Remarks of
SUSAN McADAMS
Vice President – Government & Industry Affairs
New Edge Networks

On behalf of New Edge Networks, I would like to thank Senator Wyden for his foresight and commitment, and the Senator’s staff for their hard work, in convening this important conference on rural infrastructure development in Oregon. I am very pleased to be able to address such an impressive group of public officials, non-profit entities and citizen advocates from Oregon’s smaller communities.

New Edge Networks is proud to be delivering the digital promise to smaller cities and towns across the nation and here in Oregon. Although we are only 6 months old, New Edge was recently ranked the fourth largest national provider of digital subscriber line (DSL) services – and is the only one of the four top providers who is specifically focused on serving outside of large urban areas. DSL utilizes existing copper telephone wires to provide high-speed Internet access and other broadband-enabled telecommunications services.

New Edge delivers DSL on a wholesale basis to the Internet Service Providers (ISPs) and competitive local telephone carriers in your community – who in turn offer DSL’s high-speed Internet access to their end-user customers, including local businesses, residences, telecommuters, distance learners and public agencies. Additionally, we hope to be able to partner with independent telephone companies in very rural areas to facilitate the availability of advanced services in their service territories. And, New Edge is committed to collaborating with local economic development councils to identify local needs and economic demand for DSL services. We believe that our approach of becoming a wholesale partner of the ISPs and telecommunications carriers who serve your locality results in a true local economic development benefit.

In Oregon today, New Edge has already applied for or completed “collocation” of our DSL transmission equipment in US West central offices in: Eugene, Springfield, Salem, Albany, Corvallis, Milwaukie, Ashland, Grants Pass, Medford, Bend and Klamath Falls. After this first round of deployment, we will be looking for opportunities to serve even small communities. Let me assure you that New Edge’s commitment to smaller towns is not empty rhetoric. Today, for example, New Edge serves Sequim and Port Townsend, Washington – towns with populations of about 4,000 and 9,000 people, respectively.

Unfortunately, I must report that US West missed their October due dates to make a number of these collocations available to us. Due to these US West delays, New Edge is still waiting to bring service to Albany, Eugene, Grants Pass, Bend and Ashland.

Our experience over the last 6 months has forced New Edge to the conclusion that the incumbent phone companies across the nation are consciously engaging in tactics of delay, outrageous wholesale pricing, regulatory and legal gamesmanship, strategic incompetence, obfuscation and confusion with the intent of maintaining their monopoly grip over telecommunications in your communities.

The United States has solid, pro-competitive telecommunications policy in place today. Effective implementation and enforcement of that policy is the single most important role for telecommunications regulators. The monopoly phone companies have amply demonstrated that they will not voluntarily embrace the competitive model. Regulators must aggressively keep the incumbents’ “feet to the fire,” demanding that the incumbents meet their legal obligations to open local markets to competition and penalizing them if they do not do so.

In this regard, New Edge commends the Oregon Public Utility Commission for initiating a proceeding to establish carrier-to-carrier quality of service rules. Clearly, for example, it is not good enough for a competitor like New Edge to say to its customers, “We will be able to give you service as soon as US West provides the connections we need from them.” We must be able to give our customers a specific date and time when their service will be ready.

The underlying problem in enabling competition against incumbent telephone companies is that the incentives are wrong. The phone companies have every incentive to impede competitors by refusing to provide adequate, timely and financially viable interconnection services. The real solution is “structural separation” -- requiring each incumbent phone company to split into two separate companies: a retail company that sells services to end user customers, and a wholesale company that owns the lines and wires and sells them to all retail providers on equal terms and conditions. New Edge asks you to join us in urging public policy makers to get the incentives right by ordering full structural separation of incumbent phone companies.

New Edge Networks is committed to breaking through the monopoly barriers erected by the incumbent phone companies. We believe small and mid-sized cities and towns want and need broadband access services like DSL because high-speed Internet access will mean:

• The “World Wide Wait” in using the World Wide Web will be eliminated.

• Small-town businesses can be full participants in today’s information-based global economy.

• Your local work force will have access to distance learning opportunities that can overcome old urban-rural inequalities.

• A bridge will now cross the “digital divide” that threatened to disadvantage rural residents and businesses.