CLECs break the cage

The economics of the competitive local exchange carrier business continue to improve as a result of regulatory actions.

Last week, the FCC ruled that incumbent carriers must offer cageless co-location and must allow CLECs to share co-location space with each other. The new requirements could reduce a CLEC's cost of co-locating in a central office by tens of thousands of dollars.

"Co-location delayed is also competition delayed and denied," said FCC Chairman William E. Kennard, adding that the ruling "will go a long way toward eliminating gamesmanship."

The move came just two months after the Supreme Court ruled that incumbent carriers must offer combinations of network elements, a decision that may eliminate or reduce the need for CLECs offering voice services to co-locate. Because digital subscriber line requires equipment at each end of a 15,000-foot loop, however, CLECs focusing on DSL will continue to need co-location.

"The deployment of DSL could explode based upon these new rules," said Cronan O'Connell, vice president of industry affairs for the Association for Local Telecommunications Services.

The FCC also requested comments on whether incumbents should be required to share an individual loop with competitors-a scheme also known as spectrum unbundling (Telephony, Jan. 4, page 26).

CLECs are requesting line sharing because current wholesale pricing schemes put CLECs at a competitive disadvantage, said Dhruv Khanna, vice president and general counsel for data CLEC Covad Communications.

Currently, incumbents charge CLECs $20 to $30 for a loop, to which CLECs must add their own DSL equipment, said Khanna. Meanwhile, incumbents recover all their own loop costs through voice services, enabling them to offer DSL over a voice customer's line for $20 to $30 a month, he said.