Does my ISP Qualify to become an ISP/CLEC?


In this ever changing and evolving industry, ISP’s have to think about becoming ISP/CLEC’s. Many questions come to mind. Here are the answers to the most commonly asked questions, from the experts at CLEC Strategies:

Can I afford to become an ISP/CLEC?

If an ISP wants to maximize its revenues, save money and offer convergent services in order to stay competitive, it can not afford to remain as just an ISP with dial-up subscribers, web hosting, etc. You will be surprised how inexpensive it can be to become a CLEC to cut your telecommunications bills along with being able to offer phone service and large data lines on a resale basis to your already existing and growing customer base.


Will I remain or become more competitive by becoming an ISP/CLEC?

Most definitely you will become much more competitive.


What are the short-term benefits of becoming an ISP/CLEC?

The short-term benefits would be reduced costs to the ISP. The new CLEC entity would now service the ISP instead of the current ILEC.


What are the long-term benefits of becoming an ISP/CLEC?

The long-term benefits would include additional revenues as an ISP/CLEC, greater value of your entity (IPO, merger or acquisition). Many ISP/CLEC’s generate greater profit margins from the telco services vs. the ISP services.


What are the regulatory costs affiliated with becoming an ISP/CLEC?

As part of the CLEC Strategies "turn-key" solution, fees for the certification process range from $1,200.00 to $7500.00 depending on the state (Phase I). This includes strategies, state certification application and filing, tariff drafting and filing as well as obtaining all necessary operating codes to interface with the ILEC or CLEC.


What are the savings affiliated with becoming a "Switchless Reseller" ISP/CLEC?

These savings will vary depending on the state as well as the ILEC. Typically they range from 12-32%.


What are the savings affiliated with becoming a "Facility Based" ISP/CLEC?

These savings also vary depending on the interconnection agreement, the state and the ILEC but are typically greater because as a Facility Based CLEC, the interconnecting ILEC/CLEC has to provide all inbound trunks from their closest CO to your switch at NO cost. NOTE: You will have some trunking costs but you can expect savings greater than 50% on your internal costs and typical revenues of 30% on telco services sold to end users.


What are the additional revenue streams that I can generate for my business as an ISP/CLEC?

These are far too great to mention here. In one word "UNE-P", ask our telecom managers about the revenues around UNE-P services. Initially, if you are selling dedicated services to your clients (i.e. ISDN, PRI, T-1’s, Frame Relay, etc.) you currently make ZERO dollars on those trunk lines & services.


Will the new revenue streams outweigh the costs of becoming an ISP/CLEC?

In a single word – YES they will, providing your current telco costs make it financially feasible.


Will I have to colo at the ILEC’s CO in order to make money?

Not necessarily. Colo at the ILEC CO is expensive. Your tandem access switch can be in your facility depending on the distance you are from the CO. DSLAM’s for xDSL, on the other hand must be collocated at the CO.


What are the costs affiliated with colo?

These costs again vary depending on the CO and the ILEC. The good news is that the CLEC Strategies negotiators are some of the best in the industry.


How difficult is it to get an interconnect agreement? What are the costs and time frames involved? Should I opt-in or negotiate a new agreement?

Getting an interconnection agreement with the help of the CLEC Strategies experts is NOT difficult at all. CLEC Strategies experts currently work on interconnection agreements with every major ILEC/RBOC in the USA. Depending on whether we can "opt-in" (our preference) or negotiate a new agreement will have a major bearing on the final costs of obtaining an interconnection agreement. The other variable is how many interconnection agreements are necessary in order to meet the goals and service areas of the new ISP/CLEC. Sometimes interconnecting with another CLEC can prove more beneficial and more than one interconnection agreement is NEVER out of the question. For additional information on the costs affiliated with interconnection agreements, please contact us at 866-881-3229.


How difficult is it to get a resale agreement?

Once again, this is NOT a difficult process for the CLEC Strategies staff. The rates are all defined in the ILEC/CLEC tariff but they do vary depending on the ILEC and the state.


What is the time frame from start to finish?

Typically speaking, the staff at CLEC Strategies can complete the entire CLEC process in 120 days. The approval timeframes at the state PUC’s vary from 1 day to 1 Year.


How long will my certification process take?

Please refer to the above answer. It will take CLEC Strategies 3-4 weeks, from the time we are contracted and receive all necessary data from the client to prepare the certification application, draft the tariffs for client approval and complete the interconnection agreements.


How long does it take to have telco grade CO equipment installed (class 4/class 5 switches)?

Typically speaking it will take between 8-12 weeks to have a switch installed and turned-up. It is for this reason that we work on the switch selection concurrently with the certification process. The goal is to have the switch deployed and beta tested concurrently with the certification approval.


What type of switch, sales & marketing and product training will I need, and at what cost?

As a new ISP/CLEC there will be additional training necessary for many of your current staff members. CLEC Strategies offers over 40 different training courses to meet the specific needs of all clients.


Can I reduce/consolidate the numbers or POPs I currently have and set-up Virtual NXX’s for greater coverage?

As a "Facility-Based" CLEC you can co-locate your POPS in one central facility right next to your Tandem Access Switch. By utilizing virtual NXX’s you will have the ability to expand your coverage to the entire LATA and have local numbers for not only your current dial-up subscribers but also for new ones.


What about numbering resources?

As a Facility-Based CLEC the interconnecting ILEC is required to provide an initial bank of NPP-NXX’s (usually 10,000).


What about number portability?

This is an issue that can be easily resolved as well. No need for changing access numbers.


Should I consider becoming an IXC as well?

This depends on whether you plan on doing InterLATA or Interstate traffic. Long distance traffic is extremely profitable. We will also need to consider VoIP in order to determine the need for Interexchange status. CLEC Strategies has the ability to handle the IXC (State & Federal) implementation on a turn-key basis as well.


What are the advantages of hiring regulation specialists to walk me through the process?

The primary advantage to hiring regulation specialists like CLEC Strategies is the vast knowledge and expertise that they bring to the table. The CLEC Strategies contacts with the ILECs, RBOC’s and CLEC’s nationwide make the interconnection process run smoothly. The CLEC Strategies regulatory staff is perpetually staying on top of the regulatory environment on both a state and federal level, making your filing go more efficiently. Additionally, EVERY client taken on by CLEC Strategies over the past 7 years has been certified – NO ONE has been denied certification. Additionally, most ISP staff are currently over burdened with current responsibilities. The CLEC Strategies staff allows you to run and grow your ISP while we work diligently in the background to create you as an ISP/CLEC.


What are the disadvantages of hiring regulation specialists to walk me through the process?

The only disadvantages would be the cost but the advantages outweigh the minimal costs affiliated with becoming an ISP/CLEC.


Should I hire a telecom attorney or regulation specialists?

There are many telecom attorney’s more than capable of handling the regulatory process. Unfortunately they look at your plan from strictly the legal aspect and not the business aspect. Regulation specialists like CLEC Strategies offers much more than regulatory work. CLEC Strategies has and uses the top telecom attorney’s in the USA. Turn-Key solutions often save dollars in the long run.


What is the monthly re-occurring expenses as an ISP/CLEC?

The monthly expenses as an ISP/CLEC include billing, Carrier access Billing, provisioning and customer service and tax compliance. It is usually recommended than a new ISP/CLEC outsource these functions at least for the first year of operation. All of these functions can be brought in house after sufficient training.


What should my total budget be for the ISP/CLEC process?

This will depend on the scope of the work and the number of states certification is required in. Please contact a Telecom Manager at CLEC Strategies to discuss all of the costs and budgetary figures.


What does it take to get started on the ISP/CLEC process? Contact CLEC Strategies at 866-881-3229 to discuss your plans, have your opportunities evaluated, request the CLEC Strategies Master Contracting Agreement, fill out the CLEC Strategies ISP/CLEC Questionnaire and get started TODAY!