MCI emphasizes end-to-end: Pricing, service guarantees key for new data networking package

MCI recently introduced a new Sonet service that incorporates its local and long-distance fiber networks to deliver door-to-door broadband connections for businesses.

The new service, called networkMCI Broadband Connections, was devised to set MCI's point-to-point broadband connections offerings apart from those of its competitors. The tariffed service comes with bold service-level guarantees: If a customer's service is down for a minute or more in a month, that month's service is half price, and if the service is out for at least an hour during a month, that month is free.

"We have taken something that has been a specialty service where facilities are available and are making it into a standard, national, tariffed service," said Ray Kang, MCI's broadband marketing director.

The service will allow MCI to offer connections between 35,000 city pairs. MCI will market the service in its 22 local service markets as part of a comprehensive telecommunications service package to businesses that need point-to-point connectivity and the guaranteed reliability MCI is offering.

According to one analyst, the new service gives companies an alternative to negotiating local connections via a Bell company or local exchange carrier and long-distance connections through a separate interexchange carrier. "In the past, you haven't been able to get both from the same carrier," said Mike Smith, senior telecommunications analyst for Probe Research, Cedar Knolls, N.J.

That one-carrier environment should make it easier for companies to ensure that their point-to-point networks stay up, Kang said. "Customers don't have to be plumbers to get different pieces of the network to work together," he said.

Jeff Kagan, president of Atlanta-based Kagan Telecom Associates, said MCI's ability to supply the entire network should attract companies looking to simplify their network operations.

Companies "don't have to deal with finger-pointing" among multiple network providers when problems arise, Kagan said. "It's peace of mind for network managers."

Perhaps the most attractive aspect of the new service is the service guarantees. While it's not likely that service would be interrupted for as much as an hour during a given month, the fact that MCI markets the service level, the price and how it will compensate for outages is unique, according to Dan Taylor, senior analyst with Aberdeen Group, Boston.

"Telcos have been notorious about playing shell games with actual service," Taylor said. "It's very hard to pin down price and service guarantees." Such guarantees, however, are becoming more frequent among aggressively competitive carriers.

While the MCI guarantee is the same regardless of the city pairs a company pays to connect, some point-to-point routes will cost more than others. "We're making the rate structure city pair-specific," Kang said. "Some city pairs will have higher demand."

Taylor said the straightforward approach to pricing and service-level agreements makes it easier for prospective customers to make purchasing decisions.

"It really reduces the complexity of buying," he said. While the service may be revolutionary in several ways, Probe's Smith said it likely will not be a huge money-maker on its own for MCI.

"This is a very targeted offering for companies requiring ultra high-speed and enhanced reliability," he said. "It's not going to generate a multimillion-dollar revenue stream in the near future."

Still, it may give MCI a foot in the door with customers that are using other companies' telephone services.

At the recent Networld+Interop show in Atlanta, Stephen Von Rump, vice president of enterprise services marketing at MCI, admitted that service level agreements a a high-level concern for MCI.

"SLAs will be a major area of focus along all our transport services. They are being driven by wide demand from business customers."