Best of the ISP-Lists

Getting a Wireless CLEC Off the Ground

Members of the ISP-CLEC list discuss the most complex of business opportunities: being certified as a legitimate Competitive Local Exchange Carrier (CLEC). It's expensive and time consuming, so when is it worthwhile?

[July 6, 2001]

On the ISP-CLEC list in June, BM queried,

"We are a wireless ISP and we are preparing to start the process of becoming a CLEC. Any advice?"

A number of respondents suggested it's all about building relationships:

[KR advised] "The major hurdle, in my experience, was getting in touch with the right people to help you. Once you get your account reps in line, it gets easier."

[DB agreed] "Every day seems like a struggle to maintain the contacts we built to get this beast off the ground."

FG observed that having a strong legal team is key:

"I'd define a CLEC as a law firm with a switch out back. In some respects it's like an ISP, but in others it's very different. The telephone business has a regulation heritage, as opposed to the free market heritage of commercial ISPs. The only reason CLECs can exist is because regulations require the incumbents to cooperate. But the incumbents are experts at meeting only the letter of the law, most narrowly interpreted. So you must be adept at dealing with regulators, talking their language, and waving a big stick in the form of good lawyers. It's still very fluid, and what you can do varies from state to state; the ILECs try different tricks in different states, and export the ones that work."

BM returned with a follow-up question:

"Which is better: going through one of those companies that will do the work for you for a fee, doing it yourself, or just trying to buy an existing CLEC?"

A number of respondents urged caution, reiterating the need for a good lawyer:

[DB offered] "Buying an existing CLEC isn't terribly useful, since in most cases you're going to have to get certificated anyway or get the certificate transferred, which is about as painful. However, it may have existing interconnection agreements and other arrangements that could be useful to you. Either way, unless you really know what you're doing, you'd be well advised to consult an attorney who knows what he or she is doing in this area, and a consultant who does as well."

[KT added] "Before you 'buy' another CLEC and try to transfer the license, you should check and see if it's really worth the trouble. It may end up costing you more and taking more time than starting from scratch. In most states, 'buying' a CLEC license only makes sense if you actually get a loyal customer base along with it."

[FG noted] "You do need a lawyer who specializes in these things, but you don't necessarily need a lot of their time just to get certificated. The tough part is fielding everything the ILECs throw at you, and figuring out what you should be paying for. The law might actually be on your side, but adjudication takes years, so you need to keep the regulators happy in real time: they can be your allies in fighting the ILECs."

—End

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