The apparent demise of state internet provider Vitts networks raises questions about a regional telecommunications market dominated by baby bell company Verizon.
At the November ribbon cutting ceremony for Vitts networks 3.5 million dollar Manchester headquarters, Congressman John E. Sununu called the company �the future of New Hampshire�s economy.� Considering the occasion, and the Bedford Republican�s technophillic propensities, such bombast may not be surprising �But three month later, Vitts is joining Digital broadband, Northpoint, Covad and PSInet on the growing national list of failed or flailing digital subscriber line companies. According to Erle Pierce of Verizon, a company that both serves and competes with DSL providers like Vitts, the rash of washouts merely reflects broader economic trends.
This is a very complicated, very expensive business to be in and the funds for these companies have gone the way of the funding for dot com companies�People are looking at profitability. Not everybody can do it better, faster, cheaper, and that is what many have tried to do.
But Verizon�s competitors are in the odd position of also being the baby bell�s customer. To sell DSL service those competitors need Verizon�s lines and technicians. And critics say regional Bell companies like Verizon, thwart competition. Lee Walker of Enfield�s Segnet.com explains speculation concerning Verizon�s motives is perhaps inescapable.
If you had a company that was built on building telecom infrastructure throughout New England, and it was dictated that you were going to have to let other people use �. Would you be excited? Probably not.
That Verizon must allow other companies use its lines was a condition of the 1996 Telecommunications act, which deregulated the telephone, and broadcast industry to foster competition and reduce consumer costs. Erle Pierce says Verizon embraces the spirit of the act and has worked hard to give competitors the access required by law.
From Manchester to Marlboro, to Madison to Wolfeboro we have room in there for competitors to place their equipment and make it easy for them to connect to our local network.
Be that as it may, some local Internet companies say they wanted to steer clear of providing DSL service because of the necessary partnering with Verizon. Brian Susnock, President of Destek says his sole foray contracting with Verizon for DSL service proved a headache. Susnock unsuccessfully sued both Verizon and the state in 1999 for entering into what he said was an anti-competitive agreement concerning Verizon�s providing cut-rate services for the university system.
I waited 4 and a half weeks to get word back on the dsl circuit I tried to put in �They could have been nice enough to have called me within a couple of hours after submitting the order but they waited and dodged the issue and told me they lost the order. I hear stories like this all over.
Verizon�s Erle Pierce says his company has several thousand employees working to hasten connections for all its dsl customers � some 500,000 across the Northeast. Pierce also stresses the difficulty of managing the conflicting needs of numerous vendors who all want immediate service.
If we have 30 competitors all telling us different things are number one for them then it�s extremely hard to do.
Verizon�s balancing act is apparently even more challenging in states like Massachusetts and New York. In Massachusetts, competitors report of yearlong delays for services that might take a month locally�. And in New York, many hope a class action suit will halt Verizon from singing up new DSL customers until it better serves the customers it has. There are no such legal actions in the works locally, but there are indications that Verizon is willing to give customers the sometimes unrealistic impression that expanded services are in the offing. Steve Goldsmith, chief technology officer for segnet.com, a Verizon customer and competitor, Hanover is a good example.
You call verizon and say I want a dsl and they say, Hanover coming soon, will put you on the list and call you as soon as it�s there. Now it has not been on its deployment list�.and the way they leave you feeling is it�s coming real soon and its going to be 49 dollars which prevents you from buying a competitition.
Goldsmith, however, acknowledges that building infrastructure is easier said than done, and that blaming Verizon is admits that if he were in Verizon�s shoes, he too, might exert the privileges of incumbency. Verizon�s Erle Pierce sums up that posture as follows.
We�re the big one on the corner sand everyone�s out there to take a piece of us and to the extent that others want to take apart our transport network and put up their own, we�re going to slow it down in the courts in front of regulators. We�re going to do what�s best for our company and out shareholders.
So where does that leave Vitts? Company officials refused to talk on tape, and deny that Verizon�s market share has anything to do with Vitts� financial woes. But one Vitts offical did characterize the baby bell as a monopoly, The public utilities commission declined to weigh in on the Vitts situation before the company�s hearing tomorrow afternoon.
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