"ISPs into CLECs" By Ken Branson
[[Good article in X-Change Magazine on "The Technological Challenges" associated with transforming the ISP into a bona fide CLEC. Of course, this has a telco industry slant, but what the hey... we're looking for balance, right? Anyhow, that's what will make this work -- a considerable degree of backwards compatibility. The article in its entirety can be viewed at:
x-changemag.com
It is also presented for posterity, below.
Enjoy, and Best Regards, Frank C.]]
================from: X-Change Magazine
ISPs into CLECs
--The Technological Challenges
By Ken Branson
Last month, X-CHANGE published a story about Internet service
providers (ISPs) becoming competitive local exchange carriers (CLECs).
As the article explained, it's a non-trivial task, and not for everyone.
Once an ISP has been certified in the states where it wants to do
business and it has negotiated interconnection agreements with the
incumbent LECs (ILECs), its task has just begun.
There is the little matter of buying what one telecom person calls "the
toys"--the hardware that constitutes the network and the software that
makes it run. For ISPs who came up the entrepreneurial ladder, that can
be a revelation.
David Markowitz, a marketing manager at Ascend Communications Inc.,
represents a company that made its name taking care of those
entrepreneurs when they started out. But Ascend knows the times are
changing.
"We're seeing a lot of folks in the ISP space that want to move forward,"
Markowitz says. "We had a pretty good run in the ISP space. Used to
be any guy living at home could buy our box, put it under the bed, and
he's in business. Now, one of our boxes, say, the Ascend 4048 [router],
is available in the low tens of thousands of dollars."
Ascend became a billion-dollar company on the backs of
nerds-turned-entrepreneurs, but sees its future in the more sophisticated
systems needed by the next generation of ISPs. Ascend will offer a series
of seminars around the country this summer for ISPs wanting to make the
CLEC move.
Doug Hanson, president and CEO of Rocky Mountain Internet Inc.
(RMI), finds himself leading a newly minted, officially certified CLEC in
the state of Colorado. He admits he hasn't focused seriously on the
technical nitty gritty, being as yet knee-deep in the political issues of
negotiating interconnect agreements with neighboring carriers, and
keeping up with RMI's "day job" of providing high-speed Internet
access. And since RMI will be a switchless reseller, Hanson thinks the
technical challenges will be less daunting for his company than they would
be if RMI was to be a facilities-based CLEC. But he sees a higher level
technical issue, and believes he knows the answer to it.
"The bigger issue, as it relates to, say a [Lucent Technologies Inc.] 5ESS,
is: Why would you buy one anyway?" he says. "With the technology
moving to IP (Internet protocol), you wouldn't want to buy a 5ESS
because you'll be able to do everything you could do with a 5ESS over
IP. So the question is: What are people going to do with all those 5ESSs
they've bought?"
The Data Place Inc., an ISP in Newark, Del., has filed for CLEC status
in that state. Its vice president of operations, William Stritzinger, says his
company will start off as a switchless reseller and then "in about a year,
we have to get facilities-based." For now, he doesn't have to answer
Hanson's question about buying switches. But he has no illusions about
the technical challenges and their associated costs that face his company.
Many of those challenges stem from being a telco among telcos.
"From an expertise standpoint, you still have to know the telco jargon,
how to provision lines, how the interconnect agreement and service
agreements will be working, how the back office stuff will work,"
Stritzinger says.
"Physically, if you're just a reseller, having someone who understands
SONET (synchronous optical networking) isn't necessary. It's really an
office thing," he says. "The billing--everybody underestimates it.
Consulting fees were $70,000 to $80,000, and that doesn't include
software and the people who maintain it."
Stritzinger's experience is not unique, according to Jeffrey Kagan,
president of Kagan Telecom Associates, a telecom consulting firm based
in Marietta, Ga.
"[ISPs] have to have the systems and processes that would be needed
[to offer telephone service]," Kagan says. "That means call centers,
customer service operations. It would definitely mean the ability to bill
and provision the service. Offering local service is not easy, as the long
distance companies have discovered. The companies making it [as
CLECs] have had a lot of investment. They have really dedicated
themselves to providing service in many states, and there are economies
of scale involved. You can't justify doing this in just one or two states."
Kagan adds it might be easier to buy a small CLEC than to become one.
All the technical grunt work already would have been done.
Bill Plunkett, vice president of CLEC marketing at Lucent Technologies
Inc., points out that the 5ESS is designed for flexibility, and that the
newer versions--the 5ESS 2000, for instance--are made for smaller
telcos. His company also makes an Internet telephony server, and he
sees nothing wrong with Hanson's reliance on IP as the way to go. After
all, Qwest Communications International Inc., GST Telecommuni-cations
Inc. and Concentric Network Corp. have gone that way.
But Plunkett sees the technological challenge for ISPs on the software
side.
"Other technological barriers are billing and customer service systems,"
he says. "This is much different from flat-rate billing; it's measured. Even
classical CLECs get tripped up on those things. They have trouble billing
and taking care of their customers. By the end of the year, though, there
should be some very good systems available." |
