Truth be told, I wasn’t easily sold on the idea of writing an article about Granite Telecommunications LLC. Really, what’s so interesting about a POTS reseller? The good folks over there, including CEO Rob Hale, a longtime industry friend, readily admits there’s not one thing sexy about it – until you consider that the privately-held company’s annualized revenue is about $500 million.
That makes Boston-based Granite one of the largest CLECs in the country – on par with companies like Broadview Networks Inc. and One Communications Inc. and just behind the billion-dollar boys – PAETEC, XO Communications Inc. and Level 3 Communications Inc. This is a particularly compelling statement considering Granite’s relatively low profile; it just may be the largest CLEC you never heard of. I’m exaggerating, of course; it’s not like Granite’s been hiding under a rock. (Forgive the indulgence; bad puns are a personal weakness.) But, I’ll bet even those familiar with the company are surprised to learn of its size.
How did this happen right under our noses?
Granite was formed by Hale and his late father Robert Hale Sr. (Bob to his friends) in June 2002 to provide local dial tone to businesses under the now-defunct UNE-P model. (A quick refresher: UNE-P stands for unbundled network element-platform and it describes an alternative to resale wherein a CLEC could lease loops, transport and switches on an unbundled basis, effectively becoming a local telco without the investment in network facilities.) The FCC put the kibosh on the service in 2004, phasing it out completely by March 2006. Companies like Granite were forced to make other plans — namely add switches and migrate to UNE-L, transition to VoIP or sign commercial contracts replacing UNE-P agreements. This last choice, which entailed less favorable rates, was not seen as a popular option but rather an interim one for many UNE-P providers. A few like Granite stuck it out, signing agreements with the ILECs to cover a majority of the United States.
In an interview with PHONE+, Hale recalled the “seismic shift away from local resale” as a result of losing UNE-P. “We had grown to critical mass and could negotiate favorable rates,” he said of his decision.
The mass exodus, in part, may have helped to fuel Granite’s growth in a niche few have focused on. In 2004 when Granite transitioned its UNE-P contracts, Hale said the company was running at about $77 million in annual revenue. By 2005, it had nearly doubled to $141 million.
