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Only the FCC Can Stop CLEC Momentum
Thursday May 14, 2009, 05:29 am ET

Santa Teresa, New Mexico, May. 14 /Zackary Smith/ -- 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.

"I think the telecom industry in general has turned a corner" opined Jerry Gold of Boston, Massachusetts. "They have finally developed products that are understandable by the industry outsider and, thanks to competition, priced these services in a range that most small businesses can afford. For over 20 years I dreaded dealing with 'the phone company'. But now that I've switched over to One Communications, my integrated T1 is doing everything I need it to, for under $450/month. One actually answers their customer service calls and makes me feel like I'm part of their family. It was a long time coming, but I'm finally able to end the fight with the phone company so I can focus on my sports memorabilia store."

New Mexico is a place that we found was a hot spot for small business owners making the move over to dynamic T-1 lines. One business owner that we interviewed gave glowing reviews of his move to TelePacific's "OnePac" dynamic product. Keith Gray explained "I used to have a regular integrated T1 with 10 voice lines and 14 data channels. When no one was using the phone in my office, we were limited to just 896 KB of bandwidth. After searching on the Internet for better options, I found that I could reduce my price from $850/month to $500/month, and at the same time have 14 voice lines and 1.5 mbps of broadband. I didn't take long for me to pull the trigger and make the change."

Min Lieu owns a small insurance agency in New Mexico. Five years ago he signed up with XO Communications for a TDM-based integrated T1 line for $870/month, which did not include local or long distance calling. Recently, he was offered XO's version of a dynamic circuit called "XO Flex" for half of the price he was already paying. "I would have been a fool not to take the deal" stated Mr. Lieu. "I'm able to add headcount with additional voice lines, without any increase in expense or degradation in high-speed Internet performance."

The recent progress made by CLECs leaves us thinking in hypotheticals. "What if the Clinton administration wouldn't have passed the Telecommunications Act of 1996, requiring RBOCs to lease their lines at reduces rates to the CLECs?" "Will the FCC continue to enforce this law, or will it be overturned by the powerful AT&T and Verizon lobbyists?" It is impossible to know either way, but for the time being we can just be grateful that the industry has evolved to the point were small businesses can actually benefit from telecommunications at an affordable rate.

Definitions of a T1 Line
Courtesy of ShopforT1.com

Definition 1. - 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 Santa Teresa T1 line is in common use today in ISP (Internet Service Provider) connections to the Internet

Definition 2. - 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 3. - 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.

Definition 4. - 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.

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