Copyright 2001 Federal News Service, Inc. Federal News Service
April 25, 2001, Wednesday
SECTION: PREPARED TESTIMONY
LENGTH: 1572 words
HEADLINE:
PREPARED TESTIMONY OF JOSEPH GREGORI CHIEF EXECUTIVE OFFICER INFOHIGHWAY
COMMUNICATIONS CORPORATION
BEFORE THE
HOUSE COMMITTEE ON COMMERCE
SUBJECT -
INTERNET FREEDOM AND BROADBAND DEPLOYMENT ACT OF 2001
BODY: Mr. Chairman and Committee
Members, my name is Joseph Gregori and I am chief executive officer of
InfoHighway Communications Corporation. InfoHighway is also a member of the
Association of Communications Enterprises, better known as ASCENT, which
represents entrepreneurial communications firms. I appreciate the opportunity to
offer my comments, on behalf of my company as well as ASCENT, on the Internet
Freedom and Broadband Deployment Act of 2001.
InfoHighway Communications Corporation is a leading Integrated
Communications Provider serving the small to medium-sized business market in New
York, New Jersey, Pennsylvania, Massachusetts, Maryland, Washington, D.C., and
Texas. The company offers a fully bundled package of services, including voice,
data, and Internet offerings. We provide these services -appropriately enough
considering the subject for today's hearing -- through a combination of the
three entry strategies established by the 1996 Telecommunications Act: our own
facilities, resale and unbundled network elements. Additionally, InfoHighway is
building an advanced data network, deploying DSL technology through both a
building-based and central office collocation strategy. To date, we have
deployed DSL technology in approximately 100 buildings and have collocated in 10
ILEC central offices.
InfoHighway, which through its
subsidiaries has been operating for over five years, has over 150 employees
serving customers in 11 markets. In September of 2000 we received a $150 million
equity commitment, of which $45 million was initially invested in our first
stage of growth and network deployment. Our Network plan calls for us to provide
DSL in conjunction with the UNE-Platform/1 in its initial stages, and then
converging services utilizing Voice-over-DSL and Voice-over-IP as these
technologies mature and are commercially accepted.
InfoHighway serves over 6,000 customers with more than 20,000 access
lines. We are adding over 2,000 new access lines per month. Our target market is
small to medium-size businesses, a vastly under served audience that, in the
past, has not had access to a broad range of services and service providers.
Indeed, an important reason that customers do business with us is that we
address their specific needs through innovative products and responsive service.
Whether it's our high-speed DSL services, local and long distance voice
offerings, custom features such as enhanced voice mail that can be accessed from
a PC, or conference calling services, our products and services are designed to
help small and mid-size firms.
I applaud the efforts
made by this panel to ensure that all Americans are given access to the current
benefits and future potential of the Internet. Certainly, InfoHighway and other
members of the competitive community want broadband services deployed as quickly
as is possible. You could almost say that the success of my company depends on
it. It is critical to note, in fact, that InfoHighway and other such
entrepreneurial firms have been on the forefront of advancing technological
change at a rate never before seen. Collectively we have raised billions of
dollars in capital to invest in the necessary infrastructure for these new and
exciting services. And, on a daily basis, are offering these services to
thousands of new customers. This investment in and deployment of advanced
services by InfoHighway and other competitive carriers simply would not have
happened without passage of the 1996 Telecommunications Act. Unfortunately,
these significant advances are often overshadowed by the constant criticism
leveled at the Act by the Regional Bell Operating Companies and their allies.
While I understand the intent behind the Internet Freedom
and Broadband Deployment Act of 2001, I do not believe it
would promote either Internet freedom or broadband deployment.
Indeed, the only beneficiaries of the legislation's "freedom" would be the
remaining Regional Bell Operating Companies, because they would be freed of
their statutory obligation, set forth in the 1996 Act, of opening their local
markets to competition. Conversely, the legislation provides anything but
"freedom" for InfoHighway and other competitive service providers, as well as
consumers. In fact, the bill would deny us the freedom to compete for consumers,
as promised by the 1996 Act, and consumers the freedom of choice in service
providers.
The legislation, if enacted, would do
tremendous harm to InfoHighway and our customers. It would seriously impair the
ability of our company to effectively execute its business plan, secure
additional funding and deliver new services to end users. By giving the RBOCs
the ability to transmit data on an interLata basis, the bill would substantially
reduce the incentive for the RBOC's to open their networks to competitors, such
as InfoHighway, by complying with the process set forth in Section 271 of the
1996 Act. The result would be less competition, which is the exact opposite
intent of the 1996 Act. Consumers, especially small to medium-sized businesses
would yet again be denied the very benefits anticipated by the opening of local
markets to new entrants, including technological innovation and creative service
offerings.
If InfoHighway's experience is an accurate
reflection of what is occurring throughout the industry, and I believe it is,
the RBOCs have frustrated and will continue to undermine competition at every
opportunity. Recently, for example, one particular RBOC proposed to reduce by
nearly half the wholesale margins for local service in Massachusetts and
withdrew advanced data services to companies such as ours after we successfully
launched the product in New York. Passage of the legislation before us today
would serve only to reinforce this anticompetitive behavior.
Allowing the RBOC's to transmit advanced data services across Lata
boundaries also would further tighten the capital markets for entrepreneurial
companies like InfoHighway. The capital markets are demanding performance
measurements from the new service providers, which is a good, sensible
requirement. Until the local markets are completely opened, however, giving the
RBOC's interLata data authority would be viewed as support for the incumbents,
not for competitors. The legislation, in short, would greatly hinder the ability
of competitive service providers to secure much need funding, both today and in
the future.
Eliminating the RBOCs unbundling and resale
obligations with respect to advanced services, such as DSL services, would be
equally as harmful to InfoHighway and other competitive carriers. We believe, as
does the U.S. Court of Appeals,/2 that there is no distinction between these
services and standard voice services. The RBOC's must provide access to these
services, through unbundling and resale, as they do their other service
offerings. Data, not voice, represents the future of communications. Denying
competitors access to such services would set in motion their future
obsolescence while, at the same time, handing over even greater monopoly power
to the RBOCs. The fact is Mr. Chairman the legislation before us today would do
tremendous harm to competitive carriers while giving the RBOCs relief which they
simply do not need. First, in the 271 process, the statutory scheme already
exists that would effectively provide the RBOCs with the relief proposed by the
new legislation. Verizon, for example, can today offer interLata data services
in New York, my home state, because their 271 application, in accordance with
the 1996 Act, was approved by the FCC. Second, new emerging competitive service
providers already are deploying broadband services and, I submit, would be
deploying them substantially faster if the RBOCs were convinced that no
exemptions from the 271 process would be forthcoming. Finally, the RBOCs
themselves are deploying broadband high speed Internet access to their
customers. And they are doing so not because they have been freed from their
"regulatory shackles," but because competition is forcing them to.
Even the most cursory analysis of the facts will leads to
the conclusion that any new legislation concerning broadband
deployment is unnecessary. What is needed is time and patience. The plain
fact is the 1996 Act states in unambiguous terms that compliance with the 14-
point checklist contained in section 271 will result in the relief from
interLATA restrictions the RBOCs seek. This essential quid pro quo process can
and will work, and it would be completely counterproductive to override the
process in place by enacting the legislation before us today.
I urge the members of this Committee to uphold the 1996
Telecommunications Act and to "stay the course" on behalf of competition and
American consumers. By allowing the 1996 Act to continue to deliver the promise
of competition, enterprising communications providers like InfoHighway will
continue bringing high speed Internet access and choice in service providers to
consumers across the country.
This concludes my
prepared statement. Thank you again for the opportunity to testify today. I will
be happy to answer any questions.
FOOTNOTES:
1 The term "U-Platform" refers to all unbundled network
elements being combined and provisioned as a single entity.
2 Association of Communications Enterprises v. FCC, 235 F.3d 662 (D.C.
Circuit January 9, 2001).
Document 51 of 55. 