CompTel challenges unbundling assumptions

By requiring incumbent local exchange carriers to offer cost-based pricing on only individual unbundled network elements and not on a complete unbundled network element platform, regulators have sent a message to competitive local exchange carriers: To get the most favorable cost structure, CLECs must build their own networks.

But CompTel, the organization that represents many long-distance resellers, hopes to persuade regulators that there is a way CLECs can combine individual unbundled network elements-and obtain cost-based pricing-without building their own infrastructure to tie those elements together.

In a proposal issued in November 1998, CompTel advocates letting CLECs have access to the incumbent carrier's recent change system. That system interfaces with the incumbent's switch, enabling the incumbent to reassign phone lines and make other administrative changes.

When it comes to separating and recombining unbundled network elements, "the real issue is loops and switching," said Bob Falcone, an independent telecom consultant who worked with CompTel in developing the proposal. "The incumbent can't remove transport without impacting its own customers, but the loop can easily be separated from the switch," he said. The electronic means of separating the loop from the switch is called "recent change," he said.

Incumbents often allow large Centrex customers to do recent changes on their own lines, said Falcone, arguing that CLECs should have the same capability.

If the incumbent were to extend that capability to CLECs, however, the carriers involved would likely want some type of firewall to prevent one another from making unauthorized changes-and developing that firewall capability would require an investment.

But Texas regulators recently decided that was the price SBC Communications would have to pay. New York regulators are considering a similar requirement for Bell Atlantic, said Falcone.

Incumbent carrier representatives had harsh words for the CompTel proposal.

"It's the biggest sham that's ever existed," said Sue Mason, executive director of public policy for U S West. "It's simply suspending service and re-initiating it. I continue to be surprised by what the FCC and state commissions will buy."

But Falcone argues that if incumbent carriers prevail, local competition will not materialize in suburban and rural areas because competitors will not be able to justify the infrastructure investment. "No one has deep enough pockets to build it and hope they will come," said Falcone.

Recognizing this problem, some state commissions have required incumbents to offer extended loops, minimizing the number of central offices in which a CLEC must collocate (Telephony, Jan. 4, page 16). The extended loop is a great concept, but still requires a CLEC to have its own switches, said Falcone.

"If there will be robust competition, the unbundled network element platform is an absolute necessity," said Falcone.

Some states are requiring incumbents to recombine unbundled network elements for competitors at cost-based pricing for a limited period. If the recent change proposal were to gain acceptance, Falcone argues, CLECs might be able to recombine elements on their own without that time limitation.

Access to the recent change system also would enable CLECs to market different packages of switch-dependent services that the incumbent might not offer its own customers, said Falcone. For example, the CLEC would be able to offer call waiting as an individual item, even if the incumbent offers it only as part of a package that also includes three-way calling and call forwarding.

U S WEST SEEKS DATA RELIEF U S West and the state of Nebraska have asked the FCC to exempt the carrier from interLATA data restrictions within Nebraska. This will facilitate high-speed applications such as videoconferencing and distance learning in small towns and Indian reservations, the parties argue in a joint filing.

NESS COURTS EUROPEAN REGULATORS Addressing the European Institute on Jan. 12, FCC Commissioner Susan Ness invited the European Union to participate in the FCC's upcoming en banc hearing about radio spectrum policies. As communications systems become increasingly global, she said, carriers must obtain licenses in multiple countries.