Can You Hear Me Now?

Can You Hear Me Now?
by Dave Russ

Way back in 1996, Congrss passed the Telecommunications
Act. This ground breaking piece of legislation was enacted
to loosen the death grip that incumbent Bell monopolies
held on consumers wallets... as well as foster competition
in the long distance and broadband arenas.

In the FCCs own modest declaration... "The
Telecommunications Act of 1996 has the potential to change
the way we work, live and learn. It will affect telephone
service -- local and long distance, cable programming and
other video services, broadcast services and services
provided to schools."

"Potential" being the key word here.

Oh, it started out well enough... with the usual hype and
fanfare associated with the Internet heyday. New players,
fueled by the 90s investment frenzy, arose like wildflowers
in May... collectively spending billions of dollars on the
race to blur the line between the old switched networks and
the new IP pipelines.

Breakthrough technologies, such as VOIP
(Voice-over-Internet Protocol), threatened to shake the
very foundation of the telecommunications world, offering
consumers viable new choices. Companies like Net2Phone and
Dialpad gave anyone with a computer, microphone and dialup
connection, the ability to do an end around the established
long distance carriers.

Soon, VOIP went mainstream, finding its way directly to the
telephone and bypassing the need for a computer. "Pay by
the month, not by the minute" became the rallying cry of a
new generation of long distance marketers... as the concept
of flat-rate and "unlimited” long distance blossomed.
Consumers and small businesses no longer needed to fear
receiving a huge long distance bill come months end... as
they stepped off the per-minute treadmill.

And all was well... or so it seemed.

But did these cutting edge Internet technologies forever
change the telecom landscape, as promised? Was it time yet
for high-fives at the FCC... and was a victory parade in
order for consumers?

In a word... No.

Quality and reliability issues, indifferent customer
service and unsound business practices... exacerbated by
the overall telecom meltdown, wiped out most of these
alternate providers... burying them in the dot.com
graveyard.

Meanwhile, the Big Three (AT&T, MCI and Sprint) still enjoy
the lions share of US long distance revenues.

And has the local market fared much better? Not really.
The 1996 Act required the regional Bell incumbents to grant
access to their UNE-P (Unbundled Network Element-Platform).
But like all good monopolies, the Baby Bells have done
everything humanly possible to prevent this access. Just
ask Covad, NorthPoint and Rhythms... companies that all had
far-reaching aspirations of bringing high speed DSL to
everyones doorstep.

So much for competition, right?

Well, dont give up quite yet. There is some good news.
Despite the carnage, there has been a survivor or two.
Companies that refused to be stonewalled and have remained
true to their vision.

One in particular that stands out is a CLEC called Z-Tel
Communications (Nasdaq: ZTEL). For the past few years,
Z-Tel has valiantly battled the huge Bell monopolies to try
and gain entry into the local telephone markets. And
believe it or not, theyre succeeding... having quietly
acquired over 350,000 paying customers in 47 states.

Even more impressive has been Z-Tels commitment to
innovation and value. They recently introduced Z-LineHOME
Unlimited™, a bundled package ($49.99 in most states) of
unlimited local calling, unlimited nationwide long distance
and popular calling features like Voicemail, Caller ID,
Call Waiting, 3-Way Calling, Find Me and Notify Me.

In addition, Z-Tel is poised to roll out their exclusive
Personal Voice Assistant (PVA). The Personal Voice
Assistant is a revolutionary step forward in voice
activated communications... and will soon be included in
the Z-LineHOME Unlimited feature set at no extra charge.

Gregg Smith, president and chief executive officer for
Z-Tel, in recent meetings with the FCC and Congressional
leaders, stated:

"Due in large part to UNE-P, competition is generating
improved services for consumers every day. For example,
Z-Tel is actively investing in and developing
next-generation dial tone services that we believe will
change the way people communicate, like voice recognition
technology and personalized online directories. Soon,
instead of looking up phone numbers, our subscribers will
be able to simply say, call Aunt Tracy on her cell phone
and be connected.

And today, for a flat monthly fee, Z-Tel subscribers can
call anywhere in the U.S., talk as long as they want and
take advantage of advanced services that make their
communications more powerful.

These are exactly the kinds of services that the 1996 Act
sought to deliver."

Yes they certainly are. What do you know... maybe telecom
deregulation is finally working after all.

Can you hear me now?