Alternative local lines offered by local carriers

Most phone calls by consumers or businesses are carried across ordinary POTS lines, trunks, or Centrex lines. However, local carriers do have alternative offerings such as WATS, T-1, T-3, ISDN, dedicated private lines, DSL, X.25, frame relay, and tie lines. I will explain how some of these services can be beneficial for voice calls in this section.

WATS
Wide-area telecommunications service (WATS) was originally offered by AT&T prior to divestiture. It was designed for high-volume long-distance users and was more of a bulk pricing service than an alternative technology. It came in two varieties: In-WATS, the precursor to toll-free calling, and Out-WATS.

Long-distance carriers have moved their customers away from WATS service, but the local carriers are less proactive. A customer who used WATS service for intralata calling 10 years ago might still have monthly billing for the service. A good portion of the WATS service today is inactive. Customers now use direct dial long distance and 800 services from their long-distance provider. If customers fail to cancel the WATS service, even though it is not being used, they may still be paying a hefty recurring fee of up to $500 each month for it.

Cancel WATS service
The reason this antiquated service is addressed in this book is because one in ten large businesses still has a WATS line. WATS lines were originally a great idea because they lowered a customer’s cost for long-distance calling. With the decline of long-distance pricing over the past decade, most WATS lines should be canceled and regular long-distance calling should be used. The cost of direct dial long distance today is much lower than WATS pricing.

T-1 for local service
Local carriers have struggled to increase their network capacity to keep up with ever-increasing call volumes. The demand for lines is also rapidly increasing. Carriers are now using technologies that allow more phone calls to travel across the same number of phone lines. T-1 service accomplishes this objective by using multiplexing technology, which is a method of cramming multiple phone calls across the same phone line at the same time.

A T-1 is a dedicated connection between the customer’s premise and the carrier’s central office. A T-1 has 24 distinct channels for calls. It can carry 24 voice or data conversations at the same time. The 24 channels are multiplexed across four wires (which is the same physical capacity as two POTS lines). Because less of the carrier’s network is used, local carriers are able to offer high-bandwidth T-1 service at a fraction of the cost of the same bandwidth across multiple POTS lines.


Multiplexing technology.

Saving money with a local T-1
Because the T-1 can handle 24 simultaneous calls, it can theoretically be used to replace 24 local trunks or POTS lines. PBX trunks typically cost $60 per month, but T-1 service is available in most markets for less than $500 per month. (Exact T-1 pricing is determined by the actual mileage from the central office to the customer’s premise.) Using these figures as a guide, the break-even point is about 10 phone lines. Factoring the “pain of change” into the equation, a business with 15 or more trunks should definitely consider switching to T-1 service.

These monthly savings are significant, but this is an often-overlooked cost management measure. An organization’s financial managers need technical expertise to handle the T-1 conversion. The company’s technical managers are often too busy with new technologies to be concerned about upgrading a low-tech service such as trunk lines, especially if the current service is functioning properly. Once you have done your own T-1 cost study and determined that it is beneficial, then it is time to pursue a technician, such as your PBX maintenance company. The technicians can tell you exactly what needs to be done to your equipment to upgrade to T-1 service...