THE LAST LAUGH

The sound of Royce Holland laughing is one of the most authentic expressions of enjoyment you'll ever hear. It's one of those lung-wrenching guffaws that seem to take all the air out of his chest so that he can't say another word. (OK, it doesn't sound pleasant, but trust us.)

Over the last 10 years, we've heard that laugh many times, most often as Holland, CEO of Allegiance Telecom, was laughing at his own jokes, made at the expense of the Bell companies and their backward, anti-competitive ways. Holland probably hasn't been laughing so much lately, with Allegiance just reporting its fourth straight quarterly revenue decline. But Holland's story isn't one of comeuppance. Companies such as Allegiance were founded a few years back on new business opportunities and new principles for competition that have failed to live up to expectations.

CLECs have gained only a modest piece of the wireline market. Now, CLECs are no longer the next big thing in competition. The wireline business has been yielding access lines and customers to wireless recently and is about to yield a whole lot more of them. Now, LECs and CLECs alike that don't offer wireless service are set to become an endangered species. Though the type of business and enterprise customers Allegiance caters to might not be the first to convert, wireless carriers will soon target them, too. The future is clear: CLECs have been usurped as the would-be usurpers of the RBOCs, and someone other than Holland may have the last laugh.