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CLECs See No Future in Residential Service

CLECs will focus on business services, now that the FCC has decided that broadband deployment will speed up if the cable and phone companies are handed a duopoly.

[August 19, 2005]

On the ISP-CLEC list in August, after a long discussion about the current regulatory climate (see ), EL asked:

So, is it the opinion of the participants in this facilities discussion that the facilities based CLEC will still be in a decent position to get and keep business in a REBOC/ILEC, FCC defined competitive market place but have to pay more for interconnection products and getting to the customer premises?

[MR argued] "I certainly think so. Sure, we're having to pay more. Sure, it's harder than it used to be. But we're doing well. Now, I agree that this FiOS thing is troubling and anti-competitive. I think there should be a regulatory prohibition against removing copper plant simply because the ILEC is offering fibre service to a customer. We'll see if that flies though. I think the best thing we can do on this issue is to get some press. Make the public aware that a choice of FiOS today means no choices later, ever. How many of them will agree to 'try' FiOS then?"

[VV grumbled] "There'll be ads all over radio and TV telling them how wonderful it is and how they can 'surf' even faster and to take this really low introductory pricing and they'll follow that pied piper wherever he leads them."

[EL replied] "So the CLEC (over time) must look at a shrinking market share? Or the CLEC must install its own fiber services. Would that be a correct statement? Then given (assuming the FCC rules do not get any better) a shrinking business/enterprise market, where is the CLEC in five years?"

[MR suggested] "I would say that it puts us right back where we started, with the business model that the regulators complained loudly about. It means we can only serve the highly profitable commercial subscribers, who likely are in a multi-tenant building that is still on-net. I don't see Verizon being able to take multi-tenant structures off-net for any reason. We could still survive doing that, but it leaves those poor residential subscribers left with no options, which was (I thought) the big contention with the regulators. We'll see what shakes out, but I suspect that if that begins to occur, rule changes would be in the offing. Especially after the white house changes hands again."

MP pointed to an article in the Washington Post, suggesting that some people might be beginning to realize what is going on:

Broadband Is Too Important to Be Left to Cable-Phone Duopoly

— End