RE: telcos & isp difficulties. Very Informative "old" news article
DianaX
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06/08/98
InternetWeek
Page 174
Copyright 1998 CMP Publications Inc.
Many Internet service providers (ISPs) that rely on local Bell companiesto deliver their services say poor treatment by those companies has hurt their operations, costing them time, money and, ultimately, customers.
Recurrent overbilling and slow delivery of leased lines, dial-up links andother facilities and services top the list of complaints from ISPs.
The relationship between Cybernex Inc., a small ISP in Hackensack,
N.J., and Bell Atlantic Corp., the company which provides local facilities and service to Cybernex, illustrates some of the problems ISPs are facing.
Cybernex's dealings with its Bell company have been particularly stormy. The ISP, which has about 5,000 residential and business subscribers, has been battling Bell Atlantic in court since March of last year, company executives said, after the telephone company cut off service to half of Cybernex's points of presence (POPs) in a billing dispute.
Since Cybernex was founded in 1995, Bell Atlantic has billed the ISP at the wrong rate for its services and failed to issue sufficient credits for the discrepancies, Cybernex says in its lawsuit against the telephone company. Bell Atlantic, which credited Cybernex $1.5 million for the billing errors, says Cybernex still owes $400,000 in unpaid bills.
"We were getting bills for $90,000 that should have been under $1500. And they kept saying, 'Don't worry, pay the bill and we'll credit you,' " said Jonathan Rudolph, the general counsel Cybernex hired last spring.
"We had a quarter of a million dollars in erroneous bills. A start-up ISP
just doesn't have that kind of cash flow."
The Cybernex-Bell Atlantic troubles provide just one example of how the delicate relationship between ISP and telephone company can sour.
Another case in point involves a well-known West Coast ISP that
complained of U S West taking about eight months to deliver T1 (1.544 megabit-per-second) data lines between its POPs and central hub. "We have endless provisioning problems with U S West-mostly for T1 and DS3 pipes," said a director at the ISP, who requested anonymity for bothhimself and his company.
Other ISPs take headaches like billing errors in stride. "Our relationship
with Bell Atlantic is exceptionally good. But I don't ever remember seeing a correct bill," said Bill Southworth, CEO of HarvardNet Inc., an ISP and competitive local exchange carrier (CLEC) based in Cambridge, Mass. But even that, Mr. Southworth said, "generally gets ironed out."
The big picture
And it's not just smaller ISPs that are affected. Even big ones like
Mindspring Enterprises Inc., PSINet Inc. and Uunet Technologies Inc.
have their war stories. Take PSINet , for instance, which has been
waiting more than six months for one unnamed Bell company to get the primary rate interfaces (high-capacity ISDN lines) in place to support one of the cities where PSINet has a POP. With months-long waits for PRIs, "sometimes you lose the business and you definitely lose the revenue," said Charlie Cary, vice president of product management for PSINet ,Herndon, Va.
But while large ISPs like PSINet -which has 30,000 corporate
customers and 400 POPs worldwide-have the resources to handle a
billing error or to absorb the clogged capacity while they await a new PRI order, an incorrectly billed or a late T1 line can be a matter of life and death for little guys like Cybernex. "These things do affect us, but they could put a smaller ISP out of business," PSINet 's Mr. Cary said.
Another problem is competition, pure and simple. Take, for example, US Internet, which like most ISPs requires that its users procure a local connection to its frame relay-based Internet service through their local telephone company. What US Internet didn't bargain for was U S West local-access sales reps intercepting its Internet customers in the process. "What has been happening is that [U S West] says 'why not use us [for Internet service]?' " when US Internet customers call to order their local connection, said Joe Caldwell, vice president of sales and marketing for US Internet, Minneapolis."They were stealing customers [from us] that way."
U S West, for its part, now is putting measures in place to avoid these
conflicts of interest, such as ensuring that a U S West rep cannot mention U S West.net's Internet services with a customer unless the customer explicitly asks. And U S West's dedicated ISP sales group provides a "safe harbor" for ISPs purchasing services from U S West, said Jonathan Gray, ISP marketing manager for U S West. "Our account managers are not selling competing services from U S West, and they don't have a lot of knowledge about what U S West's [Internet] services are," he said.
The problems between some ISPs and local telephone companies began with the dramatic rise in Internet use across the country. Most telephone companies were blindsided by the Internet wave that flooded the circuit-switched telephone network practically overnight. Not only were the telephone companies unprepared for all that traffic, but they were neither staffed nor organized to serve their new ISP customers.
The telephone network, designed for the average three- to five-minute
voice call, often can't accommodate the high volume of data calls, which usually last 30 minutes or more. "You are concentrating all of these long-length calls on a central office switch where an ISP has its modems, and that switch was not designed to handle that kind of traffic," said Joel Effron, senior vice president of sales and marketing for Pac-West Telecom Inc., Stockton, Calif., which provides wide-area service for ISPs that don't have backbones of their own. When ISP modem traffic is at its peak, all trunks on the switch are being used, he said. This often results in busy signals and dropped calls for the ISPs and occasionally in blocked calls for the telephone company.
But phone companies say they can't address the issue in a timely manner, because of inaccurate and insufficient traffic forecasts from ISPs. "Information about forecasts is critical for building our network and knowing how many additional lines we will need six and nine months out," said U S West's Mr. Gray, who noted that U S West is pushing hard to get more accurate traffic forecasts. "ISPs laugh and say 'we don't know' the traffic forecasts. Our switches take a longer time to upgrade than the lead time we get from ISPs."
Aside from the technical problems, there are cultural differences between the telco and Internet worlds. ISPs grew up with informal peering relationships, where ISPs have connected their networks together and exchanged traffic for free-a concept alien to the traditional telco culture.
And industry experts say that Bell companies have a shortage of
technicians with the data-networking expertise needed to support their
ISP customers.
"The Bells don't have enough staff to make sure ISPs get adequate
service," said Bruce Kushnick, president of the New Networks Institute, a New York-based research firm that has studied billing and service complaints against the Bells. Mr. Kushnick said he personally knows of at least a dozen ISPs now involved in or contemplating lawsuits against Bell companies.
Technical and cultural problems have led PSINet and some other ISPs to turn to CLECs for some of their local access. Mindspring Enterprises, for instance, now splits its orders for ISDN PRI services evenly between CLECs and incumbent telephone companies. In the future, PSINet could possibly rely more on CLECs than on Bells, PSINet 's Mr. Cary said. "CLECs give me flexibility in pricing," he said. And in contrast to most Bell companies, CLECs are not limited to a particular region, he pointed out.
Wooing ISPs
But some local telcos, such as U S West, now are aggressively reaching out to ISPs. U S West's Internet provider sales and support
groupconsists of more than 50 people. "In the past two years, we realized that ISPs have different needs," said U S West's Mr. Gray. "They have different networks than small or large business customers."
In an effort to forge closer ties with ISPs, U S West recently convened a summit of sorts in Phoenix with a select group of 10 ISPs, large and
small, from its region to discuss service and competition problems. U S
West now follows up with these ISPs, which include Concentric
Network Inc., NetCom Inc. and US Internet, on a monthly basis for
advice on problems and issues. So far, the response to this initiative from U S West's ISP customers has been good, especially in the
conflict-of-interest area. "U S West is addressing the problems with that," US Internet's Mr. Caldwell said. "It wants to create a partnership-we are a big part of its business. The problem is we are also a competitor."
U S West's outreach program is not without concrete motivation. ISPs
can become major customers for the local telcos, as U S West found in a recent internal study. On average, small businesses place about 1.5 service orders a year, while ISPs place 47 per year, according to U S West.
"Several ISPs place over 100 orders per year," Mr. Gray said. His
organization is trying to provide ISPs with services that better fit their
needs, such as a single dial-in channelized T1 link rather than multiple
phone lines, as well as giving them higher-speed, megabit services, Mr. Gray said.
Bell Atlantic, too, is making a concerted effort to team up with ISPs. Link Hoewing, assistant vice president of issues management for Bell Atlantic, pointed to the telephone company's trial of high-speed data services based on Asymmetric Digital Subscriber Line (ADSL) technology in Northern Virginia as a key example. The trial involves three ISPs, including America Online Inc.
Stranger than fiction?
Although the ISP-telco climate may be improving overall, the nightmare
isn't over for Cybernex. The ISP claims that Bell Atlantic constantly billed it at a Centrex rate of 11 cents per call rather than the actual 9
cents-per-call rate in its service contract. Further, Cybernex claims Bell
Atlantic then took the ISP on a roller-coaster ride of service conversions that cost the ISP tens of thousands of dollars in new equipment. Bell Atlantic officials won't comment on the litigation, except to say that there are two sides to the case and each side will have its day in court.
The case is now moving forward in two parts: The New Jersey Superior Court's Chancery Division is deliberating Cybernex's claims of fraud and breach of contract, and the state's Office of Administrative Law is handling the billing issues.
All in all, it's been a painful, draining fight for Cybernex, which said it is
spending about $80,000 a year on legal expenses and claims it still is
receiving inaccurate bills from Bell Atlantic. The bottom line for the ISP, according to Cybernex attorney Mr. Rudolph, is that its subscriber
growth rate tumbled from 30 percent per month to just 5 percent.
Another ISP in New Jersey, SuperLink Internet Services, also claims to have billing problems with Bell Atlantic. "We were supposed to be billed 11 cents per call for the CustoFlex Forwarding service, but somehow we were billed per minute," said Jeffrey Jiang, vice president of the East Brunswick-based ISP. Per-minute charges just don't mix with Internet services, where Web surfers can be online for hours. "We are experiencing similar billing problems with Bell Atlantic's Centrex ISDN service," he said.
Even Uunet, one of the biggest ISPs of all, has headaches with service provisioning by the telephone companies. "Ordering is not an issue, but provisioning is," said Alan Taffel, vice president of marketing for Uunet, Fairfax, Va. "In some regions, we can get a PRI in a reasonable time of about four to eight weeks or less. In other parts, we can wait a half of a year."
That means saturated dial-up capacity for segments of Uunet's massive network, which has about 500,000 ports and 900 POPs. "We can try to compensate for some of these lead times, but that's not a sustainable strategy," Mr. Taffel said.
It's not just the traditional telcos that are giving ISPs fits. Take US
Internet, which is suing MCI. The suit claims that MCImetro Access
Transmission Services Inc.-MCI Communication Corp.'s local services
unit-closed down most of US Internet's network last October after US
Internet's traffic began choking MCI's own network. "They turned off all of our phone lines because [our network] shut down 50 percent of their network," said Mr. Caldwell of US Internet. US Internet last year
successfully petitioned the Minnesota Public Utilities Commission to
temporarily halt MCImetro's local business expansion in Minneapolis until it completely restored US Internet's network service, Mr. Caldwell said.
US Internet now uses OCI Communications, a CLEC, for its T1 lines,
said Mr. Caldwell, who would not comment further because of the
pending lawsuit against MCI.
One thing on which both ISPs and telephone companies agree is the need to at least try to solve some of the underlying technical issues. "We want to remove the pressure from the switch," Bell Atlantic's Mr. Hoewing said.
U S West's Mr. Gray said that his company already has begun shifting
some of its high-speed data traffic off the telephone network and over to its ATM network, which relieves the traffic jam on the voice network and also provides higher-speed transmission for Internet traffic.
Another possible solution is digital subscriber line (DSL) technology,
namely ADSL, which telephone companies are gradually rolling out
across the country as a replacement for dial-up Internet access. Some of the projected Internet traffic would be eased if ADSL was more widely available, Bell Atlantic's Mr. Hoewing said.
While many in the industry like the idea of ADSL, the local telcos again find themselves between a rock and a hard place. They want to launch ADSL services, but it likely will eat away at their lucrative T1 business as well as their ISDN business, which is just now achieving profitability.
A boon and a bane
These and other conflicting interests make it difficult for local telcos to
cater wholeheartedly to the ISPs, said David Goodtree, director of
telecommunications strategies for Forrester Research Inc., Cambridge,
Mass. "On the one hand, the Internet is a boon for their business, and on the other hand, a bane," Mr. Goodtree said.
Of course there are some telephone companies that not only cater to, but acquire, ISPs. Among them are leading-edge service providers like GTE Corp., which owns BBN Planet, and WorldCom Inc., which owns
Uunet, said Joel Maloff, president of The Maloff Group International Inc., a consultancy in Dexter, Ill. In many cases, the problems between ISPs and phone companies are being hashed out within the context of these mega-mergers, he said.
Kelly Jackson Higgins is a free-lance writer in Stanardsville, Va. |
