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PAETEC CEO Chesonis to Opine on CLEC Resurgence Letterman-Style Arunas Chesonis Is the Man of the Hour

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PAETEC CEO Chesonis to Opine on CLEC Resurgence Letterman-Style Arunas Chesonis Is the Man of the Hour Day 1 Show ShowDaily produced by COMPTEL Monday, Oct. 9, 2006 — Vol. 6, No. 2 Published by: PAETEC CEO Chesonis to Opine on CLEC Resurgence Letterman-Style Arunas Chesonis is the man of the hour. His company, 8-year-old PAETEC Communications (Booth said, noting that while auditing and TEM traditionally have been a focus for consultants, it “really 407), has just announced that it will acquire fellow CLEC US LEC, creating a billion-dollar “Super Tier needs to be something that every carrier does.” 2” provider, rivaling XO Communications Inc. (Booth 715) and the would-be combination of Time Another item might be: Cooperate with other CLECs to deliver comprehensive coverage. Warner Telecom Inc.-Xspedius, another recently announced CLEC deal. Chesonis said CLECs are doing this more readily today than two years ago. They no longer are as Chesonis serves as chairman of the board and CEO for PAETEC and is responsible for the vision, concerned about enabling a competitor in their market. leadership and direction of the company, which serves more than 17,000 U.S. business customers. While offering such advice to his peers may seem awkward on its face, Chesonis doesn’t think it He has been invited to address his peers at this week’s COMPTEL PLUS where he will talk about is. “When you talk to your competition, what’s the biggest market share chunk we are going to have what he describes as the CLEC resurgence. “Anyone who has weathered the storm and is focused on collectively — 4 or 5 percent? We are not the bad guys to one another. We are not the ones we have end customers, especially at the enterprise level, is going to do really well the next five to 10 years,” to worry about,” he said. Chesonis said, basing his comments on feedback from some 400 executives that sit on PAETEC’s The common competitors found in the Bell-IXC combinations will continue to be a driver for customer advisory boards. Arunas Chesonis consolidation among CLECs, he said, noting that in the case of PAETEC’s pairing with US “They are telling us they are struggling to find good vendors to do business with, [given] all LEC, it was a consideration. “US LEC came up after [PAETEC’s] recapitalization and it was the changing technologies that they need help with,” he said. “They can’t hire enough people a great opportunity to create a much larger company with the scale you need to compete with internally to support what their companies’ needs are. So, they are depending more and more KEYNOTE ADDRESS: the bigger companies,” he explained. on outside companies to advise them.” ARUNAS CHESONIS Combined, the company will have annual revenue of nearly $1 billion and nearly $190 With this in mind, Chesonis said his keynote address will be an “upbeat message” on how CHAIRMAN & CEO million in earnings before interest, depreciation and amortization. The company hopes to COMPTEL members can improve on their customer relationships David Letterman-style. “If PAETEC save $25 million in costs in the first year after the merger closes. you were a competitive telecom company today, what would be the top 10 things to focus on He added that it’s anybody’s guess how many competitive players will result. He left the Monday, Oct. 9 to be successful with your customers?” door open on PAETEC’s future options. “We are both growing combined in that 12 to 15 So, what’s on this top 10 list? Chesonis offered a sneak peak at one item: Become a 1:15 - 2 p.m. percent range, so we don’t have to acquire other companies to continue to grow, but I think customer’s telecom expense manager. “Most companies that we do business with don’t really Crystal J2 both companies have made acquisitions in the past and will look to be sort of opportunistic,” know how much money they are spending and if they are being appropriately invoiced,” he he said. COMPTEL CEO: Competitors Must Work COMPTEL Holds on Offensive, Not Defensive, Game Annual Board Elections The honeymoon period is over for the new head of the country’s He said COMPTEL members and COMPTEL will hold its competitive telecommunications industry. Earl Comstock, who was named competitors in general must do a better annual board elections dur- president and CEO of COMPTEL in June 2005, wants to set a new tone for job of articulating the value they provide ing the COMPTEL PLUS the organization during his second year as its leader. to constituents. Fall 2006 Convention and ANNUAL BOARD “Rather than just playing defense and going into the next round of FCC “While there’s consolidation, many EXPO. Companies are ELECTIONS policymaking and legislation, we need to have a firm agenda,” he said in an companies are seeing growth and contin- allowed to nominate them- advance interview about his message to the COMPTEL team, which will ued success in primarily the small busi- selves or other COMPTEL Monday, Oct. 9 kick off the conference today at 1:15 p.m. “What are the core elements that ness market,” he said, noting market share members. They must make 5:15 - 5:45 p.m. need to be there for competition? We need to start focusing on message gains against the Bells. nominations within their Crystal J2 rather than just responding to events driven primarily by the Bells.” In addition, he said competitors are membership voting catego- His address today will focus on moving competition and COMPTEL going to be important to serving the Earl Comstock ries, however. members forward. “We need to determine where we fit in this new world 60 percent of custom- Nominations were due going forward,” he said. ers not served by Bell Sept. 8. To do that, he said, COMPTEL members need to identify core needs broadband platforms Elections will be held for four directors in the small member cat- for competitors — regardless of their business plan — to function. From such as Verizon’s FiOS OPENING REMARKS: egory; five directors in the medium member category; and five direc- there, members more easily can find their place in the debates over net and AT&T’s Project EARL COMSTOCK tors in the large member category. neutrality, universal service funding and intercarrier compensation. Lightspeed. PRESIDENT & CEO Elections will take place immediately after COMPTEL’s annual “The main focus is really trying to rally the industry around a core set “It comes down to COMPTEL meeting of the membership, scheduled for Monday, Oct. 9 at 5:15 p.m. of principles that can be taken to policymakers at the FCC and Congress aligning ourselves more Monday, Oct. 9 in Crystal J2 at the Orlando World Marriott. [that outline] the key things that need to be in place for the competitive with [the fact that] we Before that meeting takes place, members will be able to cast industry to survive,” he said. give consumers a choice," 1:15 - 2 p.m. votes for board candidates within their membership voting category He noted that financial markets are starting to respond more favorably he said. “If Congress Crystal J2 at an “early bird” voting location set up near the registration desk at to competitive business models — partially as a result of consolidation and wants consumer choice the Marriott. partially on their merits. “So we’re starting to do a decent job in articulat- and for people to have all Each voting member company is entitled to cast one vote, as long ing to Wall Street and others that were scared off by the tech bubble why these wonderful services over broadband, what are the key things as member dues are paid. [competition] is important,” he said. “But we’re not translating that to they need to do to ensure that the benefits that come from competi- Tomorrow’s COMPTEL Show Daily will have complete coverage policymakers at the federal or state level.” tion stay in place?” of the election results. COMPTEL Classroom Debuts in Expo Hall, Studies Voice Peering and IMS This fall, the organizers of the member-based traffic exchange that carried more than 18 billion VoIP minutes in 2005. He COMPTEL PLUS show want to COMPTEL CLASSROOM also will kick off the Voice Peering Track (see related story on Page 10), which runs from send attendees back to school with 8:30 a.m. to noon tomorrow, with the session “Voice its new COMPTEL Classroom Monday, Oct. 9 Peering Hardware and Software Elements.” The other programming — short tutorials on two sessions in the track are “Transitioning SS7/TCAP hot topics delivered on the exhibit VOICE PEERING and 411 Services to IP” and “ENUM and Least-Cost floor. PRESENTED BY THE Routing.” Featured COMPTEL Classroom VOICE PEERING FABRIC Michael Khalilian, co-founder, chairman and lecture topics include voice peering president of the IMS Forum (Booth 110) and CTO for 9:30 - 10 a.m. and IMS. Many of the COMPTEL eLEC/Vox, will spend his half-hour (11 - 11:30 a.m. members have expressed interest in IMS PRESENTED BY THE today) discussing IMS, the services framework that enables service providers to tap IP to learning more about these subjects IMS FORUM offer blending applications across wireless and wireline networks. His presentation will at a basic level — what is it, who is doing it and what are the revenue opportunities, said provide a technological overview of IMS, examine the revenue-generating possibilities Jaymie Scotto, a spokeswoman for the COMPTEL PLUS programming committee. 11 - 11:30 a.m. and address current deployments. Khalilian also will be a featured presenter in the IMS In addition, she said, it will give attendees who have an expo-only pass a sample of the Palms Ballroom Workshop this afternoon from 3:10 - 5 p.m.
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