Best of the ISP-Lists

The Wireless CLEC

Members of the ISP-Wireless list discuss the costs and headaches associated with becoming a Competitive Local Exchange Carrier (CLEC), and whether those costs outweigh the advantage of buying bandwidth wholesale.

[March 3, 2001]

On the ISP-Wireless list in February, RB inquired,

"How many WISPs have CLEC licenses? It seems that this should offer big advantages in that you could get wholesale rates on transport and other services. Any comments?"

A number of respondents just didn't get the point:

[PF asked] "What could the advantages be of a WISP becoming a CLEC? The reason I started doing fixed broadband was to get away from telcos; why would I want to be one? And unless you want unbundled network services, you really don't want to be a CLEC. It's usually cheaper to find a local CLEC and buy services from them at a discount. In my area I've actually colocated with the CLEC. As a result, they pass on the low rates, so I've actually seen all the benefits of a CLEC and lowered my monthly telco bill by several hundred dollars."

[JS agreed] "I have not seen many examples of a small ISP benefiting from CLEC status. The costs involved consume considerable resources; and even though you get the status, actually dealing with an RBOC for anything is enough to drive any normal business person batty."

MS, on the other hand, felt it was definitely worth it:

"Sure, the con is that it costs money to get done. The pro? You now 'own' the copper plant and they have to sell you all the really cool stuff. And in most areas, if you can do the paperwork yourself, it's only about $2,000. You don't have to put in the switches to do this. You just put yourself into the position of being able to order any of the fun toys that they keep for themselves—and you get to pay wholesale for it all instead of retail."

[LN wished] "There is a lot of paperwork involved in becoming a CLEC. Most of us WISPs are just small business people who are not good at—or hate—paperwork. I see an opportunity for someone to organize us, and push our paper through for obtaining status. I do think CLEC status would cut some costs and open a bunch of doors."

AM cautioned that it's a serious decision to make:

"It's more than just paperwork. Believe it or not, ILECs give CLECs almost as hard of a time as they do ISPs. That is, they have constant issues, billing mistakes, and so on, just like we do. I have yet to find a CLEC that doesn't have an attorney on staff to pick and choose what issues they want to go after and what issues can be dismissed.

My fear with CLEC status is that after hiring an attorney and spending perhaps $10-15,000, we would be 'addicted' to our attorney thereafter. There is a lot to consider when becoming a CLEC to save money; not just the license and paperwork, but the staff and the expenses needed to support such an operation.

Are the savings really there? And do I want to change our business model into that of a CLEC? I ask myself that question all the time."

—End

   

Related articles:
	[Mar. 15, 2000]	Serious About Voice? Become a CLEC
	[various]	ISP-Planet's List of ISP Lawyers