T1 Internet Service Prices and Rates Quotes in Calypso

CLECs Gain Ground with SMBs

Friday June 12, 2009, 03:20 pm ET

DRAPER, Utah, Jun. 12 /Patrick Oborn/ -- Is there a resurgence in the popularity of telecommunications providers that compares with the late 1990's? The answer may surprise you. Since the crash of the Internet bubble, struggling telecoms have seen Darwin in action as many companies were forced with the choice of bankruptcy or forced consolidation. However, some companies chose the road less traveled: innovation. By offering customers more for less, many small to medium size business customers are finding that they can upgrade to integrated T1 service for the same cost of five regular phone lines.

"For years I've played tug-o-war with the phone company who provided voice and data service to my toy manufacturing company" commented Troy Bergfeld of Houston Texas. "They kept trying to sell me services I didn't need, it took them months to finally send me a correct bill, and I wasn't able to recapture bandwidth from my T1 line when nobody was using the phone. Now that has all changed - my Telarus product specialist recommending I give XO Communications a try. Now I use their FLEX T1 product and I pay less and get exactly what I want. I have even add another T1 seamlessly when the time comes for my business to expand."

"The average cost of a business phone line from the Local Bell Operating Company (ILEC) has remained constant for the past ten years" noted Edwin Jones, a senior market analyst and telecom industry expert. "At the same time the prices of T-1 lines have declined from near $1000 per month to a staggering $350. Keeping in mind that a T1 connection is the equivalent of 24 regular phone lines all bundled into one, it comes as no surprise that demand for these services in on the rise."

From 1997 to 2007, the average cost of a POTS (plain old telephone service) line from the Bells has hovered in the $50 - $80 per month price range. During this same time period, integrated DS1 (digital signal 1) lines - which is the equivalent of 24 standard lines - have come down in price from $1000 per month to $400. Small to medium size businesses who have more than 5 phone lines can now actually save money by upgrading their service.

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. 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.