CLECs Fight ILECs for Access

Competitive carriers demand entry to buildings

If youre seeing fewer choices in competitive telecommunications offerings these days, it may not be solely because of the industrys financial turmoil; in some cases, competitive carriers—rivals to incumbent telephone companies—cant get into your office building to make an offer.

Ever since the Telecommunications Act of 1996 held out the promise of multiple, local service providers competing vigorously to fill phone and data needs, CLECs (competitive local exchange carriers) have been pushing state and federal regulators to force open the doors of multitenant buildings.

In the one state where they fully succeeded—Massachusetts—the mandated access rules were overturned in court last month, sending the CLECs back into the cold.

The Massachusetts Department of Telecommunications and Energy, which had established the rules that the court rejected, was joined by a coalition of CLECs called the Smart Building Policy Project. The DTE is considering an appeal to the July 27 court ruling and will likely make a decision within a couple of weeks, according to a spokesman. Alternatively, the department may wait to see if the Federal Communications Commission issues similar rules, the spokesman said.

The FCC cited the DTEs regulations last fall in a more circumspect federal order on building access and an accompanying proposal on further building access rules.

However, the real estate industry cited the recent state-level court decision as a reason for the FCC to resist further regulatory action.

"The FCC was pointing [the DTE regulations] out as a model for other states to potentially follow," said Gerry Lederer, a lawyer with the Washington law firm of Miller & Van Eaton PLLC, which represents the real estate industrys building access forum, known as the Real Access Alliance. "The bottom line for the SBPP was to tell the commission that they do have the authority to regulate building owners."

In the meantime, the SBPP is considering whether to appeal the Massachusetts court order.

"We think this remains a very serious competitive issue that there is no parity between competitors and incumbents," said Andrew Kreig, president of Wireless Communications Association International, an SBPP member.

The CLEC cause has lost some firepower lately as its most vocal members, including Teligent Inc. and Winstar Communications, struggle for survival. However, there remain powerful carriers—notably AT&T Corp.—keeping the issue in front of regulators.

In a letter to the FCC last week, AT&T asked the commission to require ILECs (incumbent local exchange carriers) to disclose the rates and terms of their building access arrangements to competing carriers—something the real estate industry said would be ineffectual.

"In the majority of cases, I think youll find that there are no terms," Lederer said. "The average office building in the United States is about 29 years old. It was built 20 years before a CLEC even existed."

Some enterprises have grown weary of trying to work with CLECs. In some cases, after trying CLEC services only to have them shut off, users prefer to return to doing business with the long-entrenched telco.

Fastenal Co., in Winona, Minn., used DSL (digital subscriber line) services provided by NorthPoint Communications Inc. and Rhythms NetConnections Inc.—two of the higher-profile CLEC failures—and is now trying to set up ILEC DSL service in as many of its sites as possible.

"My personal opinion is that the ILECs will be the ones that prevail through this. That handwriting is on the wall," said Derek Breiland, communications services manager at Fastenal. "Im OK with the ILEC thing. ILECs have been providing dial-tone service forever."

CLEC advocates said many customers are seeking more competitive offerings in buildings where the CLEC cannot gain access, but those customers generally are reluctant to speak unfavorably of their landlords policies.

"We hear about the end users, but the end users do not want to be identified, and increasingly they dont want to name their landlord," Kreig said. "End users and carriers are in a very difficult position where it is to their individual, short-term harm to be very vocal."

Many industry observers point to the recent spate of CLEC bankruptcies as evidence that the marketplace could not support all the new entrants, but CLEC advocates pointed to the same shakeout as evidence of a need for greater building access rights.

"If competitive telecommunications were to fail as an experiment, building access would stand as one of the causes," said Charles Rohe, a lawyer at the Washington law firm of Swidler, Berlin, Shereff and Friedman, representing several CLECs.

The dueling constituencies have also brought the battle to Capitol Hill, where last year several bills favoring the CLECs interests were introduced. But as the industrys highest-profile carriers, Teligent and Winstar, cut staff and costs, there has been much less activity in Congress this session. However, both sides remain acutely aware of the others efforts.

According to sources, an amendment regarding mandatory building access was drafted for inclusion in the highly publicized broadband deployment legislation known as the Tauzin-Dingell bill.

While competitive carriers were able to secure support for crafting the provision, they were unable to find a lawmaker willing to carry it through revisions of the legislation, the sources said.