New Comptel chairman wants access to copper--or whatever replaces it

The newly selected chairman of Comptel, the competitive carrier association, is Dale Schmick who is also chief strategy officer for competitive carrier YourTel America. In an interview with Connected Planet this week, Schmick discussed special access, network unbundling and concerns about the proposed AT&T/ T-Mobile merger.

Connected Planet: Tell me about Comptel’s membership today. I know you’re all competitive carriers but are there some important sub-categories?

Schmick: As a competitive industry, membership changes over time. Our range is broad. We have a huge wireless company like Sprint that’s a member and we have companies like Pac-West and [smaller] companies. Everyone has different business models. A lot are facilities-based. Some are using [unbundled network elements] and some are moving into the wireless world. The common bond is that we’re all [competitive carriers].

Connected Planet: Do you have ISPs and VoIP providers and broadband wireless companies?

Schmick: Many companies have some ISP elements. We do have VoIP providers and broadband wireless companies. And a lot of guys are doing cloud stuff.

Connected Planet: Historically most competitive providers specialized in the business market. Is that still true for most of your members?

Schmick: The bulk are B2B . . . The regulatory environment hasn’t been favorable to a residential model. The residential marketplace is really increasingly LECs and cable companies. If you look at access to copper and the disappearance of copper, it’s difficult to have a residential play because copper costs continue to rise.

Merger concerns
Connected Planet: What are the biggest challenges for competitive carriers today?

Schmick: A lot are on the regulatory front. There are a lot of concerns with the existing wireline network, where copper is not being maintained or is removed. There’s a need for competitive carriers to have access to whatever is replacing that.

Special access is another big issue. Broadband is the wave of the future and without special access, there are a lot of challenges to deliver broadband. Some people are also concerned about pole attachment and rights of way. We want to do whatever we can to spur investment. There is also a lot of concern about an AT&T and T-Mobile merger.

Connected Planet: What are your concerns about AT&T and T-Mobile?
Schmick: Speaking very broadly, most people are concerned that we will have consolidation in the wireless industry like we have in the wireline industry.

If you go back to the history of wireless, [initially] there were two companies. Prices were high and choices were limited. Then the industry opened up to more competitors.

It seems like we’re going backwards like we have done on wireline networks.

Connected Planet: What do you see as the best ways to address the challenges that you mentioned?

Schmick: We have to continue as an industry to air our case. Ultimately it will come down for the regulators to follow through. The Broadband Plan starts to address these issues.

Special access
Connected Planet: Let’s talk about special access. Tell me about how your members use special access circuits, what problems they have there and what you would like to see done about it.

Schmick: A lot of our members [have customers that are] banks, hospitals and in health care. To serve them you have to get from your network to that building and you have to get that as a special access circuit. [Often] that’s all that’s available. But there is no management of that pricing. Your competitor can dictate that cost.

The FCC will have to address this at some point or it’s never going to get fixed. They’ve been looking at it for seven years. They have all kinds of data. It’s time to make the rules.

Connected Planet: What might the rules look like?

Schmick: Contract terms are a big concern. Today sometimes you have to give so much business to the incumbent to get the best price. And you can’t give business to other CLECs and those types of things.

Connected Planet: Does Comptel have a stand on Net Neutrality?

Schmick: We haven’t chimed in on that one. Isn’t it amazing how much attention that has gotten? I think everyone would agree we have to be able to manage our networks and we shouldn’t discriminate. Once you get past that, personally I get lost in the whole thing.

Network unbundling
Connected Planet: Some of your members rely at least in part on facilities leased or unbundled from the incumbents. Does that process run pretty smoothly these days? Are the prices you get reasonable? Or is there anything you’d like to see different there?

Schmick: The process hasn’t worked that well for a long time. At the end of the day you have a negotiation imbalance. The market has to be run fairly for there to be robust competition. The regulators will have to make something happen if they want investment and job growth.

Connected Planet: If you talk to the incumbents, they say the same thing. They say if they have to unbundle their networks at prices that are too low, they will have no incentive to invest and create jobs. What do you say to that argument?

Schmick: The proof is in the pudding. How many jobs are in that sector compared to how many years ago?

Connected Planet: What are Comptel’s other key policy concerns?

Schmick: 271 is something we talk about. That’s the [pricing methodology for unbundled elements.] 251 was TELRIC, [which was rejected.] TELRIC was supposed to be based on a reasonably efficient network.

271 is “just and reasonable” pricing and is the next phase. But nothing has been codified. States have said A, B, C and D and it’s now sitting at the FCC for some action. It was determined that this was really an FCC issue and the FCC needs to decide if it will delegate. They need to decide whose football it is.

Connected Planet: What are your own goals that you hope to achieve while you’re chairman of Comptel?

Schmick: The organization has been around for 30 years and has accomplished a great deal in 30 years. You have an organization that on one hand does a lot of industry education and on the other hand is a big regulatory advocacy arm.

My primary goal and mindset coming into this was to make sure those two parts were moving forward. I want to be able to expand and bring in more membership and keep pushing forward the advocacy that’s so important to this business.