Business News - Network One, BellSouth Sign UNE-P Deal

By Khali Henderson

Posted: 12/1999

Network One, BellSouth Sign UNE-P Deal
By Khali Henderson

Network One, Atlanta, has made a deal with BellSouth Interconnection Services, Atlanta,
for unbundled network element (UNE) combinations and associated intelligent network and
operator services under the Bell company’s UNE platform (UNE-P) throughout its nine-state
region in the Southeast. The deal is valued at $500 million over the life of the
seven-year agreement and is believed to be the largest such agreement between a Bell
company and a reseller.

Spokesmen for Network One would not reveal the details, such as number of lines
committed or discounts received, of the private service agreement between the two
companies, except to say that it was "aggressive" commensurate with the large
dollar commitment. Publicly, BellSouth has said that it offers UNE-P agreements with steep
discounts averaging 40 percent depending on the market in exchange for a
three-to-seven-year contract and a commitment of 70 percent to 90 percent.

Gene E. "Skip" Lane, Network One president and CEO, says that the concern
about competitive local exchange carriers (CLECs) undercutting discounted Bell pricing are
exaggerated. He says the company found in its research that 40 percent discounts were not
the market and that CLECs typically discount 10 percent to 20 percent off Bell rates.
"They are selling the bundle, not just price," Lane says.

Lane says the agreement "permits Network One to look, feel and act like a
facilities-based competitive local exchange carrier without having to purchase, install,
cut over and maintain a local network."

"It immediately gives us a profitable local dial tone product throughout the
Southeast without the delay and expense associated with facilities buildout," he
says.

In addition to basic dial tone, BellSouth will provide Network One with access to
existing and forthcoming advanced intelligent network (AIN) and signaling system 7
(SS7)-based services, such as calling name and messaging (CNAM) and asymmetric digital
subscriber line (ADSL).

In anticipation of the deal, Network One has opened four new sales offices–Charlotte,
N.C.; Jacksonville, Fla.; Atlanta; and Birmingham, Ala.–within the last 120 days. Six
more are planned for 2000. Additionally, the company’s deal announced earlier this year
with master agency Microcorp, Altanta, gives Network One 600 agents in the BellSouth
territory. The company plans to train these agents over the next six months.