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News and comments on community broadband networks, the communities deploying them and the technologies that support them. Published by Denise Frey and Al Bonnyman.

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Thursday, August 07, 2003


Profile of a successful regional CLEC

Profile of a successful regional CLEC

Many CLECs (competitive local exchange carriers) went out of business after the bust and the whole idea of trying to successfully compete with the local phone company was called into question.

Many of these failures were due to a combination of three problems:

1. Poor execution -- in the rush to build, many networks were poorly built, companies overstaffed, and sales goals missed.

2. Overcapacity in major markets -- too many players had the same idea in cities like Chicago and New York, leading to a glut of capacity and a total collapse of prices in big cities.

3. The sudden drying up of capital from previously generous backer left some CLECs with half-built networks.

The overcapacity issue has also hit some utility telecom operations such as the City of Marietta's fiber system in the Atlanta suburbs.

Yet, there are CLECs out there that are doing well, largely by focusing on smaller markets where the only competition is often a distracted Bell preoccupied with its' big cities. They also manage growth and construction carefully. Here's a profile of one of these survivors:

   Fibertech finding success

Operating even further off Wall Street's radar are municipal fiber-to-the-business networks in smaller towns which are also proving to be financially successful while serving vital economic development goals in towns underserved by the big telecom players.


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