Photo of 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).


Continue Reading Sustainable Wireline Agreements–Substantive Carrier Obligations