Battle Rages Over Carrier Restrictions

By Caron Carlson  |  Posted 2001-05-07

From the convention floors of Las Vegas to the halls of Capitol Hill, a downturn in the fortunes of carriers is blunting customer enthusiasm for all but the most Spartan offerings and raising regulatory cries of unfair competition in telecommunications.

The result will be evident at this weeks NetWorld+Interop show in Las Vegas, where vendors will offer products that have been narrowed to appeal to users anxious not for big build-outs but for bottom-line boosting.

The dour mood at the show is being mirrored in Washington as lawmakers mull ways to level the telecommunications playing field in a changing economy.

What a difference a year makes.

"The major issues at N+I are going to be around infrastructure management," said John McConnell, president of McConnell Associates, of Boulder, Colo., and N+I chairman for educational programs. "Enterprises are asking, Do we just buy more bandwidth from the carrier, or do we want to invest in a product that allows us to use what we have more efficiently?"

Last week, the Senate Judiciary Committees antitrust subcommittee opened hearings to counteract a proposal in the House that would loosen incumbent carrier restrictions.

"[There are] many reasons for concern" about competition, Sen. Mike DeWine, R-Ohio, and subcommittee chairman, said. "Its fair to say that most residential phone customers continue to have [only] one choice for local service." DeWine and others responsible for regulating business competition now admit that the Telecommunications Act of 1996 has not lived up to its promise of demonopolizing the local telephone market.

Outside the Beltway, the admission does not appear particularly bold; some of the largest CLECs (Competitive Local Exchange Carriers) have gone bankrupt. Most of the major network equipment makers are struggling as demand from those CLECs dwindles. But in Congress, where few like to admit a bad gamble, the senators message last week contrasted sharply with the sole telecom initiative currently being touted in the House.

That effort, crafted by the two most powerful telecom lawmakers, Reps. Billy Tauzin, R-La., and John Dingell, D-Mich., would allow the Regional Bell Operating Companies to provide long-distance data services and Internet backbone services without first meeting Federal Communications Commission mandates for competition. It would also relieve the Bells of some duties to lease "last mile" connections to rivals.

Straddling the two opposing efforts, former FCC Chairman Reed Hundt, who oversaw the initial implementation of the 1996 act, cautioned against eliminating regulatory incentives for Bells to open their markets. Hundt, a senior adviser at McKinsey & Co., in New York, recommended last week that lawmakers continue to adhere to the policies of the 1996 act and bolster enforcement.

As lawmakers continue to debate the issues, the ill effects of the Bells domination of the local loop—along with a withering economy—are trickling down to users.

"Our investment priorities right now are to keep things basically status quo," said Don Barry, network architect at Comau Pico, of Southfield, Mich., an assembly line parts maker for the automotive industry. "Were looking at bandwidth usage because right now things are tight. Our budgets been cut dramatically, and we can only spend money if its mission critical."

That attitude of stoic pragmatism will prevail among users and vendors at N+I. "A lot of enterprises are sitting on their hands waiting for new IP services to come up to speed," said Kit Waugh, vice president of business development at NetReality Inc., of San Clemente, Calif. "We can get them the maximum return out of their existing infrastructure."

A couple of months ago, NetReality had big plans to hand out Sony PlayStation video games to visitors stopping by its booth at N+I. But with few users in the mood for fun and games, the switch vendor has ditched the PlayStation games, opting to hand out cash.

In other N+I news, Entuity will broaden the scope of its network performance monitoring tool to provide server and application monitoring. The New York companys Eye of the Storm tool will add the ability to automatically discover applications and servers, in addition to network elements such as routers.

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