This fall's Comptel Fall Plus 2014 trade show centered on how the competitive telecom industry is evolving to meet its customers' needs and what new challenges they will face as industry consolidation and the IP transition continue to ramp.
Right now, there are three pending deals that will shape the competitive telecom industry both for consumers and businesses: AT&T (NYSE: T) and DirecTV (NASDAQ: DTV); Comcast (NASDAQ: CMCSA) and Time Warner Cable (NYSE: TWC); and Level 3 and tw telecom.
At the same time, the Comptel organization is evolving. Led by former Congressman Chip Pickering, who took Comptel's helm in January, a key focus has been to expand the organization's membership.
In Pickering's nine months as Comptel's CEO, the group has added new members from various segments, including not only CLECs like XO, but also a host of incumbent telcos, international operators and even wireless providers such as AT&T, Vodafone and T-Mobile US (NYSE:TMUS).
"What we have communicated throughout the show is the tremendous growth of Comptel as we expand into other parts of communications and technology sectors," said Pickering in an interview with FierceTelecom. "We will have members that are not only in our core and historic membership in enterprise and business where we have leading companies like XO, but we have Birch and many others that have joined over the last nine months."
There were four key trends FierceTelecom identified at Comptel Plus Fall 2014 that we think will have an impact on the competitive telecom industry:
Wheeler's three-pronged competition agenda: Tom Wheeler may be only a year into his job as chairman of the FCC, but during a keynote speech, he outlined three key elements to ensure competition: last-mile network access, copper retirement and VoIP interconnection. Despite the competitive service provider's leadership in moving to all-IP, many still need access to copper and traditional TDM-based circuits for reaching sites outside of their footprint and for wireless backhaul.
VoIP interconnection has come to the forefront as competitive carriers have had to battle incumbents that have required them to terminate IP traffic to TDM. Sprint (NYSE: S) has had troubles with conducting VoIP interconnection with AT&T, while Verizon's move to offer VoIP interconnection agreements that include non-disclosure clauses with other carriers has raised eyebrows. Meanwhile, the Massachusetts Department of Telecommunications and Cable is examining whether it has the authority under Section 252 to regulate the voluntary commercial IP VoIP interconnection agreement between Verizon and its VoIP IP interconnection partner Comcast.
Wheeler said that while he does not want to unnecessarily regulate the market, the FCC will intervene if necessary.
"Technical standards will be like trees falling in the forest if the providers--incumbent and competitive alike--cannot agree, as a business policy matter, to interconnect on competitive terms," Wheeler said. "I will be watching very, very closely, and if industry does not step up, we will step in."
Dark fiber becomes wireless backhaul's new fashion: Dark fiber appears to have come back into fashion, particularly in the wireless backhaul market, where some operators like Verizon Wireless are mandating that they want dark fiber instead of a managed Ethernet-based service.
Wholesale service providers are divided on the dark fiber opportunity.
FairPoint, one of the incumbents on the general session on wireless backhaul, is reluctant to sell such a service because it would potentially enable a competitor to go and offer competitive business services off those fiber links. And while PEG Bandwidth is selling dark fiber, it is doing it reluctantly to thwart potential competitive threats.
Although Verizon Wireless (NYSE: VZ) may be the only wireless operator that's reportedly interested in dark fiber, it's not inconceivable that other operators could ask for it.
Small cell backhaul grows slowly: Small cells may have become the rage in the wireless industry, but just how big it is for backhaul depends on who you ask. A recent Infonetics report revealed that small cell revenues were only $771 million, much smaller than the $24 billion 2G/3G RAN market.
Service providers are seeing interest, but it's not as fast as it was once predicted. FairPoint, which serves a mix of Tier 2 and 3 markets in northern New England, is providing DSL and T-1 circuits to Coverage Co. to fill in coverage gaps with small cells.
"Twelve months ago, I remember sitting at this event in Orlando talking about small cell and expected over the next 18 months to see some interest," said Chris Albering, vice president of product marketing for FairPoint Communications. "I feel like maybe it's taken off a little bit since then, but not at the rate we expected because some of the carriers are still trying to figure out what their small cell strategy is."
Alternatively, PEG Bandwidth said it sees interest in pockets of its footprint.
"We're seeing the opposite," said Greg Ortyl, senior vice president of sales and marketing for PEG Bandwidth. "We're seeing a ton of RFPs and lots of awards, more so than a year ago and late last year [and] we're starting to get called back and evaluated, but it does vary by geography."
Pole attachment, permitting issues: Another issue that competitive providers face in building out networks is dealing with permitting issues, environmental concerns and gaining rights-of-way (ROW) along existing utility poles.
During a panel on the second day of the show called Fiber, Fiber Everywhere: The Intersection of Industry, Government and Policy, a group of competitive service providers gathered to talk about the issues they face with local communities in building fiber networks.
While gaining permits and dealing with "make ready" elements with local utilities and permitting are always going to be a challenge for any provider, all of the panelists agreed that they need to be creative in dealing with each community where they string their fiber facilities.
Comptel Plus Fall 2014 may have not solved all of the competitive telecom industry's problems in one event, but it raised some questions that will provide fodder for future shows.--Sean