Choice One Not Fretting Over TauzinDingell Bill

May 24, 2002
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GRAND RAPIDS — A good portion of the telecommunications industry has been a-boil this spring over the so-called Tauzin-Dingell Bill.

The proposal, which passed the House two months ago, is named after its authors, Congressmen John Dingell (D-Mich.) and Billy Tauzin (R-La.)

One of the controversial parts of the measure is that it would relieve the so-called Baby Bell telephone companies of the obligation to lease lines to CLECs, competitive local exchange carriers.

In the eyes of the bill’s opponents — namely the CLECs — as well as free-market advocates, the measure would end local competition by restoring the Bells’ control and, therefore, would enable those telephone giants to raise phone rates as much as they choose.

Theoretically, opponents also argue, the Bells’ next move would be to reassert monolithic control over long distance service, and the Bells once again  would have an effective national monopoly.

Proponents of Broadband development also believe that Tauzin-Dingell would buttress the Bell’s foot-dragging and competitive urgency to extend true high-speed Internet or Broadband service across the so-called last mile.

Well, the broadband issue aside, one of this community’s CLECs isn’t too worried at the moment about Tauzin-Dingell.

According to Ythan (pronounced “Ethan”) Lax, spokesman for Choice One (which two years ago bought the local U.S. Exchange company), the Tauzin-Dingell measure was dead on arrival when it reached the Senate Commerce Committee.

“I don’t know if you read what Fritz Hollings said when the bill arrived in the Senate,” Lax chuckled. “He called the Tauzin-Dingell measure ‘blasphemy’.”

Sen. Hollings (D-S.C.) is the chairman of the Commerce Committee and has all but said he will not permit the measure to come up for a vote in the committee, let alone the full Senate.

Moreover, Lax noted that the vote in the House for Tauzin-Dingell, while not close, certainly was not overwhelming, and thus doesn’t exhibit any great national groundswell of support for the Bells.

Which, Lax believes, is another way of indicating that CLECS need have no worries about Bell monopolies this year, if they ever did. 

Lax said Choice One certainly has experienced no difficulties with the local Bell.

“The local incumbent provider hasn’t been doing any foot-dragging,” he said. “We have a solid working agreement. In fact, we’re probably one of their biggest customers, if not their biggest.”

Of course, he added, Choice One is a good customer because he understands that it now is the country’s fastest-growing CLEC.

“We’re four years old and we’re expecting to be in the black this year and to be tracking free cash flow positive by the middle of 2003.”

By the end of last year, he said, Choice One had 27,000 clients and 177,000 lines, all in the northeast quadrant of the country.

This year, Lax added, the company serves 80,000 clients and 400,000 lines. (The company strictly serves business clients except in Michigan, where state law requires it to offer service to residential patrons.)

“Our secret has been that we have built what we needed as we went — we didn’t overbuild. We have grown as we needed to grow and haven’t blown all our cash on infrastructure.”

He said the other secret of Choice One’s success was the recession.

“When a corporation is trying to cut its fixed costs during a downturn, we’re one of the people they look to.”

The firm’s newest service area is Erie, Pa., rounding out the western half of Pennsylvania. Other major urban service areas in the northeast are Portland, Me., Pittsburgh, Pa., Youngstown, Ohio, and Buffalo, N.Y.

“And Grand Rapids has been a great market for us,” he added.

“When we acquired U.S. Exchange, a tremendous client base came with it. We were able to offer the same or better rate than you get from the incumbent provider. We still employ hundreds of people here, and that’s been great word of mouth for us.”

In addition to the elaborate U.S. Exchange switch, the purchase brought three so-called co-locations with it. “These are central offices where we located equipment, each with a three-mile radius.” The co-location equipment enables the firm to boost its signals so they have equal strength throughout each service area.

The firm also has such offices in Wyoming, Comstock Park, Hudsonville, Zeeland, Holland, Holland North, Hastings and Dutton.

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