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Covad To Credit Busted SLAs

Covad Communications, in the middle of a nationwide T-1 expansion campaign for businesses, announced Tuesday revamped service level agreement (SLA) guarantees.

The SLAs are an extension of Covad's existing guarantees, which covered only its own network, and may be a relatively risky move for a company looking to garner more business-class customers.

While the guarantees don't promise anything Covad doesn't already handle on an unofficial basis (or can't guarantee because they don't own the entire network), at least business-class customers using the data competitive local exchange carrier's (DLEC's) TeleXtend and TeleSpeed services will get credit for network shutdowns and laggy data speeds.

Abhi Ingle, Covad vice president of marketing, said the deal is good for both Covad customers and customers going through an Internet service provider (ISP) middleman -- Covad's wholesale division.

"Our goal has always been to get customers up and running fast, keep their services running reliably and ensure a first-rate experience with their broadband connections," he said. "These new agreements are proof that we stand behind these commitments."

Here's a breakdown of the new SLAs:

  • A 30-day installation guarantee. According to Covad, truck rolls take on average 20 days.
  • Service availability guarantees: 99.9 percent for business-class digital subscriber line (DSL) service and 99.99 percent uptime for T-1s.
  • Data packet guarantees of 110 milliseconds (ms) for customers using Covad's IP bundle. The SLA covers other business users with 10ms (for regional traffic) and 140ms (for national traffic).
  • Network outages lasting no more than 24 hours (from the time of the reported downtime).

If Covad breaks its SLA with customers, the carrier promises to credit the user's account -- depending on which SLA term wasn't met. Network outages lasting longer than 24 hours result in a 10 percent credit for every line affected. If network latency issues aren't fixed in an hour, customers get a five percent break on their next bill; if it takes two hours or more, the credit bumps up to 10 percent.

Kristy Cory, a Covad spokesperson, said the SLA levels are an industry standard these days and the guarantees take into account the fact T-1s have been around a lot longer than DSL.

"T1 is a more mature technology, and therefore Covad decided to offer SLAs like 99.99 percent service availability (versus 99.9 percent for TeleSpeed symmetric DSL) and a time to restore SLA of 4 hours for TeleXtend T1 versus 24 hours for TeleSpeed SDSL," she said. "The TeleSpeed SDSL SLAs remain extremely robust and industry standard SLAs for business-class DSL."

While .09 might not seem like a large number to most people, the difference between 99.99 percent and 99.9 percent uptime is huge in the business world. For every minute the network is down, critical files can't be sent and e-commerce transactions aren't made, which adds up to a lot of money down the road. Industry statistics show for every minute a Web site is down, e-commerce sites lose more than $100,000.

Business users using Covad's T-1 and DSL service should remember two things: one, all credits are based on the time the DLEC gets notified about a busted SLA, not when it actually happens (that's particularly important for customers going through an ISP using Covad's lines); and two, large-scale network outages are largely out of Covad's hands.

Since Covad doesn't actually own the network the customer is using (the local telephone company does), it is hampered in its ability to deliver on the promises made. The only real control the carrier has is with how the service is managed.

Still, the fact Covad is backing up its SLA with money-back guarantees is significant, signaling its desire to reach into the profitable business-class market, where the profit margins are larger than with consumer asymmetric DSL (ADSL) service. It's a fact officials are keenly aware is necessary to reach companies that demand consistent service.

"We recognize that businesses want to work with companies that stand behind their guarantees,'' Ingle said. "Covad's enhanced SLAs show that we are confident in our services and our network and that we are committed to making it easy for customers to focus on their business and not worry about their broadband connection."