New Networks Institute

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Click for EXECUTIVE SUMMARY (TEXT)

Click for ISP Survey Press Release

Putting the Survey into Perspective: 

FCC and DOJ Data Corroborates Findings

All surveys have caveats about their examination of a market, a trend, or customer perceptions and attitudes, and this survey is no different.

However,

  • Other corroborative data has recently been presented by the Department of Justice, (DOJ), the FCC and other groups which points to the seriousness of the problems ISPs are having with their local phone companies. This material substantiates and enhances the results from this survey.
  • To our knowledge, there is no other survey that examines the issues of ISPs and their relationship with their local phone company.
  • Specific state data from Texas, which had robust turnout of Texas ISPs, is virtually identical to the findings of the survey for the rest of the United States. As we will show, this gives significant balance to the data collected.

And finally, we consider the survey findings to show a clear pattern throughout the US --- Internet Providers are having serious problems with their local phone companies and it is impeding competition and the deployment of advanced networks. However, more work needs to be done by the regulators and government agencies to ascertain the full extent of the problems.

Let’s go through some of the obvious questions and issues.

 

  • 1) The First Validity Test: Other Government Data Closely Mimics the Survey’s Findings.
    •

    This survey was not done in a vacuum and there is a plethora of other related studies from numerous government agencies, (and all based on direct reports from the Bell companies), that tell similar stories, though from different perspectives.

    For example, SBC recently asked the FCC to give them permission to go into long distance in Texas. The Department of Justice has responded stating that SBC has not fulfilled its obligations and sufficiently opened its markets to competitors, which is a prerequisite requirement. The original DOJ document is at:

    http://www.usdoj.gov/atr/public/press_releases/2000/4158.htm

  • "The Department found that SBC has not shown that it is providing nondiscriminatory access to its local lines," said Joel I. Klein, Assistant Attorney General in charge of the Department's Antitrust Division. "Nondiscriminatory access is required for us to find that the market is open to competition." (DOJ press release, 2/14/00)
    •

    And virtually every service area had a problem. The DOJ found that SBC services for competitors were ‘below… minimally acceptable" standards.

  • "The Department said that SBC's performance in providing voice loops was below the level that the FCC described as "minimally acceptable" when it approved Bell Atlantic's application to provide long distance service in New York." (DOJ press release, 2/14/00) [emphasis added]
    •

    This means that everything from voice services or DSL was not delivered adequately.

  • "In addition to a failure to provide nondiscriminatory access to DSL and voice loops, the Department also expressed concerns about SBC's provision of interconnection trunks to facilities-based competitors." (DOJ press release, 2/14/00)
    •

    All of this impacts the ISP. Imagine that you’re an ISP ordering or installing or maintaining your services in this environment. These are the identical problems outlined in the Survey. Here’s some specific examples. In the first, SWBT (Southwestern Bell Telephone) favored their own service over CLEC (competitive Local Phone companies) 92%, "missed dates because there was no facilities had a 1000% differential skewed in favor of the Bell, while the number of problems ---"Trouble Reports" was 200% better for the Bell.

    (Please forgive the indulgence of these long quotes. However, these sub-standard services should be understood for what they are--- the ISP relies on the Bell or the CLEC for their service and in each case, the ISP is effected, and this problem is statewide effecting ALL Texas ISPs.)

     

    CLEC

    SWBT

    DIFFERENCE

    Percent SWBT Caused Missed Due Dates

     

    12.1%

     

    6.3%

     

    92%

    Percent of Missed dates because of Lack of Facilities

     

    6.7%

     

    .6%

     

    1,016%

    Average Installation Interval DSL

     

    19.3 Days

     

    11.5 days

     

    68%

    Percent DSL [Trouble] Reports"

     

    15.8%

     

    5.2%

     

    203%

    Trouble Report Rate [For DSL Loops]

     

    7.7%

     

    4.6

     

    67%

    Here’s the details for this data:

    • "Percent SWBT Caused Missed Due Dates "One of the most significant measures for DSL provisioning is ("Percent SWBT Caused Missed Due Dates"), The measure shows a rate of 12.1 percent missed due dates for CLECs in December (on a total of 495 loops), compared to 6.3 percent missed due dates for SBC's retail service. This result is especially troubling because the number of missed due dates has steadily increased over the last three months as the number of CLEC orders has increased -- although the total number of loops is still far below expected commercial volumes."
    • "Percent Missed Due Dates Due To Lack of Facilities [>30 days]") measures the percentage of loops where SBC missed a committed due date by more than 30 days and attributed the miss to an absence of available facilities. SBC missed 6.7 percent of due dates for CLECs (on a total of 495 loops) compared to only 0.6 percent for SBC's circuits."
    • "Average Installation Interval DSL i a measure of the time from completion of loop qualification to the completion of the service order. For December, the average interval for conditioned loops was 14.23 days for CLECs compared to 11.50 days for SBC. This difference was not statistically significant, but, as noted previously, there are serious questions about the accuracy of the data for PM 55.1 arising from the large number of excluded orders. The results reported for December represented a significant improvement over the results for November which were 19.30 days for CLECs and 11.50 days for SBC."
    • "Percent DSL [Trouble] Reports is a high measure that tracks the percentage of trouble reports for newly installed DSL loops. SBC tracked 398 DSL loops used by CLECs for December, which had a 15.8 percent rate for trouble reports, compared to a trouble report rate of only 5.2 percent for SBC. This performance deteriorated badly as volumes increased in December."
    • "Trouble Report Rate [For DSL Loops] is a measure of the monthly repair rate for all installed DSL loops.(53) In December 1999, SBC reported 75 trouble reports on 974 CLEC circuits, a 7.7 percent rate compared to a 4.6 percent rate for SBC's retail lines. This measure also shows decreasing performance over time as volumes rise."

    Considering that Texas is supposed to be one of the states that is farthest along in providing competitive services, then one has to imagine what the other ISPs in the rest of America are receiving.

    Even the "minimally acceptable" standards by the FCC and DOJ are still a far cry from anything that would be considered acceptable by a company trying to run a business. The DOJ report for Bell Atlantic’s entry into Long Distance in New York 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, and CLECs have alleged that levels of inaccurate confirmations are in that range or even greater. 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, 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).

    "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. 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"

    •

    And this costs the CLEC (and ISPs) 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."
    •

    There are a great many state and federal studies that clearly show this same pattern of unsatisfactory Bell services to competitors. For example, information supplied by Bell Atlantic to the FCC for its compliance to the law in regards to the Bell Atlantic-NYNEX merger (presented March 2000) all indicate that the problems found in this Report are not isolated incidences, but common throughout the Bell system. See:

    http://www.fcc.gov/ccb/asd/BA_NYNEX/perfMonGraphs.html

    NNI’s other reports also independently found the similar problems. NNI filed with the New York Attorneys General, with the assistance of New York ISPs over the Bell’s predatory pricing of DSL and their problems of supplying adequate services. This material was documented by the ISPs and their customers. In a whopping 30% of cases, Bell Atlantic didn't show up for the installation, and the customer waited a full day for their DSL circuit. To add insult to injury, 1/3 of these customers have a second or even third no-show by Bell Atlantic.

    • 75% of all orders have problems.
    • 30% of all order don't show,
    • 1/3 of them have no-shows two or more times.

    See: http://newnetworks.com/baadslscrewisp.htm

    Therefore, though the findings of our survey were surprising, they are supported by collaborative data

     

    2) Survey Design

    The survey used to examine Internet providers and their relationship with their local phone companies had its roots in two earlier, New Networks nationwide phone-based consumer surveys, designed and implemented by Fairfield Research. This research was invaluable in being able to ascertain what 'acceptable' customer services were--- and develop a baseline for judgment. For example, on a scale of one to ten, consumers gave the local phone companies grades of 8.3 for overall customer services, while ISPs in our survey gave the score as 3.7 --- and unacceptable grade.

    Using the consumer survey as the baseline, New Networks worked with Internet Providers to add additional questions specific to ISPs, and a pilot survey was launched 4th quarter 1998.

    This survey was then further enhanced with additional questions added with the help of the USISPA (United States Internet Service Provider Alliance) and CIX, Commercial Internet eXchange and relaunched 4th quarter, 1999.

     

    3) Sample Size

    This report was based on a sample size of approximately 1% of the estimated 7000 ISPs. To put this into perspective, most consumer surveys usually contain 1,000-1,200 respondents to represent the 98 million households (270+million people).

     

    4) Sub-Analysis--- A Separate State Sample For Texas Gives Some Balance.

    Texas had the largest representation, accounting for approximately 5% of Texas ISPs (Texas has 518 ISPs according to TISPA (Texas Internet Service Provider Association)) This state sample clearly shows that the state information matched the overall sample.

     

    5) How the Survey was Administered
    The survey was based on a mailing by the United States Internet Service Provider Alliance. which asked ISPs to leave their e-mail at the USISPA site. They were then contacted again to fill out the survey. During January, this was augmented through the posting of on lists.

    NNI was not responsible for generating the survey responses. Our job was to design the survey, analyze the data and create a report.

     

    6) Web Site Vs Random Phone Interviews.

    There are numerous caveats to any survey methodology. In-depth interviews with ISPs throughout America have not revealed that this is the case, and therefore we do not expect that there is a major shift in the findings. We believe that overall, ISPs have been and continue to encounter problems, and other survey methods might reveal more nuances to the problems, however they would not dramatically shift these findings.

     

    7) Next Steps
    We consider these findings to present more than simply anecdotal stories. We contend that this area warrants a thorough investigation by the FCC, the Department of Justice, Congress and the state Commissions. Competition and our Digital Future is at stake.

    We continue to work with ISPs to do further data collection. Anyone interested in this work should contact NNI at survey@newnetworks.com