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CLECs call on FCC to Impose Conditions on Telecom Mega MergersBy TED GLANZER
TMCnet Communications and Broadband Columnist
Eight CLECs on Thursday submitted to the Federal Communications Commission a set of proposed conditions on the multibillion dollar SBC/AT&T and Verizon/MCI mergers, XO Communications and Eschelon Telecom announced in a prepared statement.
The conditions, according to the statement, are designed to protect business customers from further consolidation of the telecom market. "There is no palliative for a regulatory decision that eliminates the two largest competitors from the marketplace," said Doug Kinkoph, XO Communications vice president of regulatory affairs. "However, we can control the damage of these mergers by looking at comprehensive remedies that strive to re-create the economic environment of today's marketplace."
The proposed remedies, which are endorsed by Broadview Networks, BridgeCom, Conversent, Eschelon Telecom, NuVox Communications, TDS Metrocom, Xspedius Communications and XO Communications, include the following:
• Ensure that local wholesale circuit prices remain at pre-merger rates, including the same terms and conditions.
• Prohibit the delisting of unbundled network elements (UNEs) and freeze UNE rates for five years.
• Provide AT&T and MCI customers the ability to cancel current agreements.
XO Communications said in a company statement that the conditions are imperative in light of a 2004 report authored The Yankee Group, which found that AT&T and MCI account for 20 percent of the wholesale metro private line market.
"Throughout the review of these proposed mergers, the applicants have denied the truth about AT&T's and MCI's importance in the wholesale market," said Heather Gold, senior vice president of government relations at XO Communications. "The Yankee Group data proves beyond any doubt that AT&T and MCI are the biggest competitors to the Bells. If the FCC permits the largest incumbent local exchange carriers – SBC and Verizon – to merge with their largest competitors in the local wholesale market, customers will suffer dramatically."
Ordering market divestitures won't completely address the problem, said Russ Merbeth, federal counsel of Eschelon.
"The competitive local presence of AT&T and MCI comprises much more than their local network assets and customers, and divestiture would not address the loss of those critical resources and capabilities," said Merbeth.
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Ted Glanzer is assistant editor for TMCnet. For more articles by Ted Glanzer, please visit:
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