Kim Bayliss, managing director of Dutko Worldwide. To reduce resistance, a coalition should include customers, consumer groups and organizations like Free Press, she said. “This administration is going to look at what’s in the public interest,” what will create jobs and what will protect consumers, she said.

Competitors should frame their message to reflect current events and new Washington power players, Salmon said. In lobbying House Commerce Chairman Henry Waxman, for example, CLECs should explain how reaching their goals would help the environment and consumers, he said. And efforts to eliminate forbearance on FCC rules should invoke the economic crisis, Salmon said. CompTel has been telling policymakers that investors are “dubious” about putting money into CLECs because forbearance decisions can put them out of business overnight, he said.

Salmon urged CompTel members to come together on how to change intercarrier compensation. Members don’t agree, because their business models differ, he said. Failure to agree could come back to haunt CLECs when the FCC deals with the issue again, Salmon said. “There will be another deliberation” in the “not so distant future,” he said. “Mark my words.”

CLECs should direct lobbying efforts to all parts of government, not just Congress and the FCC, panelists said. More attention should be paid to the White House, the NTIA, the Justice Department, and the Small Business Administration, they said.

The White House seeks to assert itself more on telecom in the Obama administration than under Bush, panelists said. “The White House will play a bigger role over the next 4 years than we've seen over the last 8 years,” Bayliss said. The Bush administration was “completely disengaged and uninterested” in telecom, in stark contrast to the Clinton administration before it, she said. Now some Clinton officials are back in the White House, seeking to revive the old attitude, she said.

Congress wants to work with the new FCC on many issues, and Hill personnel changes favor competitors, speakers said. Chairman Rick Boucher, R-Va., of the House Communications, Internet & Technology Subcommittee, provides a technology focus and is interested in job creation and bringing broadband to underserved areas, Bayliss said. That attitude “plays into the competitive industry’s sweet spot,” she said. Meanwhile, Senate Commerce Chairman Jay Rockefeller, D-W.Va., seems more interested in telecom than his predecessor was, she said. Pickering used to be the most vocal congressman on CLEC issues in the House, but he has moved into private work, Salmon noted. But CLECs have a fine replacement in John Shadegig, R-Texas, whom CompTel President Salmon had suggested join the House subcommittee, he said.

CLECs should also seek to build relationships with states and local governments, whose influence seems to be on the rise, panelists said. Obama picked several governors for his cabinet, demonstrating an interest in teaming with states, Bayliss said. States will be heavily involved in broadband mapping efforts, she noted. Unless CLECs get more involved, they may find incumbents dominating those efforts, she said.

States will be more active than usual on issues important to CLECs, and the FCC will be less active, officials on a second panel said. The new commission’s “plate is very full,” said Lisa Youngers, a vice president of XO Communications. The FCC must deal with two Verizon forbearance petitions but will otherwise have its hands full with the DTV transition and broadband stimulus. The arrival of new commissioners and aides will further slow commission progress on CLEC issues, she said.

The “vacuum at the FCC” has been in part filled by state efforts, said lawyer Gregory Kopta. CLECs must increase participation at the state level, or risk devastating decisions, said Timothy Gates, senior vice president of QSI Consulting. Big incumbents are telling states they need deregulation due to competition from cable and CLECs, but competitors aren’t coming in to give the other side, he said. Meanwhile, many states are considering legislation on intercarrier compensation, a hot topic that the FCC dropped last year, said Michael Brady, Comcast vice president.