MCI PLANS TO ATTACK TELRIC RATES AS TOO HIGH
SAN FRANCISCO -- MCI will aggressively counter Bell attacks on lease pricing of its network for voice services, Mid-Atlantic Regional Dir. Carl Giesy told a competitive carriers’ conference here Tues. Incumbents have tried pounding home to state regulators that they have been losing money on TELRIC (total element long-run incremental cost) rates for UNE-P arrangements with competitors, he said at a Competitive Telecom Assn. (CompTel) conference.
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Competitors’ counterarguments that the pricing system is, if anything, too generous, are only strengthened if the FCC’s forthcoming Triennial Review order stands up to challenges, Giesy said. The Commission has indicated Bells won’t be required to share network facilities as they are upgraded to new technologies, he said. But competitors “denied access to forward-looking networks” shouldn’t be charged “based on forward-looking network costs,” he said.
“If they [incumbents] want to recover their actual costs, by God we'll look at their actual costs,” Giesy said, indicating the outcome wouldn’t be as favorable as the Bells hoped. “The [incumbents] want it both ways… They want their actual costs to be recovered, but they don’t want anybody to look at their actual costs.”
It also is untrue that current pricing is killing the Bells financially, speakers said. They're netting $605 million annually, with profit margins of more than 20%, on UNE-P deals, CompTel Pres. Russell Frisby said. “We are not being subsidized,” he said: “The Bells are earning substantial returns on these arrangements.” Talk America Assoc. Gen. Counsel Francie McComb replied: “It’s a little naive to think we will prevail in this FCC on anything important. The states are really on our side on TELRIC.”
MCI will press state regulators to cut competitors’ cost disadvantages to incumbents by reducing nonrecurring and colocation charges and changing methods for gaining access to Bell loops, Giesy said. He said states also must address “huge” operational hurdles to competition involving coordination of number portability, 911, white pages and repair and maintenance reporting and tracking -- most of which are handled manually. Competitors need mechanization of such processes, better order handling and seamless access to customers, Covad External Affairs Vp Catherine Boone said.
State regulators will stand up for mandatory competitive access to incumbent facilities, as Cal. has done under state law with line-sharing for DSL, Boone predicted. “That view will ultimately prevail and we will have access to DSL and the fiber network,” notwithstanding the FCC order, she said.
Competitors must watch for further Bell efforts to sell “broadband parity” in state legislatures and commissions, Boone said, referring to the measures as “broadband charity.” SBC won legislation in Nev. and S.C., but wasn’t very successful overall, being fought off in Conn., Ill., Ind., Mo. and Tex., she said.
Incumbents also can be expected to seek more state legislation like that in Ill., which would have raised UNE-P and loop pricing but was enjoined last week by a federal judge, McComb said. She said a similar move in Wis. was rumored. The very existence of state telecom regulatory bodies has been threatened in states such as Tenn. and must be defended by competitive carriers, McComb said.
At the FCC, “our goal is just ‘leave us alone,'” Boone said. “Let’s take a breather on TELRIC. Let’s take a breather on the broadband” notice of proposed rulemaking, and see how issues play out in the states.