Windstream CEO Says 'Functioning Wholesale Market' Key, Cites Spectrum and Tech Concerns
LAS VEGAS -- A key telecom challenge is to ensure regional and smaller providers can compete in a market dominated by large national players, Windstream CEO Tony Thomas said Wednesday. He said his company is the No. 5 fiber provider, with half a million locations on-net. "We can't be a national provider without some sort of basic, functioning wholesale market," he said, noting the need to serve business customers with scattered locations. He backed spectrum policies that do more to allow smaller bidders to compete with the big four national wireless carriers and voiced concern about large tech companies gobbling up upstarts.
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Because Windstream is an ILEC and CLEC, it seeks consensus building and practical compromises to avoid "ping-pong" policy disputes during political changes, Thomas said. Windstream agreed with USTelecom on a proposal to delay ILEC wholesale pricing relief until Feb. 4, 2021 (see 1806220027), but other CLEC executives criticized it earlier at the Incompas Show (see 1810300058).
Access to incumbent copper remains vital as a bridge to fiber and fixed-wireless solutions, Thomas said. Windstream has received "love letters" from Verizon about fiber replacing copper, he said, and is trying to cooperate: "No one wants to stand in the way of network modernization. I'm not going to tell Verizon that keeping copper infrastructure is better than going to fiber. ... Let's just have a sensible, smart transition plan" that seeks "common-sense solutions." He said the copper-to-fiber transition is "really hard" and will probably outlast him.
Thomas said the IP transition will happen faster because TDM "is collapsing" as carriers remove support systems. The vast majority of Windstream TDM customers will be on IP-based and Ethernet services by February 2021, over fiber or fixed wireless, he said. The difficulty is convincing customers to migrate, which can be disruptive, and he expects some carriers to use pricing leverage. Dimitri Kioukis, Sprint wholesale director, said on a Tuesday panel that toward the end of the IP move, "you have to use a little bit of a stick," and if customers don't voluntarily migrate, their service "will go dark," given TDM costs.
Windstream is looking to acquire spectrum in upcoming millimeter-wave auctions to fuel its fixed-wireless growth but is concerned the playing field is tilted toward large carriers. "We all know who is going to win," Thomas said, citing "massive concentration of spectrum in the hands of a few players." The FCC "has to step back from that" or else competitors won't be able to innovate. "We have discrete territories," he said. "Asking us to bid at a state level or a large geographic-block level" is problematic.
Thomas said it's difficult to compete with powerful tech players -- such as Google, Apple, Amazon and Facebook -- and with AT&T and Comcast, which have become major content providers. He said Windstream is moving to become a more software-centric company: "We need to have more capabilities that ride on top of the infrastructure." Whenever Windstream discovers "really cool" new companies it's interested in acquiring, Google, Facebook or somebody else moves to buy them, the CEO said. He said Windstream is having success with software defined wide area networking.