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CLECs Gain Ground with SMBs
Thursday July 02, 2009,
03:40 pm ET
BLUE CROSS GROUP HOSP, Washington DC, Jul. 02 /Chris McMillen/ --
Business broadband, its price, and who can afford it, are changing. Every day an increasing number
of business are finding the new broadband services made available to them by the "new" telecommunications
companies that are emerging from the latest round of mergers and acquisitions. Overlapping networks
are being consolidated into bigger and leaner footprints, lowering the cost of dynamic integrated
digital signal 1 (DS1) service to the price range of about five regular phone lines. Small to medium
size business can now afford services once reserved for the Fortune 1000 companies.
To see how customers are reacting to this new product, we interviewed a series of
small business owners in Washington DC who are currently using the service. One such
individual shared with us his enthusiasm for the enhanced capabilities dynamic
service offers. "When I was first contacted about the dynamic integrated T1,
I was deeply skeptical of what I was hearing. Over the course of my brief
dealings with telephone companies, all I got was less service with more cost.
Now I am happy to say that I am getting more for less, which makes for one
very happy customer."
Dynamic integrated T1s are a fairly new phenomenon. Unlike their analog
counterparts that can never deviate from their initial set up configurations,
dynamic T1s are able to convert voice phone calls into data packets and
them prioritize their delivery through an all-digital trunk. The ability
to break everything down into the lowest common denominator (digital)
allows the system to change on-the-fly to reclaim phone lines for high
speed Internet the second the phone call is terminated. An integrated T1 essentially
provides the end user the same service as one data T1 line and one
voice T1 line, for half the cost.
At $50 to $75 per month, the average small business telephone customer could expect to pay
up to $750 for just 10 regular phone lines, which come with only a standard set of features
such as Voicemail, Caller ID, and Three-way calling. From 2000 to 2005, the cost of a
dynamic integrated T1 line was well over $800, making it an unattractive option from a
pure cost point of view. However, that paradigm has changed with the introduction of
sub-$400/month price plans and features that make the old POTs lines look pre-historic.
Hopefully the CLECs can continue to push the boundaries of innovation and economics.
The only thing that can keep them from the promise land is the gatekeeper of competition:
the Federal Communications Commission, and the huge Bells (AT&T and Verizon - that's you)
who make it a point to spend more money lobbying in Washington DC than Exxon Mobile.
Until deregulation allowed smaller, hungrier telecommunications companies the
ability to compete, the United States was stuck with technologies that were quickly
becoming out of date. Now that the Bells actually have to innovate to keep up with
the smaller CLECs, customer everywhere are reaping the benefits.
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