Comptel: CLECs should be better partners, Paetec CEO says

NASHVILLE--Competitive service providers should be buying and selling services more amongst themselves and being better partners, Paetec Chairman and CEO Arunas A. Chesonis told the Comptel crowd today.

“If we can work a little bit better with one another, we’ll all be better off,” Chesonis said in an afternoon keynote speech. “If I can buy from you, I’d rather buy from you.” In the past, Paetec has tried to buy facilities from other CLECs but been rebuffed. “We were begging,” he said. “A lot of people truly believe that if you enable me as a competitor, you were going to lose.”

Even in an era when companies such as his own are building national footprints through acquisition – Paetec acquired US LEC and McLeod Communications – CLECs compete less with each other than with incumbents and should view each other more as potential partners, Chesonis said.

All competitive carriers benefit from a stronger overall industry in part because of public perception, he said. “I hope weaker brothers and sisters don’t go back to the restructuring days,” Chesonis commented.

“We have a collective opportunity to be the honest broker,” Chesonis said. “Our value proposition becomes more compelling during economic downturns.”

One reason for that, Chesonis said, is that CLECs can not only be price competitive but also flexible in helping their customer through tough times. Instead of enforcing a contract on a company that is struggling and laying off workers, it makes more sense to re-negotiate to help the customer and retain their business, he said.

In fact, it was during the last economic downtown that Paetec went free cash flow positive, Chesonis said.

Regulatory “potholes” will always be a part of the CLEC business but they should not be of overwhelming concern. “They don’t keep me up at night,” Chesonis said.

Paetec does continue to consider other acquisitions, but Chesonis said the company had met its primary goal for acquisition, which was to build a national footprint.