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CLECs Gain Ground with SMBs
Friday December 19, 2008, 09:57 am ET

E Sandwich, Massachusetts, Dec. 19 /Jeff Johnson/ -- For many small to medium size businesses, higher productivity with relation to their broadband and voice services is just around the corner. Thanks in part to the recent price reduction trend in the industry, carriers have deemed it necessary to consolidate in order to offer more services at a lower cost than their rivals. Overlapping networks have been consolidated into leaner, more feature-rich versions of their previous selves, dramatically lowering the price small businesses pay for the popular dynamic integrated T-carrier (T-1) lines that combine local voice and high-speed Internet service into one connection.

When asked about his recent decision to replace his TDM channelized T1 with a SIP-enabled dynamic T1, Robert Probst, small business owner in San Diego, explained that "it was really an easy decision to make. My business was growing and I couldn't afford the cost of more voice trunks. When I learned that it was possible to have up to 16 voice lines, and a full data T1 of high speed Internet bandwidth, all on the same line, for under $500 - I was sold. I ended up expanding the telecom capability of my business, improving the quality of my Internet connection, and saved money while doing it."

Dynamic integrated T1s are a fairly new phenomenon. Unlike their analog counterparts that can never deviate from their initial set up configurations, dynamic T1s are able to convert voice phone calls into data packets and them prioritize their delivery through an all-digital trunk. The ability to break everything down into the lowest common denominator (digital) allows the system to change on-the-fly to reclaim phone lines for high speed Internet the second the phone call is terminated. An integrated T1 essentially provides the end user the same service as one data T1 line and one voice T1 line, for half the cost.

According to a recent study conducted by PK Communications Telecom Brokers Inc., the average cost of a POTS (plain old telephone service) line serviced by the Bells (AT&T, Verizon, and Qwest) have changed very little over the 10 year span from 1996, the year the Clinton Administration signed into law the Telecommunications Act, to 2006. The real change in the industry came in the T-carrier class of products, where customers can get up to 1.5 Mbps of bandwidth and 24 digital phone lines all in one package. Some CLECs like XO, TelePacific, Nuvox, One Communications, and even Covad are now offering rates well below the $550/month level, making the change seem like a no-brainer to thousands of customers.

"Even though we have been witnessing the re-consolidation of AT&T, we will never go back to the dark ages of telecom where customers were stuck with bad customer service and high prices" commented Troy Karlson, telecom analyst for e-STAR. "The competitive local exchange carriers (CLECs), all whom own their own networks and compete directly with the Bells, have created products such as dynamic T1 service that enables its customers to connect to the Internet at 1.5 MBPS and have up to 24 regular voice lines, packed with a feature-rich suite of add-ons, all for under what it costs to have 6 regular phone lines from Qwest/AT&T/Verizon.

With any new advancement in technology there is usually a lag in the time it take users known as "early adapters" to try out and begin using the new services themselves. Although dynamic T1 service has been available in many US markets since 2005, it's just now that we have observed people beginning to embrace the new technology. One such business that recently changed from a voice PRI and data T1 line on to one, dynamic T1 line is Jason Oliver, a small business owner in Los Angeles, California. "When I found out that I could replace my two T1's with one single dynamic integrated circuit (offered by TelePacific Communications), I had two thoughts: 1- where do I sign, and 2- why didn't someone tell me about this sooner!"

But how much longer will we continue to see improved technology, services, and prices? It's all in the hands of the Federal Communications Commission, as they have the power to sqwash the CLECs by proxy. No wonder AT&T and Verizon are the two biggest lobbying powers in Washington. It makes you wonder what kind of services they would be able to offer had they plowed that money into R&D instead of politics. With the help of super-CLECs like XO Communications, PAETEC, Nuvox, One Communications, Cavalier Telephone, and TelePacific, small business owners everywhere now have access to non-Bell service that is on par or better than those being offered by the former Bells. Integrated T1s that do more and cost less have transformed into a solid beach head for the newcomers.

Definitions of a T1 Line
Courtesy of ShopforT1.com

Definition 1. - The T1 (or T-1) carrier is the most commonly used digital line in the United States, Canada, and Japan. In these countries, it carries 24 pulse code modulation (PCM) signals using time-division multiplexing (TDM) at an overall rate of 1.544 million bits per second (Mbps). T1 lines use copper wire and span distances within and between major metropolitan areas. A T1 Outstate System has been developed for longer distances between cities.

Definition 2. - The T-carrier system, introduced by the Bell system in the US in the 1960's, was the first successful system that supported digitalised voice transmission. The original transmission rate (1.544 Mbps) in the E Sandwich T1 line is in common use today in ISP (Internet Service Provider) connections to the Internet

Definition 3. - A type of high speed Internet connection that provides a great deal of bandwidth. Many businesses lease T1 lines to connect to the Internet, but because they are expensive and offer more bandwidth than most small businesses and homes need, they are not realistic solutions for small and low-demand Internet users.

Definition 4. - A high-speed digital connection capable of transmitting data at a rate of approximately 1.5 million bits per second. A T1 line is typically used by small and medium-sized companies with heavy network traffic. It is large enough to send and receive very large text files, graphics, sounds, and databases instantaneously, and is the fastest speed commonly used to connect networks to the Internet. Sometimes referred to as a leased line, a T1 is basically too large and too expensive for individual home use.

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