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Only the FCC Can Stop CLEC MomentumTuesday July 08,2008, 10:02 am ET
LOURDES, Iowa, Jul. 08 /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.
At $50 to $75 per month, the average small business telephone customer could expect to pay
up to $750 for just 10 regular phone lines, which come with only a standard set of features
such as Voicemail, Caller ID, and Three-way calling. From 2000 to 2005, the cost of a
dynamic integrated T1 line was well over $800, making it an unattractive option from a
pure cost point of view. However, that paradigm has changed with the introduction of
sub-$400/month price plans and features that make the old POTs lines look pre-historic.
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.
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.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.
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