CLEC EXECUTIVES TIGHTEN FOCUS ON GENERATING NEW BUSINESS

Given regulatory changes, mega-mergers and continued industry consolidation, it would have been understandable if competitive carriers met in New Orleans for the CompTel/Ascent conference to share in a pity party.

Instead, most of the CLECs and wholesale network operators in attendance were surprisingly upbeat, preferring to focus on new market opportunities and hopes of new financial stability.

“This has been a terrific show for us, and we see tremendous potential out there,” said Jeff Donahue, senior vice president, sales/operations for TelCove, a regional wholesale and retail service provider in the Eastern seaboard and mid-Atlantic region.

Attendance at the show was 2800, up 20% from the previous year's event, and the exhibit floor was sold out, attracting 150 vendors.

“It's been a busy show,” said Kevin Sheehan, CEO of Hatteras Networks, an exhibitor and maker of gear that delivers Ethernet over copper access loops. “We've been very pleased with how many service providers are here and the level of the attendees.”

The recent announcements that SBC Communications was buying AT&T and Verizon would acquire MCI prompted most CLEC executives to generate positive spin.

“Certainly, new opportunities will open up for us because of this,” said Dan Caruso, CEO of ICG, during a CEO panel discussion. “The big guys will get synergies, but they won't be able to execute part of the plan. Smaller, focused players will be able to pick up business as a result.”

But everyone expects consolidation to continue — both in terms of incumbents and competitors.

“We will see more change, but the last five years have taught us to focus on our customers and on what they do,” said Jeff Storey, CEO of WilTel.

VoIP and Ethernet services were popular at the show. BellSouth, Global Crossing and WilTel all introduced expanded Ethernet-based wholesale services with both pricing and feature improvements, while Hatteras Networks announced the first of what it says will be many rural telco customers.

“VoIP is going to be the opportunity for the next bubble,” said Carl Grivner, XO Communications CEO. “There are lots of new companies that are Vonage-like, all sales and marketing organizations with very little infrastructure. And there will be companies like XO that have networks. For us, filling up the gigabits is going to be critical. We have a very good wholesale solution.”

CLEC executives weren't too optimistic, however. Two of the opening panel discussions focused heavily on the need for competitive carriers of all types to get to know their elected representatives in advance of the upcoming rewrite of the Telecom Act, to prevent further erosion of rules that aid CLECs such as the right to buy and resell unbundled loops from incumbents.

“The challenges are in front of us,” said Grivner. “For right now, we have some regulatory certainty, but that's temporary. We can't sit back for too long because the regulatory environment and the legislative environment is going to change again. We have to have a voice in Washington.”

That voice is changing slightly. CompTel/Ascent and Association for Local Telecom Services, both of which represent competitive carriers in Washington, voted to merge as of March 1, and will be known as CompTel/ALTs. Sherman Henderson, CompTel/Ascent chairman, will serve as chairman of CompTel/ALTS. H. Russell Frisby, the CompTel CEO who was planning to step down, will now stay on as CEO until a successor is found.