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Momentum Builds for CLECs
Friday May 08, 2009,
11:48 am ET
DIXIE, Alabama, May. 08 /Kiersten Thomas/ --
For many small to medium size businesses, higher productivity with relation to their broadband
and voice services is just around the corner. Thanks in part to the recent price reduction trend
in the industry, carriers have deemed it necessary to consolidate in order to offer more services
at a lower cost than their rivals. Overlapping networks have been consolidated into leaner, more
feature-rich versions of their previous selves, dramatically lowering the price small businesses
pay for the popular dynamic integrated T-carrier (T-1) lines that combine local voice and
high-speed Internet service into one connection.
The same basic economic model described in the book "Blue Ocean Strategies" is now being
applied to telecommunication services being offered to small businesses across the country:
more value for less money. According to many industry watch dogs, hundreds of thousands
of business will dump their POTs lines in favor of dynamic integrated T1 service within
the next 12 to 24 months, saving money in the process. With the introduction
of sub-$475 dynamic integrated T-service, customers are now able to receive up to 1.5 MBPS
of high-speed Internet with 24 digital phone lines all on one line, for less than what they
pay now for 5 regular phone lines" Stallions continued.
"For years I've played tug-o-war with the phone company who provided voice and data
service to my toy manufacturing company" commented Troy Bergfeld of Houston Texas.
"They kept trying to sell me services I didn't need, it took them months to finally
send me a correct bill, and I wasn't able to recapture bandwidth from my T1 line
when nobody was using the phone. Now that has all changed - my Telarus product
specialist recommending I give XO Communications a try. Now I use their FLEX T1
product and I pay less and get exactly what I want. I have even add another T1
seamlessly when the time comes for my business to expand."
The irony of the new small business communications revolution is that it took so long
to gain traction. The whole idea of reclaiming inactive voice channels for data applications
is not new, and was introduced by many CLEC operators over five years ago. So why did
it take so long for SMB's to adopt the technology and make the change? One might argue
that the Internet bubble burst in 2000 shook many people's confidence in telecommunications,
one of the hardest hit industries. With so many telecoms going out of business, or merging
with other small players just to stay solvent, many customers took the "wait and see"
approach before making the decision to entrust their communications with a company not
associated with Ma Bell. Now that economic Darwinism has taken hold, the remaining companies
are attracting new customers who see the benefits of the new technology without the downside
risk of loosing service or not being able to get through to customer service in the pinch.
Evolution has lead to a better, cheaper alternative to TDM services that the Bells were
peddling for decades in a vacuum of competition. Now the industry, lead by the innovation
and great business practices of the CLECs, seems to have turned a corner - leaving the
incumbents playing catchup. Obviously, the main benefactor of all of this competition
is the small to medium size business - a segment of the market that was taken for granted
until today.
The recent progress made by CLECs leaves us thinking in hypotheticals. "What if the
Clinton administration wouldn't have passed the Telecommunications Act of 1996, requiring
RBOCs to lease their lines at reduces rates to the CLECs?" "Will the FCC continue to
enforce this law, or will it be overturned by the powerful AT&T and Verizon lobbyists?"
It is impossible to know either way, but for the time being we can just be grateful
that the industry has evolved to the point were small businesses can actually benefit
from telecommunications at an affordable rate.
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