Apples, Oranges and Then There’s Reality

by Tony Thomas
June 14, 2018

The telecommunications industry is not unlike many other industries in the sense that we like to ‘prove’ our position by quoting a study that validates it. The problem is that it’s relatively easy to find someone who will create a position paper or study that will prove just about anything. Big telcos’ proposal before the FCC to increase prices is based on just such a study.  “Assessing the Impact of Forbearance from 251(c)(3) on Consumers, Capital Investment and Jobs” contains some facts, but a lot more fiction that is both disingenuous and misleading about the real impact of their policy position.

One of the biggest deceptions is the study’s ‘apples to oranges’ comparison that equates the rate of customer migration to new technologies to what occurred during the simple voice UNE-P conversions of the past. Comparing simple voice UNE-P to the complexities of converting UNE T1s to next-generation products clearly shows a lack of understanding of the economics of today’s networks and ignores the amount of investment required to deliver the functionality demanded by enterprises in an increasingly cloud-based, digital environment. The study goes on to tout that resulting price increases passed along to customers will lead big telcos who reap the rewards of increased revenues will pour that windfall back into capital investments in the network. More likely is that the windfall will make its way to their bottom line or debt retirement. Both are completely understandable and legitimate motives, but when presenting a case with the end-user impacts inherent in this proposal, Windstream believes we owe it to our customers and industry partners to ensure that our position is supported by facts and a healthy dose of reality. For more on this, click here.