Competitors Made Gains, Still Face Challenges, ALTS Report Says

February 3, 2000 -- The Association for Local Telecommunications Services (ALTS) has issued a report saying that, while local telecom competition has made impressive gains, it still faces major challenges.

The conclusions are part of ALTS' first annual report on the "State of Local Telecom Competition."

The report focuses on tremendous growth in CLEC capital formation, revenue and access line growth, and market capitalization.  Tremendous strides have been made in those areas since the passage of the Telecommunications Act on February 8, 1996, the report notes.

The Act resulted in the entry of over 375 firms and the investment of nearly $30 billion in telecommunications infrastructure, the report notes.  Consumers are benefitting from lower costs, higher quality and the advent of high bandwidth services.

Still, it will take time for ubiquitous competition to develop, the report says.  For that to happen, policymakers must rigorously enforce the pro-competitive terms of the Act.

ALTS noted the following statistics:

• There were about 160 facilities-based CLECs in 1998; currently there are 333. Only 13 existed before the Act.

• In 1996 there were only 9 publicly-traded  competitive carriers, with a market capitalization of $3.1 billion. In 1998, there were 24 publicly traded CLECs with a market capitalization of $17.5 billion.  Today, there are 35 with a market capitalization of $86.4 billion.

• The capital expenditure for CLECs was $5.0 billion in 1997 and $9.2 billion in 1998. That figure rose to $15.1 billion in 1999.

• In 1996 there were only 1 million competitive access lines. In 1998 the number rose to 5.5 million and rose to 10.4 million in 1999.

• CLEC revenue from switched local services was $782 million in 1996. That rose to $3.5 billion in 1998 and to $6.3 billion in 1999.

• CLECs operated 21,414 fiber route miles in 1995, which rose to 103,657 miles in 1998. In 1999, it grew to 161,717 miles.

ALTS said 1999 saw significant legal and regulatory victories such as the Supreme Court upholding the FCC's authority on pricing guidelines for interconnection.  ALTS also noted that governmental bodies enforced existing reciprocal compensation agreements.

In addition, the FCC made landmark pro-competitive decisions on collocation and good-faith negotiations.  However, still needing further resolution are a variety of issues related to reciprocal compensation, access charges, access to loops and collocation space and obtaining non-discriminatory access to buildings and rights-of-way.