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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, November 13, 2003


Profile of another successful regional CLEC

The Oregonian has a lengthy profile of regional CLEC (competitive local exchange carrier) Integra Telecom. Integra has built a successful business competing against incumbent Qwest in selected underserved markets targeting small and medium-size business.

We've profiled other successful regional CLECs before, including another Oregon CLEC earlier this week.

Why do we mention these in a blog about power utilities and municipalities in the telecom business? Because too many people have drawn the wrong conclusions from the business failures of most CLECs after the telecommunications bust of the last several years. We hear them being used as reasons to try to block municipal broadband projects.

Many of these CLECs went bust for reasons that have little to do with a carefully planned municipal fiber project in towns and small cities. A few of these include:
  • Too many CLECs went after the very largest cities each deploying fiber down the same busy streets. Instead of competing with just the incumbent Bell, they were also fighting many providers, resulting in a collapse of bandwidth pricing in areas like Wall Street.
  • Some CLECs went after the residential market primarily selling DSL lines using the Bells' networks with very thin margins. They weren't offering additional services like cable TV.
  • Flush with venture capital and told they were smarter than everyone else, some CLECs just plain mismanaged their businesses and wasted their money.

We think the experiences of these CLECs more closely mirror those that a well-managed power utility or municipal telecom business focusing on smaller markets can expect. Bringing advanced services, a local presence and responsive customer service can be both a good business and a valuable community service in these towns.


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