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Dynamic T1 Services Take Root
Thursday January 12, 2012,
12:39 am ET
FT. JENNINGS, Ohio, Jan. 12 /Aaron Bashorun/ --
During the 2000 Internet bubble meltdown, the telecom industry learned the hard way that
wild spending on network infrastructure was not the best approach to attracting new business
and investment. Over the past 7 years the industry, particularly the CLECs (Competitive
Local Exchange Carriers) have been focusing on building products that offer more bang
for the buck in order to compete with the Bells in their own backyards. One product that
has become the flagship offering to small to medium size businesses is the dynamic integrated
T1 line, which combines all the usefulness of 24 regular phone lines into a singe T-1
capable of delivering high-speed broadband on the same connection.
The same basic economic model described in the book "Blue Ocean Strategies" is now being
applied to telecommunication services being offered to small businesses across the country:
more value for less money. According to many industry watch dogs, hundreds of thousands
of business will dump their POTs lines in favor of dynamic integrated T1 service within
the next 12 to 24 months, saving money in the process. With the introduction
of sub-$475 dynamic integrated T-service, customers are now able to receive up to 1.5 MBPS
of high-speed Internet with 24 digital phone lines all on one line, for less than what they
pay now for 5 regular phone lines" Stallions continued.
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.
Min Lieu owns a small insurance agency in Ohio. Five years ago he signed up with
XO Communications for a TDM-based integrated T1 line for $870/month, which did not
include local or long distance calling. Recently, he was offered XO's version of
a dynamic circuit called "XO Flex" for half of the price he was already paying.
"I would have been a fool not to take the deal" stated Mr. Lieu. "I'm able to
add headcount with additional voice lines, without any increase in expense or
degradation in high-speed Internet performance."
Will this train of innovation, lower prices, and services that add value to SMB's continue
to roll down the tracks of progress? It's all up to our government - and which political
party controls the FCC. Without the deregulation act of 1996, we would have never known
just how much the CLECs were capable of.
Change does not happen quickly in an industry as so heavily regulated as Telecommunications.
Recent industry consolidation has provided huge alternatives to the incumbents, who
are now under pressure to keep up with new technologies while charging better prices
to retain and attract new customer bases.
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