CLECs, interexchange carriers (IXCs), and ISPs entering the WAN environment must face decisions in capital infrastructure investment, initial service capacity, service offerings, growth handling, and acquisition of market-share. ILECs have an established and deployed market, whereas the whole process of unbundled competitive service offerings is new or still being developed in many locations. ISDN service offerings are not available in all locations, and customers who desire PRI services must routinely wait for access.
For CLECs, some key issues include the following:
- comparing the capital investment of switch vs. unbundled switch services from the ILEC
- minimizing switch costs while accessing ISP markets
- supporting growth with enhanced service offerings
- gaining termination reciprocal revenue share from the ILECs and IXCs
- entering the ISP market
When designing CLEC networks, the ISP factor must be considered for proper service capacity and growth potential. Lack of PRI service or exceeding switch capacity will cause customer outages and troubleshooting network expenses for CLECs and ILECs together. By using SS7 IOF facilities, CLECs can properly allocate trunks and switch capacities for their customer base without large-scale server, gateway, or switch investments.
IXCs and ISPs entering the CLEC market face the same issues. While IXCs may already have distributed SS7 facilities, service offerings on the local side can be competitive with the ILECs by properly distributing ISP traffic and avoiding ILEC PRI access charges. ISPs are facing competitive pressure from many angles. Competition from other ISPs, CLECs entering the market, advanced offerings from ILECs and IXCs, pricing pressures, and service offerings are some important issues in the ISP business. ISPs that rely on PRI service from service providers pay a premium for access and, in some markets, measured service per minute. Their customers, however, demand flat-rate services. ISPs who become CLECs can connect to end offices and the PSTN using SS7 and save recurring PRI access charges. ISPs and CLECs can also offer PRI services in areas where PRIs are not offered by ILECs and only channelized services are available.


