Becoming a CLEC? 42
eric76 asks: "It finally happened. DSL has come to the town where I work in Texas. While most would see that as a plus, the problem is that I work for a small ISP offering dialup and fixed wireless. The $26.95 / month DSL could drive us out of business. So I'm looking at what it takes to become a CLEC (Competitive Local Exchange Carrier). That is, we'd become a local telephone company purchasing telephone service, particularly DSL, at wholesale from the ILEC (SBC) and reselling it at retail prices. Has anyone else gone through this? What did it cost? How long did it take? Is there a minimum size to make it worthwhile?"
Have you considered trying to RTFM? (Score:5, Informative)
And then calling up some of their existing CLECs?
The rules and procedures vary by ILEC, state, and time of day. You need to get information from a local source.
Re:Have you considered trying to RTFM? (Score:5, Informative)
Suggestion 1: Get yourself a copy of Newton's Telecom Dictionary, 20th Edition, and read everything in there about CLEC, CABS, UNEP, Filing ASRs, and How To Read The LERG (for you non-telecom nerds thats
The Local Exchange Routing Guide, a monthly database published by Telcordia).
Suggestion 2: Go to NANPA's website and get your company a CIC code. This is going to be a big paperwork nightmare but you need to do it before you go ANYWHERE with the ILECs.
Suggesiton 3: Go to Telcordia's website and buy yourself a subscription THE LERG database *spooky music*.
Suggestion 4: Find someone who has done it before, and bring him on board as a consultant. Dealing with the PUCs for each state, filing the UNEP paperwork, ordering ASRs with the ILECs (if you thought tax forms were bad, wait until you need to find values for PIU, CLLI, and ACNA), and trying to make heads or tails of LERG data is going to take any intelligent person a very long time to learn from scratch.
Buy research? (Score:3, Informative)
Re:Buy research? (Score:4, Insightful)
Look at it this way. Earthlink DSL == Covad
MSN DSL == Qwest (at least here)
I would take the covad route though. It will mean you will have to setup a redback server to take care of the authentication, but it really saves a lot of headaches.
Re:Buy research? (Score:3, Informative)
Two, no, you don't have to set up a Redback server. You can have Covad provide that for you one one of their existing servers. Essentially, this means that Covad is providing Layer 3 in addition to Layer 2 for you.
Re:Buy research? (Score:2)
Eh... (Score:3, Insightful)
Anyway, what does it matter do you? Go to your preferences and get rid of Ask Slashdot and you'll never see it again.
Re:Is /. a helpline for incompetent businesses...? (Score:2, Interesting)
He did not ask how to do it or what the laws are, he asked for practical experience.
And as far as being of any interest to the rest of us, many of us here are very interested in legal issues especially as they relate to free trade. While the law may provide for CLEC's, it is reasonable to ask if it is practical for the average company to implement.
Re:Is /. a helpline for incompetent businesses...? (Score:2)
Many of the other answers were genuinely helpful and interesting, too.
I'm not a fanatical supporter of Slashdot's editors - their literacy level occasionally borders on farce - but if you don't like a story, just ignore it.
D
References (Score:5, Informative)
first hand experience (Score:5, Informative)
First step: Get a CLEC consultant to help with the ICA.
Second step: Get a lawyer.
Third step: Spend all your money on what the consultant says.
The large portion of the technical end is the switch (most likely a softswitch if you're worried about money) which are around $300k. The rest will be in facilities and personnel.
Good luck. Most of them just go out of business.
Re:first hand experience (Score:2)
I've been an ISP Systems Administrator that has gone through the ICA process with consultants, lawyers, CFOs, etc.
Re:first hand experience (Score:2)
For a long time, the telephone company said that they had no intention of replacing the old switches with new switches unless they were completely destroyed by fire or something.
So it kind of caught us by surprise when they suddenly started advertising DSL the other day.
Re:first hand experience (Score:2)
Get in touch with your state's ISP association and get setup to resell DSL for all the larger Telco's.
You waited until now? (Score:3, Insightful)
Re:You waited until now? (Score:3, Interesting)
He's trying to buy DSL service from the phone company and resell it to end users. Pray tell, how would he be able to do that before the phone company offered DSL in the first place?
That would be a pretty impressive trick.
Re: (Score:3, Informative)
Re:You waited until now? (Score:2)
DSLAM's come in two varieties - Big and Expensive, and Small and Crappy. A good DSLAM is a high cost capitol goods item that takes up a lot of space in a CO (high monthly colo fees) requires a T1 management line for remote troubleshooting and alerts (no, you cannot use a dialup just to call you when it
Re:You waited until now? (Score:1)
Re:You waited until now? (Score:2)
Re:You waited until now? (Score:1)
-- ecks
Comment removed (Score:5, Informative)
Re:don't need to be a CLEC (Score:2)
Now, I know US DSL is a bit slower than Canadian DSL, but 200 users on a single T1, and assuming you oversell it 10:1, you're talking about 77kbit DSL here.
Since you claim your friend's T-1 is very rarely saturated, he must be targetting web-surfing grannies as his customers.
My DSL ISP had an OC3 when
Re:don't need to be a CLEC (Score:2, Interesting)
Perhaps now is not quite the time (Score:3, Informative)
First, the FCC is undergoing quite a bit of change of policy right now in regards to forcing ILEC's to provide access to unbundled products, as well as relaxing the need for artifically deflated pricing on products for those with Interconnections.
Second, lets examine a quick price scheme here. I'm not positive what the prices are like down in SBC land, as I'm over in Qwest land, but for me, a standard xDSL capable loop (UNE, not UNE-P) costs around 23 dollars. So, the loop itself costs almost as much as you will probably need to charge for DSL service. Add bandwidth and administrative costs, and you find why dedicated DSL service isn't all that popular. Well, what about shared-line services you ask? IMO, you might as well resell SBC DSL, as it will be more profitable.
CLEC's are dropping like flies. It's actually quite impressive how many go bankrupt every year.
If you are seriously interested in becoming a CLEC, I'd recommend looking into providing more than just DSL. You would have the ability to offer Voice along with the Data. Some even go so far as to do the triple play packages, Voice Video Data.
Don't Play Their Game - Make a New One! (Score:3, Insightful)
Do something different. For example, follow the lead of Hometown Wireless [hometown-wireless.com] and expand as a wireless ISP. Focus on areas without DSL, cater to customers who don't want home voice service by offering optional VOIP, or who may want a dedicated 54Mbps wireless pipe.
Another example. Focus on the "triple play" of voice, video, and data services. Deploy high speed VDSL gear or ethernet, get your own T1s and your own phone numbers for voice. Use Cisco voice termination equipment over VDSL or ethernet, ang get video feeds from Direct TV.
Someone in another comment said that becomming a CLEC will cost you $500,000. I don't doubt it. There are a lot better and cheaper investment and growth strategies out there for you.
Re:Don't Play Their Game - Make a New One! (Score:1)
You could put the wireless antennas on the same contructions that hold the mobile phone antennas.
This way you rent a space on the mobilephone antenna and only pay for your devices on it. No new infrastructure/contructions needed.
Re:Don't Play Their Game - Make a New One! (Score:2)
It's kind of strange, though. Very few of our wireless customers live out of town. The ones who want the extra speed live in town where DSL is just now available. For every wireless customer we have too far for DSL, we have about 15 within the DSL coverage area.
Re:Don't Play Their Game - Make a New One! (Score:3, Funny)
'Course you'd have to have the bandwidth and the financial cojones to stick it out but it might still be less than $500k...
Re:Don't Play Their Game - Make a New One! (Score:2)
'Course you'd have to have the bandwidth and the financial cojones to stick it out but it might still be less than $500k...
Free wireless to build a user base may not be a bad idea, especially if those people are serving as relays to increase your service footprint [pbs.org].
But waiting until the DSL competition dies out? You realize, of course, that his main competitor will be the
companies don't like competition (Score:3, Informative)
Read the slashdot story about the recent SBC strike [slashdot.org] to hear more stories of SBC shafting CLECs.
Based on the comments in that story, be prepared for a fight to get started and a constant struggle for every dollar you earn. Get a _good_ lawyer.
Go get 'em (Score:2)
Call this flamebait or a troll, but in my personal opinion there's no minimum size -- if you can get something from the phone company at wholesale rather than retail, it's worthwhile, if only to deny them just that little bit more profit. I don't know about SBC, but since every other phone company I've ever delt with has been the same ("we don't care -- we don't have to"), I say screw 'em if you can.
I'm assuming your cable company doesn't offer internet access
Can anyone compete at $27/month ??? (Score:3, Insightful)
Yes, I know the answer is "oversubscription", and maybe you can justify getting a T3 where you'll get some discount, but still it's a tough business. I have a very hard time seeing how the big boys stay in business, much less the small-timers.
Changing market (Score:2, Interesting)
I work for a company building triple play (phone/tv/internet aka voice/video/data) hardware/software for rural ILECs and CLECs using ethernet over ADSL2+ and VoIP. One of the things we're finding is that the takeup rate for more advanced services is surprisingly low. Many people are sticking with their POTS phones until the phone company they've used for 2 decades forces them to switch. While you will lose m
CLECs get the shaft (Score:3, Informative)