Avoiding Local Loop Charges: Can It Be Done?

The most costly portion of any point to point data connection is the local loop, commonly referred to as the last mile? A local loop provided by the local exchange carrier (LEC) is a tariffed product that does not mirror current market rates. For many years, the LEC used commercial services to subsidize a mandate to provide services to all residential customers.

The Telecommunications Act of 1996 created competition to provide local loops to business customers. New companies commonly referred to as competitive local exchange carriers (CLECs) began to overbuild fiber networks to provide the last mile to business customers. The CLECs were not burdened with the requirement of providing service to all residential customers and therefore were able to provide aggressive prices for last mile connections.

The collapse of the telecom industry at the turn of the last century forced many of the early CLECs into bankruptcy. The fiber networks they built, however, are still in service. The trick is to know where to find them and understand how to leverage them. Finding alternative last mile providers is a combination of good detective work, tribal knowledge and creativity.

The first step in finding an alternative local loop provider is to determine what network providers have service to your building. If an alternative provider is already servicing customers in your location then you should be able to acquire a local loop for a fraction of the cost of one provided by the LEC. This is where the detective work comes into play. You can start by asking neighbors who provides their telecommunications service.

If there are no known alternative local loop providers in your building the next step is to determine which providers have network within 1000 feet of your location. This typically will classify your building as near-net?to a provider. In many cases an alternative local loop provider will consider extending their existing network to your location to provide service. The cost of the build out is then worked into your monthly service charge. Each network provider has a different business model to determine how much of the burdened cost of the network build is passed along to the customer. You want to search for a company that is willing to shoulder some of the cost in exchange for additional customers that they will acquire in your building.

The final option to consider is building a private fiber network to connect your locations, Although a large undertaking and extremely time consuming it can sometimes provide a short payback period of your bandwidth requirements are large. If you do not have a capital budget for this type of construction project there are companies that will build the network and lease it back in the form of a monthly service charge.

A prime example of a custom network build-out is a XXXXXXX company we recently serviced. They needed connectivity, but the LEC was going to charge $28K per month for lesser bandwidth. We were able to design and deploy a custom build of an OC48 connection for only $15K per month. With NEFs help, this company was able to get five times the bandwidth for nearly half the cost.

Deciding what connectivity solution is right for you will depend on your individual needs, time frame, budget, bandwidth and security, but you should take the time to find out if a fiber connection to avoid the local loop is possible.

Is there an easier way to find an alternative local loop provider? Call NEF at 877-DK-FIBER. One phone call will get you access to information on 40+ fiber providers and a database of nearly 30,000 lit buildings. If your location is not currently on-net with a service provider, NEF will map out the closest available networks.

At NEF, we have over 25 years of experience in the telecommunications industry, and we want to empower you with dark fiber information and services. Because NEF is carrier-neutral, our allegiance is to our customers and our charge is negotiating the best possible scenario to fit our customers' needs. Call us today at 877-DK-FIBER for more information!

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