C-Spire breaks a decades old telco monopolyBy WYATT EMMERICH,
Competition is the lifeblood of success, so it’s good news to finally see some competition in the bidding for statewide landline telecommunication services to state agencies, schools, libraries, universities and other governmental entities. After decades of a virtual AT&T monopoly, Mississippi-based C-Spire has won the bid and will save the state $32 million.
“For decades, AT&T was the only real statewide landline provider,” Hu Meena, C-Spire CEO, told me in a telephone interview. “Over the last 15 years, we’ve being putting in thousands of miles of fiber network in the state of Mississippi, so we were able to compete and put in a very attractive bid that allowed us to win most of the services over the next eight years.”
With a good backbone of fiber from one end of the state to the next, C-Spire will now be able to complete the connections to the specific governmental offices.
“We’ll have to build that out. We do that day-in, day-out. That’s part of it. We are ready and willing and have the financial and technical ability to do all of it within the time frame the state of Mississippi needs. Five or six years ago, we couldn’t have done it, but we can do it now,” Meena said.
Private consumers have for years enjoyed competition of telecommunications, but the state government has still followed the old-style, mega contract model, to the detriment of taxpayers. This is now changing.
C-Spire, using vendors and contractors, can scale up and down as the market demands. It’s no longer necessary to have a huge corporate behemoth.
Mississippi is very lucky to have C-Spire, a homegrown Mississippi company owned and operated by Mississippians. Most states have long since lost their local companies to a handful of national companies like Verizon, Comcast and AT&T.
This national trend toward bigger and bigger companies has hurt smaller towns and states. The megacompanies don’t have the same level of local loyalty. The money is swept out of state to the corporate headquarters.
Indeed, one of the biggest problems for Jackson and Mississippi is a lack of local leadership caused by the centralization of business in big metropolises. You can see this in banking, media, insurance, retail, manufacturing and just about every sector of the economy. Local ownership provides a quality of life factor that is invaluable.
In most states, there is no local C-Spire offering competition to AT&T. “That’s what’s giving them heartburn in Mississippi,” Meena said. “There are not many competitors in other states that have a statewide network.”
Perhaps the recent scrutiny of bidding laws and bidding practices contributed to this bidding competition. The state legislature last year reformed the “request for proposal” process making it more competitive and transparent.
Ironically, procurement laws for telecommunications services are exempt from the new RFP regulations. Instead, statewide telecommunications and computer services are controlled by a separate state agency, the Mississippi Department of Information Technology Services (ITS).
Also exempt are the Institutions of Higher Learning (IHL) and the Department of Transportation (MDOT), which, like ITS, have their own separate procurement and bidding procedures.
In addition to being exempted from the state procurement laws, ITS, IHL and MDOT are not accountable to the newly created Mississippi Procurement Review Board.
This kind of government redundancy is inefficient. We should have one set of procurement laws and one procurement review board. Having these duplicate procedures just confuses things for vendors and reduces the quality of our statewide procurement process. I think it has something to do with fiefdoms.
Nevertheless, Meena had favorable things to say about the ITS procurement process. “It was very clear, very transparent. The ITS ran a pristine process. There were certain deadlines that all the bidders had to get their information in that was required. We were able to present to them what we wanted to do in an open setting. It was as well run a process as I have ever seen. Very professional.”
Not only will C-Spire’s bid save taxpayers $32 million, but the voice and data will transmit over fiber, the technology of the future, rather than the old copper wire that is rapidly becoming obsolete. Plus, it’s up to 100 times faster.
C Spire's proposal came in at $123,765,554. AT&T’s proposal was for $156,574,237.
I asked Meena why ITS is serving as the gatekeeper for government technology procurement. Wouldn’t it be better to let Ole Miss and State procure their own telecommunication services?
“It’s one stop shopping,” he said. “It makes it easier for all the state entities to coordinate centrally with a group that is focused on this all day, every day. ITS lets them combine their buying power so they can get a better deal.”
Or it can make the project so big that only a handful of bidders can compete, thus raising costs. I’m not sure having ITS as the statewide technology gatekeeper makes economic sense. I bet if we let state agencies, libraries and schools procure their telco services independently, we could have thousands of vendors, and not just a handful.
Unfortunately, Meena fears AT&T will file a lawsuit and delay the implementation of fiber to our schools and libraries. That’s too bad, because as more and more textbooks convert to online, speed is critical. In any case, it’s good to see progress and competition, and it couldn’t have happened to a better company. Mississippi, backward in so many ways, is leading the charge of fiber deployment thanks to C-Spire.
“I think we surprised them with our pricing, our capability and our enthusiasm,” Meena said.
So what about high-speed internet for the rural areas? 5G won’t work because of its short transmission distances.
“We are testing and working with a variety of other wireless technologies that we think will have the type of speeds of 5G but can propagate much further.”
It just goes to show that regulated monopolies are not the best model. Since we deregulated telecommunications, there has been a flowering of new technology with faster speeds, better services and lower costs.