Monday, June 15, 2009

CLEC Strategy

Latest discussion is about Copper Plant Access by CLEC's. ILECs are replacing copper plant with fiber. Access to Remote Terminals is very limited. What are CLEC's doing about this?

Well, for the most part, CLEC's have to change their strategy NOW. If you weren't paying attention during the UNE-P disaster in 2005 following the TRRO ruling when UNE-P was taken away, then you may repeat the same mistakes.

Copper plant within 3 miles of a Central Office will likely be available for a long time. If you are selling as low as you can and the UNE-L becomes Special Access, then your margins are shot and you are sunk. But if you are pricing it with 50% margin at UNE-L and Special Access comes along, you should be doing okay.

Your approach needs to be to deliver as many services as possible over as fat a pipe as available. All the way to the desktop with the handset.

The comparable model is Wireless. The tower is comparable to the colocated CO. Draw a circle around the tower or the CO - that is your target market. Period.

The other model is to say good-bye to access, buy Special Access circuits now at retail or volume buy rates and make your money on services that can still be delivered in a BYO Broadband world. Layer 7 is where the money is.

More thoughts on CLEC Strategy here.

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