A Buyer’s Scoop on Telecom Minneapolis MN

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Every business in the world either uses or could benefit from using phone service. Even if your business deals directly with the public, you still need to call your manufacturer for updates on shipments, check on the ads you have going out, and make sure your accountant has all of your financial information. As your business grows, so does your need for phone lines, not just to enable you to speak to your customers and suppliers, but also to transmit data between offices, and possibly even maintain a Web site to receive and track orders. Growth in business is great, but you may easily find yourself overwhelmed by the logistics involved in all the changes. The phone system you had 2 years ago may have been perfect for you at the time, but today you have 20 new employees in house, 5 new outside sales reps, and the Web site for Internet orders is being released next week. If that is the case, you have probably outgrown your old telephone system. The important thing to know is how to gauge the technology you have, where you are going, and what technology you need to get there. In this chapter, I help you figure out what you’re dealing with and get you started on your quest to improve your telecommunication, or telecom system.

Assessing Your Telecom Services As They Are Now
At the most basic level, telecom refers to any service that is provided over phone lines. Included in this definition are

Internet connections over dedicated circuits or dial-up modems

Regular phone lines used to place and receive calls to your mom

High-speed data links used for transmitting information When you boil things down, all phone service can be reduced to the same basic principles of transmitting and receiving signals over fiberoptic or copper wire. For example, if a backhoe cuts through a fiberoptic cable that supplies your Internet connection, along with the service from your local carrier, your only connection to the outside world becomes your mobile phone. If your mobile phone provider also uses that link to complete calls, you still may not have a connection to the outside world. With the increase in redundancy being built into the local and long-distance networks, you shouldn’t have an outage that completely shuts down your service. If you have a good telecom system, when (not if) a breakdown in the network occurs, stopping calls from passing through the east side of town, your system can automatically route calls to an alternative network on the west side. Many companies rely heavily upon their phone service, and any outage, no matter how small, has a large impact. Sometimes the problem is an act of God, (say your carrier’s switch is struck by a bolt of lightening, reducing it to a smoldering brick of silicon and steel valuable only as a piece of modern art). Other issues may be the result of bottlenecks in your own phone system, or just a need for more phone lines. The first step to taking care of these issues is to assess the phone service you need right now.

Identifying Your Carriers
A telecom carrier is an entity that provides and bills for phone service. It would be convenient if I could classify a carrier based on the fact that it owns a large fiberoptic network and multimillion-dollar phone switches, but not all of them do. Some carriers own no hardware and simply contract with other companies that have sophisticated hardware networks. Actually, all carriers have contracts with other carriers to sublet space on their networks. Subletting enables them to build more redundancy into their systems (which is good thing for customers). In some areas, subcontracting also helps carriers get substantial price breaks when they try to negotiate new contracts to gain entrance into a specific market. In fact, the best way to understand carriers is based on their functions. Carriers treat local networks, long-distance networks, mobile networks, and more.

Looking locally
Local carriers provide local service. If you call from your office to the building next door, your local carrier receives the call and completes it to the other building. In addition to providing local calling services, local carriers also provide you with dial tone on your residential or simple business phone lines, assign your phone number, provide 911 (emergency service), 411 (information), toll-free service and a host of other features like call waiting, caller ID, and sometimes even voicemail. One of the most important functions of the local carrier is to identify every call you make as being local, long distance, or toll free, and then to route it to the appropriate carrier to complete. The industry refers to local carriers primarily as local exchange carriers (LECs). When you think of LECs, names like Bell Atlantic, Bell South, Ameritech, or Verizon come to mind. These are all companies that were lucky enough to be given the limited monopoly to provide local service to a specific geographic area. America was carved up based on local population statistics and state borders when the Ma Bell monopoly got broken up in the 1980s. LECs are also known by other names. The LECs that were part of the initial monopolies given by the U.S. government and generally have the word Bell in their names are sometimes grouped as RBOCs (pronounced ahrr-boks). An RBOC is a Regional Bell Operating Company. At times, RBOCs are also referred to as ILECs (pronounced eye-leks). The ILEC designation identifies a carrier as being the senior LEC in the area, specifically, the incumbent local exchange carrier. Throughout this book, I avoid using too much jargon by simply referring to the carrier that supplies your local telecom service as your local carrier.

Introducing competing local exchange carriers
A comvpeting local exchange carrier (CLEC) does the same work as other local carriers. The special name simply signifies that these carriers arrived on the scene later than the baby Bells referred to in the previous section, “Looking locally.” Any company that can assign you a phone number, but was not given the monopoly for the area by the government, is technically a CLEC. This category includes wireless providers, VoIP (Voice over IP) providers, and the true CLECs whose sole goal, in the spirit of free-market economics, is to compete with (and eventually replace) the Verizons and Ameritechs of America.

Going for long distance
Long-distance carriers receive and complete calls that terminate outside of the U.S., across a state border, or across a geographically defined border within the state called a LATA (Local Access Transport Area). Long-distance functions were specifically denied to the local carriers during deregulation and spawned the growth of the long-distance industry. You can break long-distance carriers into two categories:

Facilities-based long-distance carriers: The first companies that come to mind when you think of long-distance carriers are AT&T, Sprint, and MCI. These are companies that own huge telecom networks, million-dollar telephony routing switches, and enough cabling to tie us to the moon ten times. All the equipment and stuff — the hardware and cabling — that these companies own establish these carriers as facilities-based providers. Generally, only large companies worth hundreds of millions of dollars fall into this category, but ever since the long-distance industry was born, the number of facilities-based long-distance carriers has been growing.

Switchless resellers: Along with the AT&Ts and MCIs of the U.S. came a new breed of long-distance carrier. These companies don’t own any hardware or network facilities, but simply resell existing services from the larger facilities-based carriers like Sprint or Qwest. So-called switchless resellers sign contracts with large carriers for a specific per-minute rate and then resell the service to companies and residences for a profit. Generally, switchless resellers are much smaller companies and fit a niche market of customers who want to mix the personal service typically available from a smaller company with the stability and network functions that only a large company can provide. In return for an inexpensive per-minute rate from the carrier, the switchless reseller takes over the job of providing all customer service functions and billing services to customers. Switchless resellers can be your business’s best friend, and save you quite a bit of money; or they can be a nightmare and cost you a lot. If you’re considering using a switchless reseller, you should research the company and its management team. Ask for some references before you jump into a contract with any switchless reseller.

Understanding how CLECs got a piece of the pie
There were two basic ways the CLECs gained the ability to provide local service to their customers. They either spent millions of dollars on cabling and hardware to replace the networks of the ILECS or they contracted with the ILECs to resell ILEC services at discounted rates. Companies like ICG Communications and XO Communications spent millions of dollars building their infrastructures and securing contracts in the local area to allow them to compete with the ILECs. All this work was done in an attempt to gain access to the businesses and residences in the CLEC’s target market. The advent of functional Voice over IP (VoIP) enables CLECs to use the existing copper wires that connect networks to the Internet so that they can also carry phone calls. Making phone calls online greatly increases the number of potential customers for the CLECs and reduces the overhead required to connect to them.

Working with wireless providers
Wireless communication is a method of transporting a call more than it is a standard division of labor within the telecom world. The wireless industry was born after the telecom industry was deregulated and as a result, the industry enjoys all the benefits of the breakup. The wireless companies function just as CLECs do, but can also provide long-distance service. Wireless providers have the benefit of much lower start-up costs than other telecom providers, because they simply install hardware to transmit and receive wireless calls where the hardware is needed instead of digging up endless miles of roads to lay down new cabling. Today, technology has evolved to the point that you can send and receive e-mail and text messages, surf the Internet, and download video — all with your wireless phone. This is the one part of telecom that enables you to have it all in one device.

Knowing Why Your Company Needs Telecom
The first question you need to ask yourself is, “What do I want telecom to do for me?” The answer to this question depends on several factors, including the following:

Your industry

The type of business you have

The size of your business
If your business is in the car rental industry and all of your competitors have toll-free numbers, then you probably need to keep up with the Joneses. If your business deals only with exotic car rentals, a toll-free number may not be mandatory, but a Web site displaying the Porsches and Ferraris may be a must. A national car rental chain may need an extensive data network to keep everyone informed about which cars are available at all locations. Take a moment to look at your company and your competitors to find out where you want to be in your industry. The services you and your customers demand will fall into five categories:

Voice service: This is standard phone service that you have been using since the first time you called your Grandma to thank her for a birthday present. You need voice service (and you probably already have it), so a bigger question is whether most of your calls are outbound, inbound, or a relatively even combination of outbound and inbound calls. If most of your calls are outbound, and you only receive a few inbound calls a week, then standard voice service may be all your business needs.

Toll-free service: A toll-free number is a special number that enables calls to come in from anywhere without the caller incurring a charge. The called party pays all the charges for the call. How much the called party pays for a call depends on the arrangements made with the longdistance carrier. If you look at all of your voice calls and find that the majority of them are inbound from customers, you could probably benefit from toll-free service. For many companies, not having a toll-free number is disastrous. If your car breaks down and you have to call for assistance from a pay phone, would you rather pay 50 cents to contact the answering machine of a tow truck or taxi company, or would you rather call for free? If you’re on hold for a couple of minutes on a toll-free call, at least you’re not paying for it. Toll-free service is more complex than regular outbound service, and is covered in detail in Chapter 5. People prefer to dial 800 numbers when they are going to order something, be it Diamonique jewelry or towing service. If you have to pay $75 to tow your car (and goodness knows how much to repair it), at least you can rest easy knowing that your phone call to the towing agency is the only part of the experience that doesn’t cost a thing.

Data services: The term data services usually refers to non-voice communications such as e-mail, text messaging, and fax services that are transmitted over a private network. In every company, information needs to travel from one side of the office to another side of the office. The sales team closes the order and relays it to the order-entry department. The order-entry department logs the order and sends it to the manufacturing department; the manufacturing department builds and tracks the order; and the shipping department sends the order to the customer. For smaller companies, all these steps may be taken care of with an Excel spreadsheet or an industry-specific software package. As your company grows, however, more people in more offices need the same information, and the physical location of the offices is farther and farther apart. Last year, your business’s second location may have been across the hall in the same building, but today you could have a London office that generates information that comes to you in Los Angeles before you send it off to your Tokyo division. Data transmission can be done in many ways, and your decision will be based on the physical location of your offices, the frequency of data transmissions, and the amount of data being transmitted.

Internet Service: Every office needs a connection to the Internet, if for no other reason than to enable employees to send and receive e-mail and while away the hours Googling their names. Many companies use the Internet to research their competitors, or they may use the Internet to visit suppliers’ Web sites to place orders, review shipments, and request services. I can safely say that this portion of your telecom needs will not decrease in the future — it will increase incrementally. Many companies integrate the private networks transmitting their data services and their need to access the Internet on the public network.

Wireless service: Wireless service can encompass all the other categories in this list, but because wireless service is usually provided by a different company than the one that provides your land lines, you need to view it as a separate telecom service. If you have an external sales force or a 24-hour service department that makes house calls, wireless service is an essential part of your business.

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For Dummies is a registered trademark of Wiley Publishing, Inc. in the United States and other countries. Used here by license.

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