Comptel: McLeod adds local wholesale

ORLANDO--McLeodUSA today formally launched wholesale voice services, including both a UNE-P replacement product and Wholesale DLC Service on the TDM side, as well as an IP-based service aimed at Internet service providers and VoIP providers.

The competitive service provider has already been selling wholesale services under the radar, said McLeodUSA Group Vice President John Dumbleton, and has “a few customers and about 100,000-plus lines in operation.”

The basic UNE-P replacement service represents a cost-effective, stable pricing alternative to the commercial agreements with incumbent LECs, which are designed to increase in price over time, he said.

“We are competing on price,” Dumbleton said. “We offer not only price competition but also stability.”

The turnkey offering includes ordering the incumbent loop, plus all switching--McLeod provides daily usage fees via an XML interconnection to the customer’s back office so the retail provider can generate bills. By the end of the year, McLeod will also have a Web-based portal through which customers can order services.

The Wholesale DLC Service provides connections meeting the GR-303 interface standard between a CLEC switch and an integrated digital loop carrier system which McLeod operates in a central office collocation cage, and from there to the incumbent network. For this service, the CLEC orders its own incumbent loop but uses the McLeod network for transport through the Bell network.

As McLeodUSA moves in its strategic direction of focusing on IP-based service, the company has TDM bandwidth available, and hopes to leverage that for the wholesale market, Dumbleton said.

The IP-based services include a DS-1 Aggregation and IP VPN Aggregation Service, aimed at VoIP providers and ISPs. The IP VPN service uses McLeodUSA’s multi-protocol label switched network to provide a T-1 local loop from anywhere in McLeod’s local footprint to a VoIP provider or ISP.

“This opens up our entire footprint,” Dumbleton said, enabling cost-effective service to multiple points in a metro area, without requiring the retail service provider to order and pay for individual loops. “Basically what we have done is leverage our IP VPN product for our wholesale customers.”

Separately, McLeod last week announced a highly successful $120 million round of refinancing that enabled it to reduce interest rates on $82 million of debt, provide cash collateral for some credit letters and raise $24 million in cash for general corporate purposes. The financial road show used to sell the refinancing was so successful, it was cut short, Dumbleton said.

“I think that speaks well for us and for this industry,” he said.