Sprint Debuts on Broadway: Enter, Reselling

Posted: 01/2000

Sprint Debuts on Broadway: Enter, Reselling
By Ken Branson

If you can make it in New York, the old saw says, you can make it anywhere.
At least Sprint Corp. (www.sprint.com),
having entered the local service market in the state of New York as a CLEC,
thinks that Albany, Buffalo, Long Island and Syracuse should be no problem.
Sprint now offers a bundled local and long distance product to residential
customers in all those places.

"We’ve had a real good reception from our customers, pretty much as I
expected," says Sheila Lane, Sprint’s director-CLEC program management. New
Yorkers are sick of paying for every call. We give them the opportunity to take
the payphone out of their living room."

Like many a CLEC before it, Sprint has entered New York as a reseller. Unlike
most CLECs, however, Sprint has the money in its cash drawer to go out and buy
and install a switch. So why doesn’t it do so? Carl Garland, principal
analyst-networks services at Current Analysis (www.currentanalysis.com),
thinks that might have been the wiser move.

"Now, if your only business is reselling, your business plan is built
around resale," Garland says. "But Sprint is not a reseller. I can’t
imagine that they will be content to lease the whole of the local loop and
switch when they have lots of money to deploy their own."

If Sprint did buy and deploy a switch or two, it would be following a
well-worn CLEC path. Lane insists that Sprint, instead, will take the road
considerably less traveled.

"We have looked at the local market for a long time, and have a business
plan, and fully intend to migrate to a UNE-P scenario within a year or so,"
she says.

UNE-P (unbundled network element platform) is an arrangement available only
in New York state in Bell Atlantic Corp. (www.bellatlantic.com)
territory. Under UNE-P, a carrier promises the ILEC a certain percentage of its
traffic in return for a much deeper discount than the usual 14 percent to 25
percent permitted under traditional resale agreements, and ready access to
enhanced services usually only available a la carte.

BellSouth Corp. (www.bellsouth.com)
has an aggressive, territory-wide UNE-P initiative, intended to keep competitive
networks from being built in its nine-state territory. (See related story on
page 72). However, Bell Atlantic, whose officials decline to say how many UNE-P
customers they have or even what kind of carriers those customers are, has only
tariffed UNE-P in New York. Jeff Ward, Bell Atlantic’s vice president-regulatory
affairs, says the company will file UNE-P tariffs in other states, but can’t say
when or in which states.

Though Bell Atlantic and BellSouth are the only major ILECs to offer UNE-P
now, Lane is sure others will do so. And when they do, she says, Sprint will
consider using the same approach in those states.

"It really depends on how quickly the other states and RBOCs provide a
UNE-P product, reflective of the true cost of providing service, plus a
reasonable profit," she says. "And we hope that’s really soon."