GSA invites crossover in telecom

The General Services Administration opened one of its Metropolitan Area Acquisition contracts to additional service providers last week, a first step toward increasing competition in local telecommunications markets, GSA Federal Technology Service Commissioner Sandra Bates said Tuesday.

Under GSA's FTS Metropolitan Area Acquisition program, which is managed by FTS, contractors were chosen to provide service in 19 cities across the country. After a year, GSA invites additional contractors who already hold MAA contracts to compete for business in other cities. Those crossovers, in the local service provision and eventually in the long-distance provision, will start in New York City, Chicago and San Francisco.

Late last week, GSA awarded the first crossover contract to Verizon Federal for New York City. AT&T already holds an MAA contract for New York City.

Additional crossover contracts for the other two cities are expected in the next few months, Bates said.

Other vendors said they are looking forward to re-entering markets that they used to dominate, just as Verizon has re-entered New York.

For instance, SBC Communications Inc. has won MAA pacts in Los Angeles, Cleveland, St. Louis, Indianapolis, Dallas/Fort Worth and Boston, but Chicago and San Francisco were in the company's original territory, said Jim Grelle, global sales director for SBC Federal Solutions. SBC plans to compete for those areas, he said.

"The 12-month waiting period is forcing me to go back, re-evaluate my cost structure and pricing," Grelle said.

The tightening of the economy could make the crossover competition more effective, he said.

"If a competitor offers lower prices, they'll go," he said.

But Jim Payne, senior vice president of Qwest Government Systems Division, said prices are being driven to "uneconomic values." If prices go too low, the telecom providers will start driving themselves out of business, he said.