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Integrated T1 Progress Report
Monday April 21, 2008,
02:23 am ET
JOHNSON COUNTY, Wyoming, Apr. 21 /David Onaindia/ --
During the 2000 Internet bubble meltdown, the telecom industry learned the hard way that
wild spending on network infrastructure was not the best approach to attracting new business
and investment. Over the past 7 years the industry, particularly the CLECs (Competitive
Local Exchange Carriers) have been focusing on building products that offer more bang
for the buck in order to compete with the Bells in their own backyards. One product that
has become the flagship offering to small to medium size businesses is the dynamic integrated
T1 line, which combines all the usefulness of 24 regular phone lines into a singe T-1
capable of delivering high-speed broadband on the same connection.
Min Lieu owns a small insurance agency in Wyoming. Five years ago he signed up with
XO Communications for a TDM-based integrated T1 line for $870/month, which did not
include local or long distance calling. Recently, he was offered XO's version of
a dynamic circuit called "XO Flex" for half of the price he was already paying.
"I would have been a fool not to take the deal" stated Mr. Lieu. "I'm able to
add headcount with additional voice lines, without any increase in expense or
degradation in high-speed Internet performance."
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.
"True convergence means that I can finally have just one phone company, without being
at the mercy of Ma Bell" added Steven Lankto of Jersey City. "Having a data pipe that
is intelligent enough to know when it needs to become a voice pipe, without any input
from me, is genius. I'm glad that the technology is here and in the price range
of businesses like mine." Mr. Lankto isn't alone; there is now widespread acceptance
of integrated voice and data service in the New York metro area and across most
larger U.S. cities.
Expect innovation to continue on its upward spiral as the CLECs continue to expand
their footprints as well as their customer bases. Barring any funny stuff from the FCC,
the CLECs will be here to stay. Sorry Ma Bell.
Change does not happen quickly in an industry as so heavily regulated as Telecommunications.
Recent industry consolidation has provided huge alternatives to the incumbents, who
are now under pressure to keep up with new technologies while charging better prices
to retain and attract new customer bases.
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