BUSINESSWEEK ONLINE: FRONTIER - the resource for entrepreneurs  

Before You Grab One of Those Bundled Telecom Deals

An all-in-one service plan can turn into an all-or-nothing gamble


E-Mail Story

Digital Manager Archive

Online Extras

From fledgling dot-coms to grown-up Baby Bells, communications providers have started to bundle cheap telephone voice service with more expensive data offerings. If you haven't heard from these companies yet, you will soon. No question, some of the deals are attractive on price. But there's another question you need to consider before signing up. How long can your company afford to be without phones, an Internet connection, or its Web site? If the answer is not very long, you need to make sure your contract has what's known as a service level agreement (SLA) -- and that you know what it says.

Increasingly, as voice and data services become essential to day-to-day operations, businesses are these agreements from their phone company or Internet service provider. Historically, SLAs have been offered only by the largest companies to the largest companies. But SLAs are beginning to surface in lower-level contracts, such as for digital subscriber line (DSL) service for small business.

Be aware, however, that even the best SLAs won't reimburse you for lost sales opportunities nor for any mayhem that may beset your company should the lines go dead. Instead, you will get credit -- usually one day's worth of service -- if your phones fall silent or your Web site goes black.

CREDIT DUE. Bell Atlantic, for example, guarantees that the Internet service it provides to customers paying for its "private line" data connections will never be down for more than 30 continuous minutes. Should that occur, businesses are given a one-day credit. However, the SLA does not reimburse its Internet customers if service is slow. Such a service guarantee is typically found only in contracts offered to businesses requesting very high-end data services, such as frame relay, though they are starting to appear in contracts for virtual private networks.

VPNs, which allows two remote users to use "tunneling" technology to carve out a private connection over the public Internet, are becoming more popular among small businesses. HarvardNet, a Charlestown (Mass.) Internet service provider, is among the first to offer a service-level agreement on DSL.

Whether the SLA covers a VPN or a simple Internet connection, communication delays are nearly always referred to as "latency periods." A latency period is simply the amount of time -- measured in milliseconds -- that it takes data to travel from Point A to Point B. Typically, they range from 60 milliseconds to 85 seconds.

As you review your SLA, here are a few things to keep in mind:

1) Who's covered by the policy? What services do you need to order? And how long must the contract be?

2) What facilities does the policy cover? Increasingly, phone companies and ISPs are sharing lines and facilities. That means there's a greater chance that, should something go wrong, there'll be a lot of finger-pointing. You may not be able to ultimately prove who is responsible should an outage occur, but it doesn't hurt to have responsibilities spelled out in the contract.

3) What exactly is the credit policy? One full day for every 30 minutes missed? When is the credit assessed?

4) Will your business be credited for slow service? That may sound like nit-picking, but there's no sense in paying $150 a month for high-speed DSL service only to find out that poor communications infrastructure in your neighborhood reduces the speed by one-third or more. This is also an important question for small-office/home-offices that plan to use a cable systems, where service slows when traffic is increased.

5) How will you be notified if there is an outage in the network? Unless you're watching your Web site or VPN 24 hours a day, you may not know that you've been knocked offline. Some providers offer to notify users by telephone, e-mail, fax or pager within 30 minutes after determining the service is unavailable. And others promise to notify customers within 15 minutes.

By Kevin Ferguson in Boston


[an error occurred while processing this directive]

Business Week Home Bloomberg L.P.
Copyright 2000, Bloomberg L.P.
Terms of Use   Privacy Policy

Bloomberg L.P.
Media Kit | Special Sections | MarketPlace | Knowledge Centers
Bloomberg L.P.