ISPCON speakers: ISPs need backup plans

BALTIMORE (Telephony)--As might be expected, the saga surrounding bankrupt NorthPoint Communications’ abrupt decision to pull the plug on its network--leaving about 100,000 DSL subscribers without service--has dominated conversations at this week’s ISPCON Spring 2001.

It also has ISPs thinking about what they would do if their last-mile carrier suddenly goes out of business. According to Dave Baker, vice president, law and public policy for Earthlink, ISPs better get a backup plan in place, if they don’t have one already.

“Customers don’t care what the problem is, they just want their service restored,” he said. “If you’re relying on CLECs, you better have a backup plan, so you’re not scrambling the morning after one of them files for Chapter 11. Rhythms is right on the edge, and Covad, while still operational, doesn’t have unlimited cash. In a year’s time, we may be looking to the incumbents for the provisioning of DSL lines.”

Dan Gonzalez, vice president, external and regulatory affairs for XO Communications, has first-hand experience in this area, as XO found itself in the lurch when NorthPoint went dark, and was one of the ISPs that asked the California public utility commission to force NorthPoint to keep going for 30 days.

“Market turbulence has the potential to affect more than just NorthPoint. It may affect even larger DSL providers,” he said.

While many CLECs are teetering to the point where the ISP community is more than a bit nervous, the devil you know is better than the devil you don’t, suggested Baker.

“The DSL provisioning process is still dependent on the incumbents,” he explained. “You’re relying on them for things like having enough DSLAMs in the central office and having the right billing systems. Often, these things are not up to snuff.”

The reason, is that the incumbents have no real incentive to act in a responsible fashion, Gonzalez said.

“Why aren’t more ILECs doing DSL? It’s because they don’t want to migrate off the DS1 and T1 lines that they’re selling at costs that are extremely inflated,” he explained. “The ILECs are also pricing their services way beyond cost. If we’re going to accelerate the provisioning of DSL, pressure has to be put on the incumbents.”

Gonzalez further suggested that increased pressure has to be coupled with tougher sanctions if the effort is to be successful. He points to Verizon, which Gonzalez claims has become the fourth-largest IXC in the U.S. since being granted permission to provide long-distance service in New York.

“Fines mean nothing to a company like that,” he said. “It’s a cost of doing business for them. Is it worth it to pay a $5 million fine to gain a third of the IXC market? I would argue it is.”