DSL disconnect: Wholesalers' customer service falls short

Horror stories about customer service experiences by DSL end users are well-documented. The industry "breakage" rate runs at more than 25%, which means that more than one-fourth of all DSLs ordered are not installed, whether because no service was available in an area, or because of distance limitations, provisioning delays or other myriad reasons, said John Corcoran, Internet and digital new media analyst at CIBC World Markets.

But a new study looks at the problem from a different perspective: the ISPs that typically resell lines provided by DSL wholesale providers such as Covad Communications, NorthPoint Communications and Rhythms NetConnections. The report, "xDSL Market Sizing: Provider Report Card 2000-2006," authored by research firm Atlantic-ACM, surveyed 92 ISPs to gauge customer service by DSL wholesalers across six categories: billing, provisioning, network, operations support systems (OSSs), products and pricing.

All the DSL wholesalers received respectable scores in network quality and network availability (6.2 each out of a possible rating of 10), but in most other categories, service was mediocre, according to Atlantic-ACM. For example, in the areas of responsiveness of customer service and electronic bonding, the average score for all wholesale DSL companies fell below 5 (4.9 each on a scale of 1 to 10).

Rhythms slightly outscored NorthPoint and Covad overall, but the difference was not significant, said Nick Regas, analyst for Atlantic-ACM. Rhythms scored the highest on provisioning, while NorthPoint led the OSS category and Covad ranked highest on products.

One of the prime trouble spots was provisioning, and the failure of DSL providers to meet the expectations of ISPs and end users. "ISPs are not able to give the end user quality provisioning if they have tie-ups with the wholesale providers," Regas said. The tie-ups include anything from lost or misplaced orders to lack of clear communications to problems with the cleanliness of the copper, he said.

The survey sliced provisioning into four factors: internal delivery timing, delivery of promised services, coordination with other carriers and service level agreements. Only one of the wholesale DSL providers received a rating greater than 5 on its coordination with other carriers. This, too, is not surprising, given the contradictory relationship DSL wholesalers have with incumbent carriers.

"Realistically, customer service has been and will continue to be a problem in this space," Corcoran said. "The incumbents' financial incentive is to impede the DSL rollout by other players."

That sentiment is echoed by Dewey Coffman, vice president of sales and marketing for Jump.Net, an ISP with 12,000 DSL links installed in Texas. "Most definitely. I would have to say that DSL [customer service] is the ugliest it's been since 1997," he said.

Prior to SBC Communications' spinoff of its data services arm as part of the Ameritech acquisition, the problems that Jump.Net experienced with partner NorthPoint appeared to be ironed out. Now they have reappeared, Coffman said. End user installations from the time an order is placed take on average 30 days, he said, and a majority of them take 45 days or even 60 days to complete.

Much of the bad service lies at the incumbent carrier's doorstep, Coffman said. Because Jump.Net also deals with SBC directly, it has some inside view of the problems. For example, although NorthPoint uses full electronic transmission of orders, SBC still requires manual entry of data into three or four different databases. Jump.Net may halt the submission of orders to SBC for 30 days until the data services unit catches up on an order backlog amounting to "hundreds of orders."

Occasionally, the relationship between ISPs and incumbent carriers becomes contentious. For example, earlier in the year the Texas Internet Service Providers Association accused SBC's data services technicians of actively pushing and actually installing the RBOC's DSL service when they made a house call to install a line for another DSL provider.

"DSL slamming issues are the very worst problem," Coffman said. And with the data affiliate of SBC, new forms and procedures means it now takes longer - 21 days and a week's downtime at minimum - to get a customer switched back to Jump.Net after SBC's Internet services have been installed, he added.

Even if incumbents can shoulder most of the blame, DSL wholesalers can't afford to dismiss the problems. ISPs don't switch wholesale providers willy-nilly because it would be onerous to migrate existing customers to a different wholesaler. But "ISPs would be more likely to buy their new services from a different provider," said Judy Reed Smith, CEO of Atlantic-ACM.

They also might forgo DSL altogether. "If it's too difficult, the ISPs will move on to other services," Corcoran said. Indeed, the availability of broadband alternatives such as cable may very well "disintermediate" the middlemen in the DSL value chain, he said. In recognition of that, DSL providers such as Covad already are moving to hybrid direct sales models, and as that happens, sensitivity to customer service issues will be even more crucial.