Closing the digital divide: CEO summit on rural markets answers few questions

Some of the biggest and smallest names in the telecommunications business met in Washington last week with senators and regulators to swap ideas on the best ways to extend advanced services to rural areas.

"There's no one-size-fits-all solution. There's no silver bullet," said FCC Chairman William Kennard, who moderated the CEO Summit on Rural Telecommunications before a standing-room-only crowd at the Capitol.

The 17 corporate chiefs attending described how they provide high-speed Internet access and other services to rural Americans through cable telephony, DSL and wireless technologies.

Speaking at the summit were AT&T's C. Michael Armstrong, MCI WorldCom's Bernard Ebbers, Bell Atlantic's Ivan Seidenberg, U S West's Solomon Trujillo and a host of lesser-known executives.

Convened by Senate Minority Leader Thomas A. Daschle, D-S.D., the summit seemed to raise more questions than it answered. Participants debated wireline vs. wireless solutions, the pros and cons of various technologies and whether big or small carriers are better equipped to serve the needs of low-density areas.

"If we don't do this right, we'll have a nation of haves and have-nots," said Sen. Byron L. Dorgan, D-N.D.

Before a captive audience of several senators and FCC commissioners Kennard, Susan Ness and Gloria Tristani, the CEOs also dished up their dislike of current telecom policy and regulation.

Trujillo said that the Bell companies' inability to sell long-distance service quashes the incentive and revenue they need to build costly high-speed networks serving rural areas and instead pushes carriers only to service large markets. "It is about economics," he said.

The result, Trujillo said, is the exact opposite of the intent of the Telecom Act of 1996.

Seidenberg used the occasion to not only to call for a more even regulatory playing field, but also to announce that Bell Atlantic would be applying to the FCC for long distance relief in New York within a matter of days.

Several other CEOs said that despite their carriers' small size, they are building fiber optic networks and other infrastructure to bring the Internet to rural customers. A strong universal service fund, of which many parts remain up in the air, is key to keeping those investments going, they said.

CEOs from large and small companies, however, disagreed on who should pay for DSL access multiplexers (DSLAMs) and other equipment used to condition copper lines for high-speed service. Seidenberg said that forcing Bell companies to share data and voice unbundled network elements with rivals discourages the very investment that regulators want companies to make and amounts to an indirect government subsidy of competitors.

But Susan Ashdown, CEO of XMission, a small, Utah-based ISP, said that she and other ISPs depend heavily on telcos for the capacity that makes their services viable. "We face enormous difficulties in connecting to DSLAMs," she said.

The FCC this week is expected to reissue a list of unbundled network elements that incumbent carriers must provide to their competitors. Competitive carriers have sought - and incumbent telcos have fought - the widest list possible, including data elements.