'Level the playing field.' (interview with United States Telephone Association Pres./CEO Roy Neel) (Interview)

In today's wild world of telecommunications, some players face more regulations than others.

Roy Neel joined the United States Telephone Association (USTA) as president and CEO in January 1994, after serving as a senior aide in the Clinton-Gore White House. He is responsible for managing all of the association's legal, regulatory, legislative and technical activity. USTA is the nation's sole forum for the small, mid-size and large companies of the local exchange carrier industry. The association represents more than 1,200 companies nationwide, including ATU in Anchorage.

Prior to his White House job, Neel was chief of staff to Vice President Al Gore, charged with building and integrating the office of the Vice President into the Clinton administration. Before working in politics, Neel was an accomplished journalist, and he served in the Navy for four years, including a one-year combat tour in Vietnam.

ABM: In a recent radio interview, I heard you say you were pushing for deregulation. What do you mean by that?

NEEL: When Congress and the White House completed this new federal telecommunications act a year and a half ago, it was considered dramatic and a landmark action and they handed it off to the federal communications commission. They completed part of the job by stimulating competition in the local telephone marketplace, and by beginning to think about more competition in the long-distance telephone marketplace. The part of it they haven't finished is deregulating the entire telecommunications economy, particularly the activities of the local telephone companies.

The local telephone companies are the last piece of the telecommunications industry that are still heavily regulated and we believe unreasonably so. It really is an issue not simply about this company versus AT&T or GCI or something like that, but really has an effect on consumers.

One of the reasons I'm here is that Alaska is a kind of laboratory on how the telecommunications act is working or not working. This issue of continued massive regulation of local telephone companies like ATU is really going to show here in Alaska in two ways. First of all, it puts ATU at a real competitive disadvantage, not only to try to keep its current customers through lower prices, the extension of new services, the investment in their own network, but in being able to invest in new technology and new services. This hurts consumers because it means that consumers are going to have to rely on the whims of these new companies coming in to provide local telephone service. And, correctly, these companies have no regulation - almost none.

They have to submit just one piece of paper to your local regulatory commission on what service they're going to provide and what they're going to charge. ATU has to present reams of information which requires lots of staff and legal time and long waiting periods before they can do that. That takes away consumer choice for Anchorage businesses, for businesses which can't really take advantage of that competition very early. It reduces the chance that residential customers will get an extensive choice of all these new services that are known as the information superhighway.

We think the Federal Communications Commission and the Alaska Public Utilities Commission should finish the job. Deregulate completely and let the local telephone companies compete on a level playing field. We're not asking for additional regulation on our competition. We want to have less regulation so we can compete, too. Get government out of this economy to the maximum extent possible.

ABM: is ATU the only telephone provider in this area that is impacted negatively by this?

NEEL: Well, it's the primary carrier in Anchorage and all of Alaska for that matter. It's the largest provider of local telephone service. But there are a number of other local telephone companies in the state all of whom are affected by excessive regulation whether it's at the state level or federal level. I think it affects all the local telephone companies and their customers.

ABM: If everything you're after came to pass tomorrow, would that lower our telephone rates in Anchorage or would it just allow ATU to provide us with better service?

NEEL: Clearly, the latter, of course. ATU would have the stimulus and the incentive to accelerate the building out of new technology for Anchorage consumers. On the issue of local rates, and this is not well understood, throughout the country local telephone service costs far less than what it costs to provide. It is not, frankly, a profitable business. Local customers and their rates are supported by higher business rates and other income that the local telephone companies have. In very rural areas, its supported to some degree by universal service funds that flow directly to small rural companies The cost of providing local telephone service is much greater than the...