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Becoming a CLEC?
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?"
https://clec.sbc.com/clec/
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.
It depends how serious your ISP is about continuing down the CLEC path; you might consider buying a professional report. (or consider using google.
Yawn.
A good researcher uses all of his resources. I don't see why it's somehow <b>bad</b> to use the experience of other Slashdotters when you undertake something big. Maybe some of the input is valuable.
Anyway, what does it matter do you? Go to your preferences and get rid of Ask Slashdot and you'll never see it again.
You might start here, assuming you'd be working w/ SBC: CLEC Handbook
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Over $500k to become operational.
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.
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You waited until there was already established competition to do this? Why didn't you do this when the DSL market was unfulfilled?
I don't believe you need to be a CLEC. My friend's ISP offers DSL service. There are two parts to the DSL service, the line itself (provided by the LEC), and the internet connectivity for it (provided by the LEC or a 3rd party).
Qwest provides the lines in this area, and by law, when you sign up for one, they have to tell you all of the 3rd parties that offer internet service over it. Any ISP that wants to provide internet connectivity for Qwest lines simply pays for a Qwest WAN circuit to their ISP (T-1 or larger). The CPE's have an ATM PVC which terminates at the particular ISP they signed up to be with. I think Qwest calls this a Megapop or Megacentral line.
In any case, it's not expensive. One can support about 200 DSL customers off a single T-1 because not everyone is using it at the same time. This sounds like a lot, but I've seen it done and the line is very rarely saturated.
So, unless you want to actually provide the physical line too, there's no reason to become a CLEC.
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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.
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.
Do something different. For example, follow the lead of Hometown Wireless 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.
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From what I've seen, big phone companies don't like competition. A local phone company here (similar to your situation) spent six months in litigation against SBC to make it resell lines as required by law. Not only did it have to expended resources in pointless litigation, it effectively lost six months of revenue. They survived and are the best telco in my area.
Read the slashdot story about the recent SBC strike 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.
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.
The market is changing fairly dramatically with respect to the last mile connectivity and services.
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 more modern customers to a DSL solution, you may be surprised at how many would be willing to keep your service for the right price (less than $10/mo).
While I can't give information related to becoming a CLEC, I can tell you that DSL is an interum solution on the train to fiber. The decision has been made - fiber to the home is coming, with wireless challenging it for remote areas. While I work on DSL equipment, we know that fiber will be the preferred solution within the next 3 years for cities (if they don't already have it), 7-10 for more rural locations. It's cheaper to run wireless in the short term, but the bandwidth advantages of fiber and subscription services that it brings outweigh the costs. With that said, investing lots of money without getting the fiber or wireless benefit may end up costing you more than you'll get (bad ROI).
Personally, I would consider diversifying your offerings. Talk to Vonage about being a local PSTN call termination center for them; get a SIP Server and softswitch of your own and begin handing VoIP PSTN traffic (you have a data head end), etc. If you were somewhat enterprising, you could actually sell VoIP numbers to local businesses, handle their PSTN/VoIP calls, provide ENUM services, etc. IE: use your equipment for other things in addition to simple dialup internet access.
Good luck.
ILECs routinely have lapses (i'm tellin' all yall it's sabotage!) in service quality with CLEC customers. "Paperwork errors" are standard procedure. I'm not saying don't do it, but know what you're dealing with.
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