Transcript CLECS: CREATING ECONOMIC DEVELOPMENT IN TEXAS

A LONE STAR SUCCESS STORY
CLECS AND ECONOMIC DEVELOPMENT IN TEXAS
December 3, 2013
TEXALTEL
500 N. Capitol of Texas Hwy, Bldg 8 Suite 250
Austin, Texas 78746
512-320-0430 • www.texaltel.org
CLECs create economic
development in Texas
Competitive local exchange carriers (“CLECs”) create
economic development in Texas by:
• Building networks & data centers in Texas
• Employing thousands of Texans
• Introducing innovative services that keep Texas
businesses competitive
• Fostering competitive pricing
• Making the incumbents adopt innovations
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CLECs and Economic Development
Building networks in Texas
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CLECs are deploying state of the art networks in Texas
• Investing in fiber networks in the Houston, Dallas/Forth Worth, San Antonio, Austin,
Lubbock, Midland/Odessa, Corpus Christi, and Wichita Falls MSAs
• Deploying broadband equipment in central offices in the Houston, Dallas/Fort Worth,
San Antonio, Austin, Lubbock, Midland/Odessa, Corpus Christi, Wichita Falls,
Harlingen, Laredo and McAllen MSAs
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CLECs are building and connecting data centers to support future economic
development from cloud-based businesses
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Texas CLECs are providing wholesale networks that are transitioning the
nation to IP voice through media conversion and are enabling other CLECs to
innovate
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CLECs are offering hosted VoIP with innovative customer features
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CLECs and other competitors use those networks to provide services to over
2.4 million Texas customers
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2013 Scope of Competition Report, p.10
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CLECs and Economic Development
Employing Texans
• CLECs employ thousands of Texans
• Many of TEXALTEL’s members are headquartered in
Texas, including
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Alpheus Communications (Houston)
Bestline Communications (Austin)
Grande Communications (San Marcos)
HyperCube Telecom (Lancaster)
Logix Communications (Houston)
Meriplex Communications (Houston)
Network Communications (Longview)
Tel West Network Services, a subsidiary of U.S. TelePacific
Corporation (Tel West headquartered in Austin)
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CLECs and Economic Development
Outstanding and Critical
Telecom Policy Issues
• The network is in transition. IP Interconnection brings the telecommunications network
into the 21st Century.
• Continued access to copper keeps costs low and provides a bridge. It will be decades before
copper is phased out, if ever. Access to existing copper allows CLEC to make full and
efficient use of the old technology.
• Cost-based Special Access rates when other competitive wholesale options are unavailable
and when UNEs are unavailable for last mile facilities in unimpaired offices and it is
uneconomic for them to construct facilities of their own
It is important to remember, however, that competition does not and will not produce adequate
outcomes in the circumstance of significant, persisting market power or of significant negative
externalities. Where those occur, the Communications Act and the interests of our society – the public
interest – compel us to act and we will. - Chairman Wheeler*
*Remarks of FCC Chairman Tom Wheeler at the Ohio State University, December 2, 2013 Pg. 4 ; http://www.fcc.gov/document/remarks-fcc-chairman-tom-wheeler-ohio-state-university
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CLECs and Economic Development
CURRENT SITUATION
Circuit switched connection
using 30 year old SS7 protocol
(1970’s network)
AT&T’s 21st century
IP network
CLEC’s 21st century
IP network
Unnecessary IP to SS7 converters
OPTIMAL SITUATION
AT&T’s 21st century
IP network
Simple hand-off using basic routers,
always using the IP protocol
CLEC’s 21st century
IP network
CLECs are the Innovative
Leaders
• History shows that CLECs and other competitors force the
incumbents to embrace innovative products, benefiting
customers in Texas
• Affordable long-distance services
• Before MCI, Sprint, and other long distance competitors, AT&T
charged over 50 cents a minute for long distance calls
• See http://www.youtube.com/watch?v=e601moNCA7Q
• Now, long distance calls are essentially free
• DSL
• ILECs had the technology back in 1988, but did not offer it as a
retail service until the late 1990s in response to CLECs like Covad
• Ethernet over Copper
• CLECs deployed the services first, the ILECs followed
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CLECs and Economic Development
EoC – A Current Example of
CLEC Innovation
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CLECs are introducing next-generation broadband and
communications services leveraging the existing copper infrastructure
• CLECs offer Ethernet over Copper (“EoC”) in the Dallas/Forth Worth,
Houston, San Antonio, Austin, Corpus Christi, McAllen, Harlingen and
Laredo MSAs
• EoC provides customers with between 1.5 and 40 Mbps of guaranteed
bandwidth, ideal for video, VOIP, and other mission-critical applications
• Average price of $310 for 10 Mbps EoC, compared to $295 for T1 (1.54 Mbps) or
$1950 for DS-3 (45 Mpbs) (source: www.shopforethernet.com)
• EoC is available to the nearly two-thirds of customers that do not have
access to fiber
• Nationally, 63.9% of commercial buildings do not have access to fiber (Vertical
Systems, 2013)
• EoC ensures that Texas businesses will be properly served from a
broadband perspective as bandwidth utilization increases
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CLECs and Economic Development
EoC by the numbers
• An analysis of six Texas CLECs reveals:
• CLECs provide EoC service in over 130 wire centers in
Texas
• Approximately 50% of those wire centers have more
than one competitive option for broadband over EoC
• Thanks to CLEC innovation, up to 400,000 businesses
in Texas wire centers have a competitive option for
broadband service with guaranteed bandwidth
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CLECs and Economic Development
Geographic scope of CLECs’
EoC services in Texas
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CLECs and Economic Development
Geographic scope of CLECs’
EoC services in Texas -Detail
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CLECs and Economic Development
Geographic scope of CLECs’
EoC services in Texas -Detail
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CLECs and Economic Development
Conclusion
CLECs: a key piece of the economic
development puzzle for Texas
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State of the art networks
Employment for thousands of Texans
Innovative services
Fostering innovation from the rest of the industry
A Lone Star Success Story
But, CLECs need access to the copper infrastructure and IPbased interconnection and cost-based special access rates to
bring next-generation broadband and voice services to Texas
customers
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CLECs and Economic Development