A fundamental expectation of clients in any commercial transaction is that counsel understand the business deal. When procuring Wireline voice and data communications services, major businesses, institutions and state governments make five fundamental business decisions. The first four apply to Wireless services procurements.
- Choice of Carriers
- Minimum Purchase Commitments
- Wireline Service for Enterprise Data Communications
The major domestic Wireline carriers are AT&T, Verizon, Sprint and Qwest/CenturyTel . The core services these carriers offer to enterprise customers include long distance, VoIP, audio conferencing and various data services—high-speed Internet access, frame relay, private line (TDM and Ethernet), and Multi-Protocol Label Switching (“MPLS”) services. As a rule, local exchange service remains regulated and is not included in these deals. These carriers offer related services, such as network (router) management , data center (collocation) and network security services, but are not yet substantial providers of cloud computing or content delivery services. Customer premises equipment (routers and switches) typically are not bundled with these services.
All of these carriers offer international services ( i.e., services between the US and other countries). Multinational enterprises also are interested in Rest-of- World (“ROW”) services (i.e., services between and sometimes within foreign countries). Several domestic carriers and foreign carriers such as Telefonica and BT offer ROW services.
The Wireless voice and data services available to enterprise customers are largely the same as those offered to consumers, although pricing options are different. Handsets are bundled with Wireless services. The principal domestic providers are AT&T, Verizon Wireless, Sprint and T-Mobile. Available handset options, in-country coverage, Wireless data options and the extent to which domestic carriers coordinate or manage wireless services in other countries are among the critical decision points. Wireless service offerings tend to be country-centric.
2. Choice of Carriers
Wireline and Wireless services are highly commoditized offerings with high market entry barriers. Enterprise customers typically utilize RFPs and consultants specializing in procuring these services. Properly crafted RFPs include substantial information regarding enterprise traffic and bandwidth requirements and service preferences. As discussed below, the real-world prices paid by enterprise customers are not publicly available.
Enterprise customers have a strong interest in limiting the number of Wireline and Wireless carriers, respectively, from which they obtain service, principally to clarify responsibility for service quality, provisioning and trouble resolution, maximize bargaining leverage, and develop a mutually beneficial business relationship. Typically, Wireline and Wireless carrier selection decisions are made independent of each other.