Best of the ISP-Lists

Resellers Really Run Rapacious Rates

Members of the ISP-Bandwidth list discuss timeless methods for finding a better price for a T1 line. These days, your local telco is so large that it probably has several divisions offering different prices.

[September 25, 2001]

On the ISP-Bandwidth list in September, BS queried,

"I've got an offer for a very good price on a T1 from a reseller: they're offering me the same circuit I could get from the provider for half of what it would cost through the provider. The contract is with the provider, not the reseller. I ran it by the provider, and the rep I spoke with said they couldn't match the price. How does this kind of thing work?"

JM advised caution:

"If a direct rep cannot match the price, something is fishy. I do not know of any arrangements, past or present, that allow anyone to buy bulk bandwidth and get you better pricing without the reseller doing the billing themselves. Something is not right."

A number of respondents said it's all about finding the hidden route to the best deal:

[TC offered] "What you've uncovered is an alternate sales channel within the underlying provider's company. Quite often, national carriers will have retail, wholesale, agent, and affinity channels to maximize their coverage, and each group has their own pricing and support points. This is one of the benefits of dealing with an agent or reseller: they can secure a good rate from national carriers. If the carrier accepts the contract at the rate and terms you were quoted, you can feel confident the carrier has a support group to back you up."

[SK agreed] "When purchasing bandwidth, make sure that you sign the carriers' contracts for services, not the resellers' or agents'. This will ensure that you, the customer, are supported in the same way as the other customers; you're just not paying the 'rack rates'. Some of the premier agencies will offer a third level of support if needed; if they are a carrier endorsed agency, they will have strings to pull for you."

Others suggested that this is all part of industry-wide consolidation:

[RW observed] "We approach carriers every month requesting special pricing for our clients, including waived install fees. It is my experience that most providers will accommodate our clients to win the business. I spend as much time with 'business development' staff as I do with my sales reps. The most surprising aspect is that the services included with bandwidth continue to improve."

[JR agreed] "A couple of years ago, I worked at a smaller regional ISP and told my then-employer that I saw a consolidation coming, the results of mergers, buyouts, and bankruptcies, with the result being fewer but stronger players in general. Most industries have gone through this, including mortgage banking and the like."

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