Scott Beer, General Counsel of Zayo Group joins Steve Davis, SVP of Public Policy and Government Relations at CenturyLink, and Michael Rhoda, SVP of Government Affairs at Windstream Communications. Our friend Andy Lipman, Partner at Bingham McCutcheon, moderated the keynote panel of day 2. The focus was on the role of the regulator in the local metro carrier marketplace, including industry update and analysis.
The common thread between all 3 of the panelists is that their companies have all been very active in recent M&A activity, when regulatory analysis heats up.
Andy asked Scott, when you are doing your due diligence, what role does regulatory activity have? Scott said “regulatory does not wag the dog at Zayo. We had to dig down a bit deeper in our recent 360 acquisition, but our previous acquisitions, which have been wholesale in nature, we did not have too many issues.”
Michael continued that “in competitive markets, we need to let them be competitive.” There has been a number of deals in the past few years where the state has loaded up on regulations that got in the way of the deal. His wish is to not let regulatory processes get in the way of doing business.
Steve added that he doesn’t think the FCC is going to change though he wants parody with the cable guys. He would like to be treated the same as the cable guys, in places where CenturyLink has regulations for the same products and cables have none.
Scott concluded that the locked in provisions ratchet up the initial volume commitments- which makes it difficult for new providers to compete.
Andy then asked how did Zayo participate in the Obama Broadband Initiative? Scott stated that Zayo received 4 awards in the past few years, varying in size and direct services. “Our experience so far has been very positive, allowing us a cost-effective way in getting to an area where we wouldn’t have previously gone.”
Michael shared that they sat out on round 1 and got into round 2, focusing on getting fiber deeper into our rural areas for our consumer base. Cost is high in these areas and without federal grants, these places wouldn’t have access they now enjoy.