The RBOC lands a solid DSL deal with a major PC-maker, introduces a fractional T3 program for ISPs, and stands accused of monopolistic business practices—along with Qwest Communications. So why is AT&Ts raining on their parade in Florida and Minnesota?

by ISP-Planet Staff [March 23, 2001]

BellSouth unveiled a unique service for ISPs this week designed to bridge the gap between T1 and T3 connections. Subrate T3 Frame Relay allows users to set their own connection speed by increasing or decreasing the Mbps rate as a company grows or, as the case may be, downsizes.

BellSouth's Subrate T3 service can be purchased at a fraction of the cost of installing multiple T1 lines or going to the expensive T3 option, making a difference of a couple thousand dollars per month. The service made its debut this week throughout the Atlanta-based company's 9-state service area.

Breaking middle ground
According to industry analysts at IDC, BellSouth is the first company to offer such a bandwidth-on-demand, middle-ground pipe. IDC research indicates that there is a strong trend in the U.S. frame relay market to secure higher port speeds. In the local frame relay market, IDC expects fractional T3 ports to grow by a 63 percent compounded annual growth rate over 5 years.

The new frame relay service provides customers with bandwidth on demand from 3Mbps up to 44.2Mbps. And according to Joe Spencer, a BellSouth product manager of frame relay technologies, it's a wonder no one ever made an effort to offer such a package before.

"Our customers' employees have DSL and cable modems at home," Spencer said. "Then they come to work and they're expected to be satisfied sharing 128 kilobits with 50 people. It's no wonder so many people wish they could work from home, when a difference like that exists."

The advantage, especially for ISPs, is that T3 connections just became an affordable option for smaller businesses. The price of the service is based on a pay-as-you-use scale. For example, if a company expands its staff and needs to bring its connection from 3 Mbps to 6 Mbps—the equivalent of 4 T1s—they might be paying in excess of $3000 per month for such an upgrade. With BellSouth's Subrate T3 service, the cost would be $2045 for 3 Mbps and $2145 for an upgrade to 6 Mbps. However, there is a $500 charge to install the upgrade.

Spencer said that BellSouth brings a full T3 to the customer's premise and then throttles it back the speed to meet their needs.

"Whereas the other carriers are trying to put more T1s together, we're giving customers the bigger pipe to start with," Spencer said.

Miami-based WebUnited picked up BellSouth's fractional T3 service as soon as possible. Steve Harris, WebUnited chief operating officer said that the service is a a true bandwidth-on-demand product without the time constraints normally associated with bandwidth expansion.

"As an Internet Service Provider, we have embraced the new Subrate T3 product released by BellSouth," Harris said. "The Subrate T3 has provided unlimited bandwidth potential for our customers that have maximized usage of standard T1 or multiple T1 connections."

BellSouth's Subrate T3 service offers frame relay customers many new options. Customer benefits include:

• Bandwidth control: Giving customers control of their network
• Rapid scalability: Allows business to develop and grow
• Short provisioning intervals: Eliminates lengthy delays during growth cycles
• No additional CPE purchases when increasing speed: Offers cost-effective growth
• Fewer facilities: Provides targeted trouble shooting

The Subrate T3 availability adds to BellSouth's opening of their first e-business centers in Atlanta and Miami, and joins a data platform that includes about 3.5 million miles of fiber optic cable, 1,650 central offices, 50 BellSouth Managed Facilities, 17,000 SONET rings and over 500 fast-packet switches.

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