Howard Buskirk

CompTel offered Commerce Dept. Technology Undersecy. Phil Bond its presidency, but he turned the job down, sources told us Fri. Sources denied rumors that NTIA Dir. Michael Gallagher was in the running for the CLEC association job. The CompTel Board has been seeking a strong candidate, most likely with solid Republican credentials, to replace former Pres. Russell Frisby. A source said Bond had questions about the influence of the group going forward. CompTel’s largest members, AT&T and MCI, are being absorbed by the Bells. Moreover, many companies in the CLEC industry are still revising business plans as UNE-P phases out in favor of market-negotiated rates. Bond didn’t comment. Bond has been at the department since Oct. 2001. Like Gallagher, he has strong ties to former Sec. Don Evans, a close friend of President Bush. Bond used to be dir. of federal public policy programs at Hewlett-Packard.

Verizon agreed to let merger partner MCI again talk with Qwest after Qwest again upped its bid for the CLEC Thurs. The Verizon statement comes after Qwest complaints that the MCI board was shortchanging shareholders. “Verizon has a signed agreement with MCI that we believe will deliver superior value to MCI’s shareholders,” Verizon said in a statement: “At MCI’s request, we have agreed that it may have discussions with Qwest about any offer Qwest presents until the MCI shareholder vote.” Banc of America analyst David Barden, who said “the ball is back in Verizon’s court,” assumes Verizon will come back with a revised offer for MCI. Jessica Zufolo, analyst with Medley Global Advisors, said she isn’t sure how the fight will come out: “Qwest is making a full frontal assault and pulling out all the big guns to change the dynamics of this deal. It seems like the conventional wisdom is Verizon will pull it out.”

Qwest made a 3rd offer for MCI on Thurs., raising its bid to $9.07 billion. Qwest urged the MCI board to weigh its offer. “We're not giving up,” Qwest Senior Vp Gary Lytle told us. “There’s no give-up in Qwest.” Lytle said Qwest is concerned that rival suitor Verizon has convinced the MCI board not to listen to shareholders. Lytle said Qwest specifically calls on MCI to let shareholders vote on its latest offer.

Nortel won a key U.S. govt. contract to help move the Defense Dept.’s Defense Information Systems Agency (DISA) to a VoIP network completely under Pentagon control. Once updated, the system, now housed in MCI-owned facilities, will shift to 6 Air Force bases across the U.S., a process sources said should take about one year. Nortel won a $20 million contract to provide the technology to help DoD switch to VoIP. Nortel is working under General Dynamics and CSC, which won the contract to redesign the Defense Switched Network (DSN). “The DSN is a large, sophisticated global network that is well designed and operated, but it also has relied on a managed service from private sector… providers for a portion of its infrastructure,” said Chuck Saffell, pres.-federal solutions for Nortel. “That means that the ability of the DSN to respond to any given crisis could be restricted because it is not under direct governmental control.” “What this starts is the process of the [network] becoming VoIP,” a Nortel federal solutions official told us: “For us, it’s a seminal event and we hope DoD views it that way as well.”

MCI once again rebuffed Qwest Tues. accepting a revised -- but still lower -- bid from chosen merger partner Verizon. Qwest said in a statement it was still assessing and left the door open to another run at MCI. Verizon offered $23.50 a share in cash and stock, which includes a 40-cent dividend MCI has already paid to shareholders. Qwest instead has offered $8.45 billion, or $26 a share.

UBS said in a report Thurs. that the Bells have signed commercial agreements with 30-50% of their UNE-P base of 16 million lines. The report provided some of the most complete numbers yet on commercial agreements to replace UNE-P. Not all Bells have provided complete numbers. BellSouth didn’t give a line count for a contract it signed with AT&T citing a confidentiality agreement with the CLEC. UBS said UNE-P contracts will give Bells a “modest boost” of $95 million in EBITDA or roughly 35 basis points of wireline margins for the Bells collectively. The Bells obtained deals about $4 per line higher than under UNE-P regulation, UBS said. On the negative side, UBS sees a base dwindling by 6.5 million to 9.8 million over 5 years based on 3.5% monthly churn. Qwest likely has agreements on the highest percentage of lines, UBS said. UBS said BellSouth, following a deal with AT&T, has 38% of its UNE-P lines under agreements. For SBC the percentage is about 50% and for Verizon 38%, UBS said.

Tex. Attorney Gen. Greg Abbott (R) filed a landmark lawsuit against Vonage for failing to make clear to customers that the firm’s service doesn’t provide access to traditional emergency 911 service. The suit, filed under the Tex. Deceptive Trade Practices Act, charges Vonage with “misrepresenting the type of emergency telephone service it offers, and the fact that the ‘911 dialing’ feature is not automatically included when a customer signs up for telephone service.” Abbott seeks $20,000 per violation.

Both sides in the often bitter ultra wideband debate -- proponents of MultiBand OFDM technology and Motorola spinoff Freescale -- said Thurs.’s FCC decision revising UWB testing rules was good for UWB device makers as they start to build a market, with some of the first consumer devices possibly on shelves before Christmas.

SBC has reached 22 commercial agreements covering 31% of its UNE-P lines, a spokesman said Mon. Negotiations continue with other wholesale customers. Unlike BellSouth and Verizon, SBC didn’t give numbers on its negotiations March 11, as the FCC began its one-year phase-out of switching as a TELRIC-priced UNE. The Bells all reported substantial numbers of agreements just before the deadline.

In a major govt. contracting development, the GAO said the Treasury Dept. must reopen negotiations on a marquee $1 billion telecom contract that AT&T won from the Treasury Dept. The move is a setback for AT&T and a win for other bidders, who may have another chance to win the contract. “This is a big deal,” said Warren Suss, a consultant and expert on govt. contracting issues. “This is the Dept. of Treasury’s core communications network. A lot of important stuff goes over it, particularly the IRS data.”