Notebaert: We’re in commodities; deal with it

MIAMI—Faced with ever increasing competition from cable operators and voice over IP carriers, telcos had better start changing the way they think of their business, according to Dick Notebaert, chairman and CEO of Qwest Communications.

Speaking at the National Telecommunications Cooperative Association’s annual meeting here, Notebaert said telcos have traditionally had a technology advantage over potential competitors, but that it’s disappeared.

"We are in a commodity business," he told the gathering of 3000 or so telco executives. "There are a lot of people that don’t want to admit that. Anybody that wants technology can buy it. It’s not a monopoly anymore. Competing on price might be good for a day or two or maybe an hour with some enterprise customers."

The only way for a telco to differentiate itself in the current environment is to provide better service, he added, repeating the Qwest "Spirit of Service" mantra often. At the same time, the industry needs to take advantage of the regulatory environment presented to it. Continuing his challenge to the FCC and courts, Notebaert said Qwest’s test of VoIP service in Minnesota is going very well and it’s looking at expanding the service to all 14 states where it is a local incumbent.

Additionally, the company will continue pushing forward with its CLEC operations, moving into markets at the edge of its ILEC serving territory.

"Predictably, some members of our industry are very negative about our deployments [of VoIP]," he said. "We can fight it. We can demand that it be regulated. We could slow it down but can we stop? I don’t think so. The only regret I have is that it took us this long to embrace it."