Covid-19 is driving an unplanned, hopefully temporary, shift in enterprise telecommunications management. Plans to install Gig Ethernet access and MPLS ports at major locations can wait. The pressing matters are establishing and maintaining connectivity and network security for hundreds or thousands of new full-time teleworkers. Basically, it’s time to play defense rather than offense. Telecom/IT staffs are more important today than ever. The ability to communicate and interact with others during the Covid-19 pandemic is an “essential service.”
The escalating demand for audio and video conferencing services raises a range of issues:
- How many participants can join an audio conference?
- Can the number of participants be increased? If so, how soon?
- Can additional conferencing services be secured and deployed?
- What about online conferencing platforms such as Zoom, Skype, WebEx, and Teams?
- Should use of Zoom be restricted in some instances?
- How long will it take to expand IP addresses for the corporate VPN?
- Are the Internet’s core networks holding up? Based on peering point exchange data, the answer is “Yes.”
In light of the demand for online conferencing, the FCC has issued a temporary waiver of its so-called “access arbitrage rules” so as not to penalize the underlying service provider that carries the burgeoning conferencing traffic for Zoom and WebEx. Similar waivers may be in the offing.
What about call centers? Are call centers considered “essential services” in some states or in all states? What about in other countries such as India?
The emptying of offices and closure of public transport and nonessential businesses are also driving the demand for wireless services. The FCC has granted “Special Temporary Authority” to wireless carriers so they can access additional frequencies to support the surging demand for their services and to wireless internet services providers (WISPs) to access to spectrum at 5.9 GHz (currently reserved for Dedicated Short Range Communications (DSRC)) to meet the increased demand for broadband access in their service areas.
What About Enterprise Cost Containment Goals? As Enterprise Telecom/IT staffs focus on the connectivity needs of quintupling remote workforces, this may not be the optimum time to initiate a wireline or wireless services RFP. However, cost containment may now be critical for many organizations. To address this emerging concern, we recommend Telecom/IT staffs review their wireline and wireless service agreements, focusing on three considerations:
- Review bills or billing reports to determine if the enterprise is trending toward a potential shortfall in its minimum commitment level or in achieving a discount threshold. If this review indicates a shortfall may be on the horizon, we recommend (a) reviewing the business downturn provision in your agreement, focusing on the triggering conditions and agreed upon resolutions or outcomes; and (b) reviewing the force majeure clause to determine whether a pandemic qualifies as a force majeure event and whether this clause excuses a customer’s payment obligations, however unlikely. In today’s environment, this concern likely will arise in connection with wireline services agreements.
- If a wireline or wireless services agreement is expiring or the agreement is in its final renewal term or transition period, enterprise staff have two options. First, request a one-year extension or exercise the right for an additional one-year renewal term. Enterprises should avoid obtaining service on a month-to-month basis or face a 60%+ increase in rates at contract expiration. Second, if the agreement has six months to a year remaining in the term and cost savings are paramount, initiate efforts to issue a timely RFP to secure a new agreement.
- Conduct or propose/agree to a short extension of time to conduct the scheduled competitive pricing review. The carriers should not be looking for windfalls during the pandemic. Presumably, they want to keep your business as the pandemic passes.
Keller and Heckman represents enterprises in negotiating telecommunications services agreements. Please contact the author to discuss these or related procurement considerations.