i3 Uses ‘Time Share’ Concept to Help CLECs with Switching

Houston-based i3 Voice & Data Inc. now offers ala carte access to TDM- and IP-based switching facilities based on a “time share” concept to CLECs displaced by the phase-out of UNE-P. The one-year-old company’s UNE-3 Fractional Switch Ownership program service goes live next month.

With UNE-3, CLECs purchase only the ports they need (the minimum purchase is 1,000) from a MetaSwitch VP3500 series softswitch that i3 operates out of a PoP in Dallas, where the company also has a MetaSwitch UC9000 Unified Communications System and session border controller equipment from NexTone Communications. The softswitch provides more than 100 Class 5 features including the full range of custom calling and Centrex services, plus TDM, Ethernet and IP protocol support.

But this is not a switch partitioning leasing program. Instead, CLECs actually gain full ownership including buy, sell and lease rights to their select switch ports via UNE-3, meaning the competitive service provider gains an asset it can record on its balance sheets. “You get the benefit of the depreciation of that asset,” notes Chris Reese, founder, president and CEO at i3.

In addition, i3 provides CLECs with connectivity and will operate, maintain, and manage the network for the CLEC. Colocated with Level 3 Communications Inc., i3 also has agreements with Covad Communications Group and New Edge Networks, which provide DSL services to i3’s CLEC customers so they can resell those services and offer voice over that connectivity.

Further, i3 can provide CLECs with support for TDM- and IP-based services through its relationships with XO Communications Inc. and others, which offer it DS0 ports that allow i3 to deliver PRI, line-powered voice with GR-303 trunking.

“We basically act as an aggregator/reseller,” says Reese, noting that by combining the interests of its multiple CLEC customers, i3 gains bargaining power with vendors can pass those savings on to its customers.

While voice and DSL services are i3’s primary focus, the UNE-3 program works like UNE-P it’s ala carte. If a CLEC just needs 911, for example, the company simply buys that network component from i3. If the CLEC just needs transport, but wants to do origination and termination themselves, they can do that.

The switch ports are available at a one-time, fixed-price-per-port fee that ranges from $24 to $30 apiece, depending on volume. And i3 offers financing for CLECs, if desired.

As for the services, i3 typically comes out at $1 to $3 per line less versus most first-year commercial agreements CLECs have with ILECs, says Reese, adding that he’s including voice mail into his end of the equation, which he says most ILECs do not supply as part of their deals with CLECs. The savings is even more dramatic when you look at bringing a specific building on-net, says Reese. i3 does IP trunking from the switch to the building and does line-powered voice to office and residential buildings, but “it’s not UNE-L at all,” it’s just a data connection between an endpoint and a switch, Reese says.

At the end of July, i3 was working with six CLEC customers, including Amerimex Communications of Atlanta and Navigator Telecommunications of Little Rock, Ark. Each company has more than 50,000 lines.

While the MetaSwitch softswitch is configured for 60,000 ports, i3 presold the subscriptions to those ports, so the company already is planning to increase its capacity. “Our plan is to have 15 to 20 percent more capacity than our current customer base demands, that way we can scale quickly,” says Reese.

He adds: “What made UNE-P so great was just-in-time connectivity.” CLECs with their own facilities must have that equipment in place when customers need it, he says, but i3 plans to stay ahead of what CLECs need in terms of capacity so it can offer additional ports and services as CLECs and their customers require.

Part of i3’s buildout plan includes additional gateways in Chicago, and possibly in Atlanta and on the West Coast.

“We bring flexibility to i3, that’s what makes their offering appealing,” says Andy Randall, vice president of marketing at MetaSwitch. A lot of CLECs have bought switches from MetaSwitch, he says, but a lot of CLECs are not in the position to operate their own facilities because UNE-P allowed them to operate in large part as just marketing and sales organizations.

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