Level 3 Trims Master Agent Roster to 4

By Khali Henderson

Level 3 Communications Inc. revamped its master agency program, reducing its numbers to four in an effort to more effectively allocate resources within its Business Partner Program, according to Craig Schlagbaum, vice president for indirect channels for Level 3. The change was effective June 1.

Level 3’s “official” master agencies now include Intelisys Telecom Solutions, World Telecom Group, MicroCorp Inc. and Telecom Brokerage Inc.. The company had as many as 10 master agencies. In addition to the four mentioned, these included AB&T Telecom, Business Communications Management, Communication Management Services, PartnerTel Inc., Venture Group Enterprises and X4 Communications LLC. Schlagbaum said some of these companies left the program previous to the recent change, but he did not provide specifics.

Schlagbaum said the decision to trim the master agent roster was motivated in part by concerns the carrier had about share shifting, wherein subagents would take the same deal and shop it between master agents for the best commission. In addition, the company hopes to get more traction by “doubling down” its efforts to support fewer master agents, Schlagbaum said.

He explained that the four official master agents were chosen based on their historical production, solid back office and national scope. These four will receive the most favorable commissions and local support for their subagents. “It’s a different strategy from a distribution model, but one we think will provide greater value to the channel, greater value to the masters that are producing for us and greater value to us as well,” Schlagbaum said.

The masters who were dropped were notified of changes to their agreements either for convenience or, in some cases cause, e.g., failing to meet volume commitments, Schlagbaum explained. These agencies either have discontinued their relationships with Level 3 or changed their status to direct agents. In the latter instance, their subagents do not get local support unless they are in the same local area as the former master. In either case, the existing base is not impacted and the agents will continue to get paid based on the terms of their original agreements, Schlagbaum said.

He added that some of the former masters are hoping to “earn” their way back to “official” status, but the company has not set specific thresholds for doing so and the decision will be made on an individual case basis.

“I want to be clear on this point: We are not limited to four [master agents] and only these four into perpetuity,” Schlagbaum said.

One cut master agent, speaking anonymously, said there is one thing Level 3 and the agent’s company agree on: The carrier did not provide enough support to the subagents. That’s part of the reason some masters already left the program, the agent added. Those that want to continue as direct agents are not incented to do so, the agent said, because the terms and conditions in the direct agreement do not sufficiently protect agent revenue streams or contracts. The agent claimed requests for modifications were not considered by Level 3. The intransigence will force these agents to sell under the four “official” master agents when and if they quote Level 3, the agent noted.

The agent said with the departure of some of the key channel staff – Director National Partner Sales Bob Czech, who went to One Communications Inc., and Vice President of Sales Mike Jerich, who went to Global Crossing Ltd., in particular – the spirit of partnership common during Level 3’s rocky integration period has diminished. “We are just a spreadsheet and a contract now,” the agent said.

The official master agents, however, understandably are pleased with the changes. “We at MicroCorp are honored to have been selected as one of Level 3’s four master agents,” said Jack Knocke, COO for MicroCorp. “We’re very enthusiastic about Level 3’s positioning with their expanded product set and their continued focus on process improvements based on key milestones and metrics. While there have been struggles, they’ve been able to demonstrate year-over-year and quarter-over-quarter improvements for the past 24 months which builds confidence among agents and customers alike. They have the right focus on improving processes that are customer impacting.”

Ken Mercer, senior vice president at TBI agreed. “The time frames and support structure for install, and resolution of issues has greatly improved,” he said.

Schlagbaum said Level 3’s most recent quarterly channel survey returned the best scores to date, with C grades improving to Bs and As. He would not divulge the rankings by area. “What it tells us is that it’s easier to do business with Level 3 than it’s ever been,” he said.

At its Business Partner Advisory Council meeting last month, Level 3 detailed its efforts to become “easier to do business with,” including incorporating all of its services into its MasterStream quoting tool, which will be completed in mid-July. The carrier also is finalizing enhancements to its customer portal that have been in the work for three years. This allows agents to check customer status and submit trouble-tickets. Moves, adds and changes are expected to be enabled by mid-summer, Schlagbaum said.

The company also has stepped up its efforts in local markets, such as Denver, Seattle and Washington D.C., where it has added resources (direct sales and indirect sales support) as well as increased its marketing and PR. The plan is to continue to add resources in cities around the country, Schlagbaum said.

“I was very pleased to see that Level 3 is doing everything they can to help make the agent program a lot more successful,” said Mercer. “They are allowing off-net sales, local service, DS1 MPLS orders, aggressive long-distance rates, and a much more focused support structure. All in all it’s a whole new positive experience. Quotes are easier to get, and will be even better in the future as they add all products to their portal. The regional channel management support is going to be very good for all of our agents.”