'A Matter Where Self-Interest Prevails'

Squabbling among major telecommunications providers apparently has ended a collective industry push to make telecom services more widely available to government agencies.The battle pits Sprint Communications Corp. and WorldCom Inc., both holders of the FTS2001 federal long-distance contract, against AT&T Corp., Qwest Communications International Inc. and other companies hoping to get a piece of the government's long-distance business.The AT&T and Qwest faction wants telecom services to be placed on the General Services Administration's supply schedules. Sprint and WorldCom view this proposal as a backdoor effort to steal their FTS2001 business. The FTS2001 contract, awarded to the two companies almost three years ago, offers a wide range of long-distance and other telecommunications services to federal agencies. Originally valued at $5 billion, the eight-year contract now is worth only about $2.3 billion, the General Accounting Office reported in April.The dispute also threatens to make a battleground of the Industry Advisory Council, an association whose purpose is to bring together information technology companies to promote their shared interests with the federal government.The conflict arose when the Telecommunications Shared Interest Group, a subset of the IAC, asked the board of directors to approve a draft letter urging GSA to add telecom services to its schedules. Many SIG members believed the request had been unanimously supported by its membership at a Sept. 30 meeting.Sprint and WorldCom, however, contend their representatives at the meeting, while perhaps not vocal in their opposition, did not support the proposal."The vote was not unanimous, there was just nobody who stood up and protested," said WorldCom spokesperson Natasha Haubold. "WorldCom did not have an executive there who could make that kind of decision. ... For something of this magnitude, we would need to discuss this [internally]."Tony D'Agata, vice president and general manager of Sprint's government systems division, also insisted his company didn't go along with the proposal."Certainly, there were some of us who were not in agreement with the approach, so I don't think there's consensus," D'Agata said.Their opposition led the six-member board of directors to reject the proposal shortly after, a move that angered the proposal's supporters."I don't know what caused Sprint and [WorldCom] to reverse their position, but ... I'm very concerned over how one individual or company can enforce a cartel environment," said James Payne, senior vice president of the government systems division, Qwest Communications International Inc.Payne, who initially proposed the group support adding telecom services to the GSA schedule, said a poll was taken at the Sept. 30 meeting after lengthy discussion, and all seemed to agree that a letter be drafted and sent under the auspices of the IAC board.WorldCom and Sprint representatives insist they did not reverse their positions, because they had never supported the idea of the letter at the SIG meeting. Sprint's D'Agata also questioned whether the IAC should even send such a letter, because it could be construed as lobbying, which would violate the organization's charter.Sources close to the issue said this was the reason the IAC board cited in voting down the proposed letter, though one observer said the proposal was considered "as Qwest trying to find a way so that they don't have to meet the standards of FTS2001."In an e-mail to the telecom shared interest group, Denny Smith of Wheat International Communications Corp., and chair of the group, said: "[It] is not in the interests of IAC members, nor the government, for Shared Interest Groups [to] stake out positions that can injure the business prospects of its members."Although a draft letter was prepared for the IAC board's consideration, Smith said: "If copies of the draft(s) ever appear in public through someone's misguided attempt to stir the pot, it should be publicly refuted by IAC as a working paper that did not ever meet the test of our charter and policies; it did not have the support of IAC, nor a consensus among the telecom industry member firms."Alan Balutis, executive director and chief operating officer of IAC and its parent organization, the Federation of Government Information Processing Councils, told Washington Technology that, from IAC's perspective, the issue is over.But this is not as simple as a competitive schism between Sprint and WorldCom on one side, Qwest on the other. Other member companies of the telecom group also are angry that the IAC board took action before they had a chance to review a draft letter and suggest modifications."I got a message ... that a draft letter was going to the board, and if it was approved, it would be sent back to the members of the group," said Chris Vasko, director of business development, government and institution markets for XO Communications Inc. Vasko, who belongs to the telecom shared interest group, said the letter should have been reviewed before going to the board."I'm objecting to the board of directors making a decision on behalf of the SIG. ... It doesn't appear that I'm going to have the opportunity to make any suggestions," she said.AT&T Corp. representatives at the meeting also backed the idea of drafting the letter. "It is public knowledge that there was unanimous consensus for the [action]," said Mary Ellen Caro, vice president of AT&T Solutions Public Sector.Caro disputed the idea that IAC would appear to be lobbying on the issue. "Our point of view is that communication of industry views is consistent with the IAC charter ... and that IAC is really to foster" communications between government and industry, she said.Rep. Tom Davis, R-Va., chairman of the House Government Reform subcommittee on technology and procurement policy, supports the idea of adding telecom services to the GSA's Federal Supply Service offerings."We have heard from agencies that would like to have more choice in purchasing telecom services and better opportunities to customize their services across agencies," Davis said. Many agencies "are reluctant to publicly endorse this proposal, but we are confident this would provide agencies with an additional tool to meet their telecom and technology needs. ... This proposal highlights the strengths of the [FSS and Federal Technology Service.]"Lisa Crawford, president and chief executive officer of The Crawford Group, a consulting company with a background in telecommunications, said the dispute is broader than who did what at the meeting. It reflects policy differences over what constitutes competition and whether the GSA is committed to providing agencies with choices, she said.Even though FTS2001 is a voluntary contract ? federal agencies aren't required to use it as their vehicle for telecommunications services ? GSA negotiated minimum revenue guarantees of a combined $1.5 billion for Sprint and WorldCom. Crawford said the agency has argued that the minimum guarantees have to be met before agencies can review their telecom choices. "They have de facto reinstated mandatory use. ... New entrants are cut out, [and] small, disadvantaged businesses that could partner are locked out," she said.But the policy discussion has been lost in the telecom companies' scrambling for ways to get a piece of the pie."Let's be clear," Crawford said, "This is a matter where self-interest prevails."