For several years, CLECs (Competitive Local Exchange Carriers) have offered integrated solutions to businesses that required T1 speeds or greater over copper, which has been slowly chipping away at the ILEC’s (Incumbent Local Exchange Carrier) market share, but not enough for them to seriously take note. Because CLECs typically least the ‘last mile’ from the ILEC, it is a no lose scenario for them. Where the ILECs are feeling the pinch is from cable companies.
Recent technological advances have enabled some cable companies to be serious competitors. Since 2010, Comcast and Time Warner have been offering more bandwidth while undercutting even the most competitive pricing, and, often, over fiber. Historically ILECS have been slow to respond to encroaching competition, even though they may be fully aware they are losing market share in droves. ILECs have to run the legal and corporate gauntlet before rolling out their own more competitive pricing, so it can often take years before business owners see AT&T or Verizon’s answer to Cable’s initial attack.
AT&T’s flagship product for mid-market customers, IP Flex Reach (Business VoIP over copper), has been their answer to the integrated T1 service used by the CLECs, but Comcast’s internet speeds were still byte for byte considerably less expensive. So what weapon did AT&T choose to fend off the likes of Comcast? Fiber Broadband Bundle (10Mbps Ethernet). But what does 10Mbps Ethernet really do?
Most Internet speed testing sites are designed to offer speed confirmation for medium speed Cable and low speed DSL, not Ethernet. Once Ethernet subscribers find a site that can accurately track their speed, they often find that their guaranteed 10Mbps speed applies to the upload and are delighted to receive as much as 100Mbps download speed with the 10Mbps product. This has also been quietly confirmed by AT&T technicians in the field.
But internet speed is only half of the battle. What would AT&T do about the cost of the voice access and the associated traffic? Each access path over AT&T’s 10Mbps Ethernet service was $30.10 on their best day, and, even though access paths came with unlimited local calling and 300 minutes of long distance, the service was only cost effective up to 14 lines compared to AT&T’s own comparable ISDN PRI promotional pricing.
Effective immediately, for qualifying customers, AT&T is offering 10Mbps Ethernet access with the equivalent of a full PRI for one bundled price. That equates to 10Mbps internet, 23 Voice Channels, 6900 minutes of domestic outbound LD and unlimited local calling for only a slight premium over Comcast’s comparable offer which is between $700 – $900 a month. This promotion is aimed directly at Comcast. The predetermined areas that qualify for the AT&T10Mbps competitive offer are published using CLLI (Common Language Location Identifier) Codes. Not all codes that fall within the Comcast footprint are included.
For business customers in AT&T approved areas, the coast is clear whether they choose to stay where they are or leave. Businesses must, however, determine any termination liability from their current carrier, even when moving from AT&T to AT&T. The rule of thumb when moving from an AT&T contracted service to AT&T’s10Mbps Ethernet bundle is for the installation of the replacement service to fall within four months of the expiring service’s contract termination date. Because Fiber requires substantial engineering, typical installation timeframe for the 10Mbps Ethernet bundle can normally be three months and as long as four. It is common to submit orders for the AT&T replacement service between seven and eight months prior to the current contract’s expiration date. If a business is considering moving to Comcast from AT&T or vice versa, they will have to wait until within three to four months of the existing contract expiration date to submit their order to avoid an early termination penalty.
Installation issues are similar for both AT&T and Comcast. An equipment vendor will be required on site for these installations. For AT&T’s Ethernet service, because the transport method is fiber, they may insist that a 2-inch conduit with pull string be installed by an electrician at the customer’s expense if no adequate protection for the fiber is already available. New Comcast customers may also incur installation charges due to fiber build outs that exceed Comcast’s allotted installation budget. These installation fees will be unique to each customer and should be addressed at point of sale.
One of the most common questions asked is will the IP addresses change when technologies are being upgraded. If AT&T currently provides the IP addresses, or, if AT&T internet is being used now, and there’s a good chance that it is, AT&T can simply transfer the existing addresses. If, however, you convert from AT&T to Comcast or vice versa, the IP addresses will change and have to be reconfigured at the customer’s expense.
As these products are unregulated, pricing is at the discretion of the carrier, so being in the midst of a price war clearly has its advantages. It’s too bad the FCC won’t force the local incumbents of the world to offer the same competitive pricing for their products to all of their customers. Until that day, which I can’t imagine we’ll ever see, some businesses will continue to have all the luck while others will continue to get the short end of the stick. Not unlike comparing airfares, big city to big city may be very aggressive, but God forbid your destination be a little out of the way. So much of what we see in the telecommunication industry can be summed up in the unpleasant phrase, “It is what it is.” The good news is, today, it, at least for some, isn’t too bad.