Quick Jump Menu to this Month’s Articles It Really Is a Wonderful Life FRED Video Debuts in Traverse City, Michigan CLEC or Bust USTA Telecom ’03 – Just Do It Psst! You Can See the White of Their Eyes
by Ken Pyle
July, 2003 Issue
Actually, this OPASTCO session was called, CLEC Alchemy: CLECS in the Lead for Rural ILECs. The message from this session is that independent telcos have to proactively face competition. With the growth of wireless and IP technologies, some of the territories that were “natural” monopolies due to the high-cost of providing service may not be any longer.
David Irwin, Managing Partner of Irwin, Campbell & Tannenwald moderated and brought a regulatory perspective this session. He had some interesting commentary, especially regarding VOIP [Voice Over IP] services (no Universal Service Fund support, but they also don’t have access charges) and that technology is tending to bypass regulation and law. This was especially interesting to me, as it was somewhat a preview of what Irwin will be discussing at the Independent Telco Video Content Conference in Las Vegas.
David Lewis of TCA argued that becoming a CLEC is a good way for a telco to transform itself into a marketing-driven company and be proactive about the inevitable onslaught of competition. He provided an overview of the methodology they use to help clients decide whether and how to offer triple play services. Lewis’ key message is that there is no boilerplate answer to this question. TCA advocates an edge-out strategy that basically grows CLEC operations such that the CLEC markets are roughly contiguous with an independent telco’s incumbent exchange area. With this approach, the telco can leverage their tangible (e.g., central office) and intangible assets (e.g., name recognition).
A look into the future was provided by Ashim Roy of ComBasis Technology. Roy described ComBasis as “consultant of consultants”, which provides leading edge technology solutions to their telecom and networking clients. He argued that, “voice revenue will go away…[Telcos will] need a new business model.” He pointed to the growth of VOIP and his own positive experience with the Vonage VOIP service as proof points that the traditional circuit switched business will become even more difficult. He believes it is critical for telecom providers to align their businesses, such that they can leverage VOIP and WLAN [Wireless Local Area Network] technologies.
The service provider perspective was given by Randall Lowe, President/General Manager, of Tri-County/TCT West. Tri-County is a Wyoming independent telco cooperative, while TCT West is their CLEC subsidiary that was formed to serve customers outside their existing exchange area. They have less than one thousand cooperative members, but thousands of CLEC customers in their 4,500 square miles service area. They receive calls almost daily from people beyond their exchange areas asking them for service.
Lowe said one of the reasons for their success is that they realized that, “dialtone companies cannot survive”. He said TCT has embraced technology so as to position them for the future. He also pointed out that, “content is king”. Their focus is on the customer and they provide local programming, sometimes even producing it themselves in their own studio. They have been very aggressive regarding bundling and his customers like that aspect. Touching upon a point made earlier in the session by David Lewis, Lowe said that their phone service is “free” to subscribers of DSL.
Please TCT, expand to San Jose…….
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