The alternate approach

Many competitive local exchange carriers (CLECs) are at the mercy of the incumbent local exchange carriers (ILECs) because the ILECs own the last-mile connection from the CO to the customers. ILECs may have technical, labor or management issues that prevent CLECs from providing service for their customers. But CLECs simply can’t serve their customers until ILECs give them access. Using an alternate carrier to bypass the ILEC networks is one answer to the CLECs' problem.

The most valuable application of this concept is a quick turn-up option. This allows a CLEC to begin serving customers regardless of the ILEC’s performance. Simply put, the alternate carrier will bring the lines up and carry the traffic until the ILEC lines are ready. The CLEC can also offer the customer a survivable, alternate route that can carry traffic when the primary line is out of service.

These routes may be permanent connections, in parallel with the ILEC lines, or provisioned as needed due to equipment or line failures. Survivable routes that are provisioned as needed may be supported with dedicated equipment and lines, or devices drawn from a pool maintained by the alternate carrier and surplus bandwidth.

The actual connections and configuration will fit into a limited set of possibilities. As CLECs enter a market with these innovative services, they must first establish connections with the carriers they select to carry short-term traffic, and determine an estimated amount of bandwidth available from each company within the service area. They can then offer the services to customers secure in the knowledge that the alternate carrier need only connect their client to the switch to provide service. At the same time, the CLEC can begin establishing the ILEC connection to the site. When the ILEC connection is up, the CLEC can transfer the traffic.

In areas of rapid growth, where the necessary infrastructure is not available, wireless service is probably the fastest way to bring customers on line.

The CLEC and carrier interconnection will vary, depending on the existing networks and equipment. The CLEC may connect to the alternate carrier directly, from POP to POP, or within the ILEC CO. The number and permanence of connections are important considerations, as every connection is a resource. The choice of carriers also is significant; the CLEC must be sure the carriers can provide service for their target market for the concept to work. More than one alliance may be necessary to reach the entire service area.

TERMINOLOGY CLEC Used to describe any competitive local exchange carrier seeking to provide voice, data or other telecommunications services Alternate carrier Any telecommunications carrier that has the ability to connect a customer site into its network. An existing connection is not necessary; however, bounded media carriers with facilities near a customer site have an advantage over those without lines in the area. Wireless carriers of all types are included. The carrier must be able to meet all the CLEC and customer service requirements including voice and data bandwidth, standards and protocols, but the medium and application specifics are unrestricted. The alternate media carrier may also be a CLEC. ILEC The incumbent local exchange carrier that provides local telephone service End user The CLEC’s client or customer

In areas of rapid growth, where the necessary infrastructure is not available, wireless service is probably the fastest way to bring customers on line. Established metropolitan areas have the infrastructure, but may suffer from complications such as trouble-prone lines, collocation limitations, interconnection difficulties or labor issues that can slow the conventional installation process. A CLEC that can provide service quickly has a significant and distinct advantage over its competitors.

There are benefits and risks for everyone involved.

Speed is King

The greatest benefit of bypassing an ILEC connection with an alternate one is the ability to bring a customer online faster. An alternate or survivable route also allows the customer to recover much more quickly from service interruptions. These are powerful marketing tools and excellent income opportunities for a CLEC.

CLECs that partner with alternate carriers will be less dependent on ILECs.  They’ll pay the alternate carrier for the installation and service.  When the CLEC/ILEC link is up, the alternate link may be disconnected. The CLEC won’t have to pay the ILEC until the line is up, and they should be able to avoid paying pending contract fees or penalty clauses through careful negotiation of their interconnection agreements with the ILEC. ILECs will be forced to become more competitive, and more responsive to the CLECs' needs, because once the alternate carriers are supporting the CLECs, the CLEC may take their traffic off ILEC lines permanently.

Alternate carriers will be able to profit from unused bandwidth, and gain market share as more CLECs and end users subscribe to their services. Service extensions installed to support CLECs can be used to carry future traffic. 

The customers that rely on the CLEC for service will have their lines up much faster and may also choose to configure survivable routes. In an area of rapid growth, the cost of the additional service will be well worth the benefit. Companies lose money every day they operate without adequate telecommunications service.

The Down Side

Most metropolitan areas are well-connected with fiber from several different carriers and CLECs will be able to choose from several carriers. Outside of areas with well-established telecommunications infrastructures, wireless carriers have a distinct advantage. Wireless is extremely flexible and connections can be brought up very quickly. Before service can be offered to a customer, though, a CLEC must be sure a carrier is available to support it.

Assessing the coverage areas may be time consuming, but a CLEC must take the time to find the alternate carriers that serve their target market. Although carriers must register with local public utility commissions, it can be difficult to quickly determine their specific coverage areas. In an area where an ILEC’s installation time is short and reliability is high, alternate carriers may not provide a significant advantage. The CLEC will still be dependent on the ILEC, but to a lesser degree. They will also be dependent upon the alternate carrier. The increased competition could improve the level of service from all carriers. Obviously, the CLEC should route its traffic over the carrier network that provides the best service.

The transition of service from an alternate carrier to the ILEC lines must be carefully coordinated. Verifying each segment of the link independently should speed the process, but a certain level of risk is present in all major configuration changes.

Another important consideration is the customer’s facility. Wireless signals often arrive via a rooftop or window antenna while wireline connections usually enter buildings at street level or below. Connecting the service to the customer’s network inside the building is an important consideration because the cost of installation might be prohibitive for short-term applications. For clients that choose to install survivable routes, the cost of the supporting equipment must be evaluated. If it will be left at the customer site, the survivable service subscription fees will have to cover the purchase price in a timely manner.

The alternate carrier should carefully examine the costs of supporting the CLEC. The revenue obtained will be primarily from installation and configuration changes, not the usual recurring income from long-term service agreements.

Finally, the carrier may also be a CLEC. If a customer is aware of the alternate carrier, they may choose that company as the primary carrier  instead. The level of detail provided to the customer must be considered to protect the CLEC's interests, but it may be better not to divulge the carrier and connections that make the service possible.

The alternate carrier should carefully examine the costs of supporting the CLEC. The revenue obtained will be primarily from installation and configuration changes, not the usual recurring income from long-term service agreements. The alternate carrier can also charge a subscription fee to ensure support for survivable routes. In addition, their excess bandwidth will vary by switch and some of their assets may have to be dedicated to CLEC connections. Properly balancing the assets and bandwidth available to support a CLEC with the anticipated revenue is crucial to the alternate carrier's success.

Customers may be hesitant to accept alternate service because of security concerns, especially when wireless carriers are used. CLECs and carriers must ensure an appropriate level of security in accordance with the needs of each client, and should consider this early in the presentations, so the customer understands their data is safe.

Even with the best of technologies, technicians and management, the potential for difficulties and delays exists. A careful cost/benefit analysis must be performed by all involved parties to ensure that it is beneficial for them and they can tolerate the inherent risks.

The Up Side

Using alternate carriers for last-mile connections reveals several excellent opportunities. Existing carriers will profit by providing short-term support to the CLECs. Carriers entering new markets can build cooperative relationships with CLECs that would allow them to generate income quickly. Finally, with the additional connections and configuration, a CLEC’s network will become more robust and fault-tolerant.

To compete effectively in this environment, ILECs will be forced to be more responsive to customers and CLECs to maintain market share. At the same time, the alternate connections that are carrying traffic will become increasingly attractive as primary routes, rather than simply supplemental links.

Although we have only discussed the use of alternate carriers for short-term, last-mile connections, there are other applications of this concept that include survivable or redundant links, intercity trunking and disaster recovery planning. Each industry will have additional perspectives and insights on the topic. A cooperative exchange of these ideas can foster an exciting new environment for the telecommunications industry.

Clearly, the last mile landscape has changed. Although the incumbent carriers still have the most connections, other carriers are rapidly cabling competing lines that will ultimately create a dense network mesh in many metropolitan areas. These networks will carry the ever-increasing amount of voice and data, and will create an extremely robust and fault tolerant telecommunications infrastructure.

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Betsy A. Gamrat teaches Telecommunications Management and Transmission Systems at a community college and is based in Hudson, NH. She can be reached at bgamrat@wirehopper.com.