Rural Carriers Mooove Into Industry Spotlight

By Paula Bernier Comments
Posted in Articles
Print

Beehive Telephone has just 20 central offices in remote parts of 11 counties. Paved roads are at a premium in the outposts of Nevada and Utah where the company operates, and it takes at least a mile of line to get local loops to each of its customers. Yet small rural telcos like Beehive recently have moved into the spotlight as the telecom industry looks for good news stories and as equipment companies search out increasingly scarce sales opportunities. Another key reason the industry is so hooked on these small fry is rural carriers have access to low-interest loans and grants through the U.S. Department of Agriculture's Rural Utilities Service (RUS).

As they might say in these parts, RUS is as old as the hills. What's new is the interest and awareness building around RUS and the number of communications equipment vendors scrambl-ing to get their products RUS certified. RUS did not respond to multiple calls and e-mails from xchange seeking information on the number of RUS applicants, but many companies including Gluon Networks and Taqua, in recent months have announced they have received or are seeking RUS approval.

Getting products RUS certified is no easy task. It requires a good amount of paperwork, technical presentations and, in many cases, six-month-plus service provider trials.

Indeed, it took equipment company Taqua about a year-and-a-half to win RUS certification for its OCX Class 5 switch alternative product. Taqua CEO Charlie Vogt says it was worth the effort, adding, "RUS is table stakes in this market." (For more on Taqua's efforts to appeal to independents, see this month's story on Class 5 alternatives, page 10, and xchange November, page 6.) As Chuck McCown, general manager of Beehive Telephone, remembers it Beehive Telephone made the first pass at Taqua to get a RUS trial going. That, he says, was at a time in which CLECs were still in favor, but "we bent [Taqua's] arm enough to make it happen."

Beehive was in need of a new switch vendor, McCown says, because "our switches could not do what we needed them to do." Harris, the carrier's switch vendor at the time, said it planned to offer equal access, CALEA, SS7 and other features, but failed to deliver, according to McCown. Beehive thought switches from Lucent and Siemens were too big and Mitel was leaving the business, he says. "Nortel was saying publicly it would sell its product line [in which Beehive was interested] and then it would retract that a month later," McCown says. "That doesn't give us a warm feeling."

Searching out other options, McCown says he started looking into Taqua after his former Harris contact told him he was thinking about going to work for the vendor. "So I went on the Internet and, yeah, it really looked good," says McCown, who says he himself is a highly technical person who "could design a switch from the ground up if I had to." Beehive began discussions with Taqua, but because the carrier is a RUS borrower it had to make sure the Taqua products were RUS certified before it went much further. So Beehive, Taqua and Midstate Consultants, a professional engineering company in Utah that Beehive uses, initiated a six-month field trial for which they pulled Beehive's old switches and replaced them with Taqua gear, says Dale Dunning, Taqua's manager of contracts and the vendor's resident RUS specialist. Following the trial, Taqua applied to Committee A of RUS for acceptance, and the committee "without hesitation gave us our listing," says Dunning, adding that the OCX was the only switch in two years to receive listing on the Class 5 sheet and the first next-generation switch to be RUS listed. The company has to return to Committee A for review of each new release.

"I don't think Taqua realized the magnitude of commitment of getting RUS [certified]," says McCown. "The CLEC industry was still raging."

But the timing couldn't have been better in light of the CLEC shakeout that happened in the interim, following which many equipment companies were searching high and low for potential customers to counterbalance the lost CLEC opportunity and cutbacks in capital spending by the Bells and other big carriers. Independents like Beehive have been at least part of the counterbalance for companies like Taqua, from which Beehive purchased 10 switches.

Even companies like ADTRAN, which is a long-time equipment company that has had significant success with large service providers, is going after the rural telcos. The equipment company recently began a marketing campaign focused on the independent local exchange carriers. While these smaller incumbents have long been part of the vendor's customer base, ADTRAN only in the past nine or 10 months has been working diligently to help educate rural carriers about how its products can fit into their networks, explains P. Steven Locke, vice president of marketing at ADTRAN's carrier networks division. (For more on that effort, Click Here).

Because the company's Total Access solutions are already widely used in service provider networks, a service provider trial of ADTRAN's products was not necessary for the company to get its goods RUS certified, explains Locke, who says his company has one of the broadest RUS certifications.

ADTRAN started its RUS filing in the February/March time frame and won RUS certification in April, he says.

David Williams, market manager for ADTRAN's carrier networks division, says RUS required a lot of paperwork, including technology documents, lists of carrier labs that had tested its products and service provider references. ADTRAN also had to do a technical presentation for 20 members of the RUS staff. "RUS is behind the theme of universal service," says Williams, "so [the product] has to make sense economically for the independent."

However, once equipment companies attain RUS approval, things with independent telcos tend to work at a pretty rapid clip.

"The independent, you might go in and have lunch with them and tell them something new and walk out with a purchase order," says Williams. "That's not to say they're irresponsible, but they do have shorter decision-making cycles [compared to the Bells]."

Comments