Executioner's song

Depending on the type of competition, a winner is either the one with the most points when the clock runs out, the first one across the finish line or the last one left standing at the end of the match. Competition in the telecommunications space mostly resembles the latter, except that there is no end to the match. You can win the battles, but you never win the war. The war never ends.

So how does a successful communications provider play the game?

"It is something that is simple to say, easy to understand, as common sense an idea that exists. It's the ability to execute," says Robert Taylor, president and CEO of Focal Communications.

Sounds easy. But even Taylor admits it's not.

"Common sense takes a tremendous amount of effort to get right," Taylor says. "And execution is hard."

The ability to execute its own vision and not that of its vendors, suppliers or competitors has positioned Focal among the industry leaders most prepared to survive the service provider shakeout that is sure to come in the next few years as belts tighten and businesses fail.

"It is in these periods of controversy and downturn when the next generation of carriers and leaders emerge," Taylor says. "We will lead by showing large corporate customers that there is not just an alternative to the [RBOCs] but a better alternative."

In Focal's eye, a better alternative is one that excels at providing what it sees as the three top corporate customer priorities: redundancy, diversity and customer service.

Focal began operation in 1996 with a time division multiplexing-based Northern Telecom DMS switch, but it now ensures redundancy and diversity for its customers with a network that boasts five distinct switching platforms: circuit-switched, ATM, Ethernet, IP and softswitch.

"That allows us to go after the customer's business in whatever way the customer is buying their service," Taylor says.

Yet customer service has always been Focal's top priority, and it plans to go home with the one that brought it to the dance. "After four-and-a-half years of business, we have virtually zero customer churn," Taylor says. "We will continue to deliver excellent customer service, and we will set the bar for how well competitive carriers can compete not just against the RBOCs but against IXCs as well."

Taylor points to his company's back office as its most strategic asset. "There is no difference in the technology that we buy from what SBC buys or XO or WorldCom. It's how we operate it and, ultimately, the back office we put around it," he says.

Focal followed the path less traveled as it built many of its own back-office support systems. Taylor claims this gives Focal a distinct advantage in "offering the products and services we do, in the fashion we can, with a quality of service no one else has been able to manage."

To build those systems well and maintain a relatively low EBITDA, Focal had to attract a management team with the necessary background. That the company has done that and has retained them is a significant accomplishment and advantage. With an employee churn rate nearly as low as its customer churn rate, Focal can provide a level of consistency that has been sorely lacking in its competitors through recent battles.