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CLECs Gain Ground with SMBs
Friday October 10, 2008, 03:46 pm ET

Black Point, California, Oct. 10 /Dolf Olviederlag/ -- 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.

The adoption of any new telecommunications platform is never instantaneous. Many technologies, like VoIP for example, have been in the works for years without gaining much traction. Enterprises see communications as their life blood. Even though many are becoming aware of newer, cheaper mediums by which they can conduct business, the risk still outweighs the rewards in their minds. Couple the 'if it isn't broken, why fix it?' mind set with the telecom meltdown of the early 2000's and it isn't surprising that widespread adoption of new telecom services has lagged. However, the new technologies of IP-based voice systems are finally starting to gain an audience, and the chorus of satisfied customers continues to grow. As this momentum pushes forward, so does general acceptance of it viability.

To see how customers are reacting to this new product, we interviewed a series of small business owners in California who are currently using the service. One such individual shared with us his enthusiasm for the enhanced capabilities dynamic service offers. "When I was first contacted about the dynamic integrated T1, I was deeply skeptical of what I was hearing. Over the course of my brief dealings with telephone companies, all I got was less service with more cost. Now I am happy to say that I am getting more for less, which makes for one very happy customer."

The question remains, if this new technology is so progressive, why did it take over five years to gain broad appeal to SMB's across the country? One industry analyst from the Telecommunications Research Institute observed that many customers who consume commercial-grade phone service became very untrusting of telecom providers after the Internet bubble burst in 2000 and the MCI bankruptcy proceedings full of allegations of fraud and embezzlement. After all, no customer wants to come to work one day just to find out that their connection to the outside world has been shut down due to financially unstable service providers not being able to run a profitable or ethical business. Now, due to a series of acquisitions and mergers, the "survivors" are offering great products at rates that SMB's can't continue to ignore. The CLEC's and Bells are quickly gaining traction with the very important demographic.

"The marriage of lower price points and feature-rich T-1 services have made it so that customers can now get more bang for less buck" observed Kent Stallions, telecom expert at PK Communications. "The good old days of the Bells charging people $50/month for regular POTs lines without them having another alternative are over. With the advent of sub-$450 dynamic integrated T1 service, businesses are able to get up to 1.5 Mbps of Internet connectivity and 24 phone lines all in one package, for less than what they pay now for 5 regular phone lines" Stallions continued.

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.

Expect innovation to continue on its upward spiral as the CLECs continue to expand their footprints as well as their customer bases. Barring any funny stuff from the FCC, the CLECs will be here to stay. Sorry Ma Bell. Once a forgotten segment of the business telecommunication landscape, small to medium size businesses are finally being serviced with products (like the dynamic integrated T1 line) at prices they can afford. Gone are the days when the Bells can shove TDM services down the collective throats of SMB's at prices that resemble a mortgage rather than a telephone service.

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 Black Point T1 line is in common use today in ISP (Internet Service Provider) connections to the Internet

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. - 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.

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