Bell Atlantic Owes DSL Customers and ISPs a Large Sum of Money:

===================================================================

OUR DIGITAL FUTURE:
A SERIES of EXECUTIVE REPORTS

REPORT #2

Bell Atlantic is Supplying Sub-Standard Customer Services to DSL Internet Providers and Their Customers:

A Model For ISP And Customer Compensation Because Of Bell Atlantic's Failures.

Presented by:
Bruce Kushnick

New Networks Institute

826 Broadway,

Suite 900

New York, NY 10003

www.newnetworks.com

Copyright, 1999 All Rights Reserved

Bell Atlantic is Supplying Sub-Standard Customer Services to Competitive DSL Companies, Internet Service Providers and Their Customers
A Model For ISP And Customer Compensation Because Of Bell Atlantic's Failures.

Imagine calling up an ISP to place an order for DSL, and the phone company does not show for the scheduled installation.... and you've waited home for the entire day. Then imagine having this happen more than once.

Today, Bell Atlantic is not fulfilling its obligations to its customers that are trying to get DSL service from the local Internet Service Provider (ISP) (supplied by a competitive DSL company, known as a CLEC)., as mandated by the Telecom Act of 1996.

The problems are staggering. In a survey of ISPs, as well as supported in part by the U.S. Department of Justice's recent study of Bell Atlantic, in New York fully 3 out of every 4 orders (75%) has a serious problem that significantly delays the customer's service.

In a whopping 30% of cases, Bell Atlantic didn't show up for the scheduled installation, and the customer waited a full day for their DSL circuit (loop delivery). To add insult to injury, 1/3 of these customers suffer a second no-show by Bell Atlantic.

75% of all orders have loop delivery problems that delay or prevent service.
30% of all orders Bell Atlantic doesn't don't show when scheduled,
1/3 of these have second and third no-shows (approx. 10% overall).
Over 15% of all NY customers who place orders for competitive DSL are ultimately denied DSL service, because Bell Atlantic network is unable to deliver it often claiming they have "no facilities".
The other losers in this chain are the Internet Service Providers and competitive DSL companies that have to spend large amounts of staff time to fix these problems. In fact, we found that approximately 15% of all orders placed are canceled despite the fact that the DSL provider has invested money for collocated equipment and rented floor space in the phone company's Central Office (CO) for the opportunity to reach all customers served form a given CO. Entrepreneurs like CLECs and ISPs are therefore wasting hundreds of work hours trying to deliver advanced broadband network services.

But the really sad part is that these problems are happening in the very center of the Internet/Web/financial services world -- New York City. The service delivery problems we are discussing are happening throughout the city including Midtown, Wall Street, and Harlem , even he Empire state Building. Bell Atlantic New York, is allegedly the state of the art telecommunications infrastructure --- imagine what it will be like for low income or rural households.

Paying Compensation Will Not Only Fix The Competitor Problems… It Should Also Make The Customers Whole.

What should happen: ISPs and their customers should receive compensation for the Bell Atlantic's' failure to deliver its network services. If a customer spends an entire day waiting for the phone company... taking off from work, and the bell technician doesn't show for a scheduled appointment, shouldn't the customer be compensated for their time? Similarly, if a company orders a circuit and it still doesn't work for days, shouldn't the ISP be compensated? And if customers cancel because of errors or delays by the phone company, shouldn't the competitive company be compensated?

As we stressed in the our complaint with the NY Attorneys General Offices, The department of Justice recently concluded that Bell Atlantic should not be allowed into long distance at this time because they have failed to properly open their networks to competitors. The department wrote:

These considerations lead us to the conclusion that a BOC should not be permitted to offer in-region interLATA services as long as important constraints on local competition remain. It is, therefore, our judgment that Bell Atlantic should not be permitted to offer such services until it demonstrates that it has solved the existing problems in its provision of access to unbundled network elements.

Yet, as the Department of Justice clearly shows, when it comes to the treatment of competitors trying to roll out DSL, Bell Atlantic is unable to offer basic services to competitors.
- "As to Bell Atlantic's historical performance in provisioning DSL loops, we are unable to conclude on the current record that Bell Atlantic has demonstrated an acceptable level of performance."
NNI's independent findings more than substantiate the DOJ report. The DOJ report found that 30 to 40% of all order confirmations to the CLEC were inaccurate while over 80% of all orders required some form of manual processing:"
- "…when Bell Atlantic does return order confirmations, a substantial portion of those confirmations are inaccurate. Bell Atlantic has acknowledged in NYPSC proceedings that as many as 30 to 40 percent of confirmations are inaccurate,(30) and CLECs have alleged that levels of inaccurate confirmations are in that range or even greater.(31) Moreover, it appears that as Bell Atlantic struggles to improve its performance in returning manually processed order confirmations and rejections more quickly, its accuracy suffers significantly. In September, Bell Atlantic improved its combined UNE-P/UNE-L on-time performance for confirmations and rejections,(32) but only 42 percent of manually processed orders were correctly submitted by Bell Atlantic personnel to Bell Atlantic's provisioning systems (significantly down from only 64 percent for August).(33)
  "These problems with late and inaccurate order confirmations appear to be the result of a high degree of manual processing of hot-cut orders at the ordering stage.(34) In August, more than 83 percent of unbundled loop orders required manual processing of some kind by Bell Atlantic employees, and the problems with late or inaccurate confirmations and rejections appear to arise almost exclusively in connection with these manually processed orders"
This costs the CLEC (and ISPs) substantial money and time.
- "The high level of slow and inaccurate manual order processing imposes significant costs on CLECs, which must devote time, effort and expense to identifying and rectifying problems in order to ensure that orders ultimately are processed correctly."
In short, the Bell is supplying sub-standard customer services and ISPs and their customers are being unfairly harmed.

Compensation to ISPs and their Customers.

NNI is suggesting a simple compensation model: based upon bell Atlantic's own prices for work done -- $90 dollars per hour. All figures are based on a 250 line average per ISP.

EXHIBIT 1
- Payments of Compensation for Bell Atlantic’s Failures.

Due to Customers:

75% of all orders have problems, half day at $360 (4 x $90):

$ 84,375

30% of all orders have a no-show, full day at $720 (8 x $90)

$54,000

1/3 of those have two or more no-shows (10% overall)

$18,000

Customers Are Owed (total for 250 customers)

$156, 375

average per customer:
$625.50

Due To Internet Service Providers (ISP)

15% Bell Claims there's no facilities

$37, 000

12.5% of all orders are canceled due to bell Atlantic

$93,720

65% of all staff time is dedicated to fixing Bell's problems

$21,000

ISPs ARE OWED (each, on average):

$151,720

Due To An Internet Service Provider (ISP) and Their Customers

Customers Are Owed (total for 250 customers)

$156, 375

ISPs ARE OWED (each, on average):

$151,720

Total Per ISP and their Customers

$308, 095

Due to Customers:
75% of all orders have problems, half day at $360 (4 x $90):	$ 84,375
30% of all orders have a no-show, full day at $720 (8 x $90)	$54,000
1/3 of those have two or more no-shows (10% overall)	$18,000
Customers Are Owed (total for 250 customers)	$156, 375
average per customer:	$625.50

15% Bell Claims there's no facilities	$37, 000
12.5% of all orders are canceled due to bell Atlantic	$93,720
65% of all staff time is dedicated to fixing Bell's problems	$21,000
ISPs ARE OWED (each, on average):	$151,720

Customers Are Owed (total for 250 customers)	$156, 375
ISPs ARE OWED (each, on average):	$151,720
Total Per ISP and their Customers	$308, 095