Who is really selling that DSL service?

Customers might want to use caution with DSL services from some local carriers.

By Tim Greene
Network World, 11/22/99

Corporate customers should pay particular attention to service-level agreements (SLA) when they buy digital subscriber line (DSL) services from established local carriers selling DSL outside their home regions.

Such services are pieced together using as many as four other service providers, creating a potential morass when trying to fix problems.

"Where does the buck stop if the line goes down?" asks Carl Garland, principal analyst for network services at Current Analysis in Sterling, Va.

For example, SBC Communications and GTE Internetworking recently announced deals with Concentric Networks, Covad Communications and NorthPoint Communications to provision DSL lines outside GTE's and SBC's home territories.

And US West and Qwest are teaming with an unspecified third party to deliver DSL outside US West's territory.

In its arrangement with Concentric, SBC will resell under its own name Internet access packages that Concentric offers.

GTE will use Covad and NorthPoint to set up DSL lines and then add GTE's own Internet access services to produce a DSL Internet access service.

These relationships are actually more complicated than they seem at first glance.

Take the instance when a customer buys a DSL service from SBC outside its 13-state region. Beneath that service the actual wires to the customer site are owned by an established local carrier, such as Bell Atlantic. SBC would rely on Concentric to set up DSL links to customer sites, but Concentric might pass that chore along to DSL specialists Covad or NorthPoint.

Covad or NorthPoint would deliver the traffic to a Concentric site. That traffic might then be turned over to long-haul provider Williams Communications to deliver it to SBC. Or Concentric might just drop the traffic onto the Internet, in which case SBC would simply be a reseller of the service, with no direct control over the network.

"A savvy customer might not be comfortable with that," says Claudia Bacco, a DSL analyst with TeleChoice, a telecom market consultancy in Boston.

Garland recommends getting SLAs for DSL services that impose a penalty if availability of the line drops below a set level or if throughput on the line drops off. The SLA won't make the service perform better, but customers get a break if service is bad.

The complexity of the service does not necessarily mean there will be problems. After all, Bacco notes, long-distance phone calls commonly traverse the networks of three or more carriers. "So in theory, the [underlying carriers] should be transparent to the customer," she says.

Both Bacco and Garland say it is possible that local carriers with resale agreements with ISPs and DSL carriers could wind up merging. SBC, for example, already owns part of Concentric.

Reselling services is a low-margin business, Garland says. This means the regional carriers are probably not pushing out-of-region DSL for the profit, but as a way to get their feet in the door with customers.

By reselling, the carrier does not have to formally register itself as a competitive local exchange carrier or bargain for equipment space in local carrier's switching offices, Bacco says. Both are time-consuming and expensive.

Customers can expect that the out-of-region DSL offerings will rapidly become more sophisticated. For example, an initial DSL Internet access service could evolve to include voice over DSL and long-distance, Bacco says.

SBC has already said that DSL will provide remote links for customers using its Enterprise Virtual Private Network (EVPN) managed service. EVPN can tie remote employees, business partners and customers to corporate networks.

Meanwhile, DSL carrier Rhythms NetConnections is teaming with Intermedia Communications to deliver voice services over DSL lines and frame relay links. Intermedia has its own long-haul fiber network and relationships with local carriers to deliver nationwide services. It also uses DSL as an access link to deliver frame relay services to customer sites.

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