Photo of C. Douglas Jarrett

Wireline services providers should meet four basic service obligations:  provision services and circuits in a timely manner; meet or exceed service level commitments; timely and accurately bill for services; and, meet reasonable customer care expectations.  The services providers’ standard agreements do not always reasonably define these carrier obligations or address the consequences of failing to meet these obligations.

Provisioning.  Customers are focused on timely provisioning of services when either transitioning to a successor carrier or ordering additional services, looking to their carrier/ISP to manage access circuit provisioning.  Depending on the service and services provider, provisioning SLAs may be offered.

For significant MPLS or VPLS network migrations, an enterprise must maintain connectivity and minimize the period during which it pays both the successor and incumbent carriers for two versions of essentially the same service.  A major risk typically not addressed in provisioning SLAs is associated with the delay in provisioning very high capacity access connections.  If these installations are delayed for a significant period, as lower capacity DS-1 or Ethernet connections are provisioned, the duration and cost of operating two networks can extend well beyond the period reasonably considered in the business case supporting the decision to migrate to a successor carrier.

This financial risk can be mitigated by a credit schedule that obligates the successor carrier to issue credits for its services for the period that dual network operations must be maintained beyond a certain date.  Alternatively, assuming the high capacity access circuits are not installed by this date, billing for installed successor network access connections and ports should abate until all access services to major customer locations are provisioned and tested.  Terminating the successor carrier for cause (at some point) is an option, but at this juncture in the procurement cycle the customer has little negotiating leverage with the incumbent or any other carrier.

Service Level Agreements.  Service reliability and availability are customers’ continuing priorities.  Carriers offer a range of service-specific SLAs.  Some are lodged in carrier service guides; others provided as attachments to agreements.  In evaluating SLAs, certain considerations are paramount.  Credits are the standard remedy for SLA exceedances and are typically capped by the cost of service (to a particular location).  Except in managed environments, customers must call in the trouble ticket to trigger the carrier’s obligation to remedy the trouble.

The point at which SLA metrics, such as mean time to repair (MTTR), jitter/latency and availability, are measured is another basic consideration in assessing SLAs.  These points may be at the services provider’s network edge (its closest point of presence (POP) or data center) or at customer edge locations (the demarcation point at or its router or switch within the customer’s premises).  Another consideration is whether the SLA’s conditions and exceptions effectively negate the value of the SLA.

While negotiating custom SLAs with carriers can be a futile task, higher thresholds for a given metric, such as availability, are usually obtainable.  Carriers offer a menu of options, each at an incremental price or charge, to deliver a higher service level.  The options include multiple customer routers, managed router services, diverse access arrangements to a common or multiple carrier POPs or data centers.

For non-chronic service issues, credits are a reasonable remedy.  Carriers overreach, in our view, when adding language to the effect that credits are the customer’s sole remedy for SLA exceedances.  Also, at some point, credits are inadequate; chronic service troubles at a major customer location seriously can impact a customer’s business and operations.  This is particularly true for “any-to-any” services such as MPLS and VPLS and for high speed Internet access service for e-commerce sites.

While the concept of “chronic” may vary from customer to customer, customers should negotiate escalating remedies concluding with termination in order to address chronic service problems.  Escalations include root cause analyses, re-provisioning, or SLA upgrade measures (access diversity, carrier POP or switch diversity, or implementation of managed services) at no additional charge.  If the troubles continue, termination is the customer’s last option.  (We discuss termination rights and damages caps in a subsequent entry).

Timely and Accurate Bills

Billing disputes are the principal point of friction between carriers and customers. Telecommunications carrier billing systems are not error-free, spawning a cottage industry of telecommunications expense management services.  Billing issues often arise shortly after cutover to a successor carrier or installation of new services.  Putting aside breach of contract considerations, if the projected savings are not realized or cannot be verified, the merits of the carrier selection decision break down.

Accordingly, billing review and audit provisions are typically negotiated, including the number of months of prior bills that can be reviewed or audited.  Informal procedures are often negotiated to provide a path or series of discussions between carriers and customer managers to resolve billing disputes.  Customers must also ensure that unresolved billing disputes can be addressed through the agreed upon dispute resolution procedures.

As with chronic service issues, at some point recurring billing errors go to the “basis of the bargain.”  Customers should satisfy themselves that their right to terminate the business relationship for major, recurring billing issues is not foreclosed by the standard text and format of carrier services agreements.

Customer Care Obligations

Customer care is variously defined, encompassing accurate billing and timely provisioning among other matters.  Timely and accurate order processing, delivery of agreed upon billing reports, periodic updates of new offerings, and service trouble shooting also fall within the ambit of customer care.  While all of these functions are not performed by customer’s account team, a responsive account team generally can take steps to ensure carrier support functions meet customer expectations, with the possible exception of systemic billing problems.

Thus, customers often request language in the agreement that allows the customer to request replacement of the account manager or the account team. While carriers prefer customers not dictate personnel decisions, carriers typically acknowledge customers’ interests in this context and may agree to such a provision, provided the basis for the customer’s request is tied to the individual’s or account team’s performance.