Tuesday, March 31, 2009

Becoming a CLEC

From the soon-to-be-gone, ISP-CLEC.com list, someone asked:

I'm looking into what it would take to startup a voice CLEC for my VoIP operations. .... I plan on hiring Kris Twomey to do the legal wrangling, work with vendors on technical training, get a little grease on my elbows, and then hiring people to fill in the gaps. Is there anything major I'm missing here?

  1. Switch
  2. Circuits into tandems.
  3. Circuits into busy COs or tandems where my own fiber isn't appropriate
  4. Same as above for 911 tandems (if in my area, otherwise the PSAPs directly)
  5. Gobs of government paperwork
  6. PITA of being more directly involved with the ILECs
  7. CALEA, which vendors and lawyers should be able to take care of

One reply from Alex B:

"you're generally not going to have physical circuits to tandems and/or many COs. There will be an mid-span meet to an ILEC POI for interconnection and trunk groups off that will go to tandems, direct end-office trunking to COs, etc. Private circuits will apply to backhaul from COs (if you choose to go that route) and possibly the E911 stuff - don't know if those are just trunk groups too." Plus the following 5 things:

  1. Interconnection agreement;
  2. CFA;
  3. OCN/Pooling/NANPA number allocation;
  4. Point codes; and
  5. SS7 STP vendors for services - who's going to do your CNAM, etc?

Let's not forget the the following other PITA's:

  1. processes and forms that you have to put into place yourself, like a PIC/LPIC LOA, credit apps, and ordering forms as well as ordering processes.
  2. The OSS/BSS will be a kicker.
  3. LD for 1+ Dialing.
  4. Keeping two training telecom engineers on staff. Voice requires 24/7 monitoring. Lots of things happen to the switch, to circuits, to routing, to translations, to LNP, to the copper/colo/etc.
  5. You can outsource LNP and CNAM, even E911.
  6. Mary Lou Carey can help you with circuit ordering.
  7. Don't forget about $10M in Business Liability Insurance as well as E&O Insurance.
  8. Set up a separate corporation to be the CLEC. Added expense and paperwork, but so worth it.
  9. Kris Twomey can help with the ICA as well as the OCN Number and NANPA Numbers.
  10. Collocation costs.

CFA will be handled by you into your collocation. Collocation costs about $75k-$150K per CO depending on ILEC and equipment (and how many mistakes you make that you have to keep re-applying for at $2500+ per app). It will get cheaper after the first one. Less mistakes. Less brand new equipment.

Insurance will be upwards of $10K, so you have to factor that in with CAPEX and new payroll. Plus you have to be financially solvent per the State PUC guidelines, which in some cases means having $100K in cash or equivalents.

Plan that it will take about 180 days from start date until you have your collocation build.

And we still aren't done yet. Consider the following:

  • Operator Services
  • Customer Service
  • Billing
  • Back Office
  • Directory Assistance
  • Repair/Install
  • E911
  • Numbering Resources
  • Switch Maintenance
  • Regulatory Compliance
  • Tax Compliance
  • Financial and a Pro forma
  • Background of all principles
  • Corporate data
  • Draft a Tariff
  • LERG training

If you need help, that's one of the things we do here at RAD-INFO, Inc. Make an appointment to discuss this. Our rates are reasonable - and we work closely with Kris Twomey.

Fred Goldstein of Ionary has a great checklist (old version is here).

CLEC Therapy slides from the last FISPA meeting are here. Next CLEC Therapy is in Nashville on June 25.

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