Does My ISP Qualify to become an ISP/CLEC?

In this ever changing and evolving industry, ISP’s have to think about becoming ISP/CLEC’s. Many questions come to mind. Here are the answers to the most commonly asked questions, from the experts at ISG-Telecom Consultants:

Can I afford to become an ISP/CLEC?

If an ISP wants to maximize its revenues, save money and offer convergent services in order to stay competitive, it can not afford to remain as just an ISP with dial-up subscribers.

Will I remain or become more competitive by becoming an ISP/CLEC?

Most definitely you will become much more competitive.

Am I better off partnering with a CLEC instead of becoming an ISP/CLEC?

This depends completely on your long term goals, current subscriber base, and type of additional services to be offered and your current telco costs as an ISP. In order to get to market faster with these new services, partnering is definitely a viable option but for long-term growth and profits – becoming a CLEC is more advantageous.

What are the short-term benefits of becoming an ISP/CLEC?

The short-term benefits would be reduced costs to the ISP. The new CLEC entity would now service the ISP instead of the current ILEC.

What are the long-term benefits of becoming an ISP/CLEC?

The long-term benefits would include additional revenues as an ISP/CLEC, greater value of your entity (IPO, merger or acquisition). Many ISP/CLEC’s generate greater profit margins from the telco services vs. the ISP services.

Should I go the "Switchless Reseller" or the "Facility Based" route?

At ISG-Telecom we make this determination based strictly on $$$ saved. It is our objective to re-direct your current expenditures and put extra dollars straight to the bottom line. If we can save enough money to pay the switch lease then it pays to become a facility-based CLEC. The other determining factor would be the type of additional services to be offered by the ISP/CLEC…i.e. xDSL, LD, Local loop, VoIP, etc.

Can I afford NOT to become an ISP/CLEC?

Becoming an ISP/CLEC is not right for all ISP’s. It takes vision, dollars, marketing, etc. If you wish to stay competitive, and not pushed out of the market place – is should become a PRIORITY.

Do I currently spend enough $$ on telco services from the ILEC (my current provider) to warrant becoming a "Facility Based" CLEC?

This question is simple to answer – a tandem access switch (per LATA) will cost approximately 6K monthly on a lease basis. By becoming a facility based CLEC – your current costs will be reduced by approximately 80% so here is a formula to consider:

Current monthly costs - $20,000.00
Facility Based savings - $15,000.00
Switch lease - $ 6,000.00

Net savings monthly - $ 9,000.00 or $108,000.00 annually

As an ISP grows so does their telco costs. A good rule of thumb for facility based implementations are ISP’s that incur monthly telco costs of 20K or more and are in only one LATA.

What are the regulatory costs affiliated with becoming an ISP/CLEC?

As part of the ISG-Telecom "turn-key" solution, our filing fees are capped at $9,500 (per state-CLEC only) for the regulatory work (Phase I). This includes strategies, state certification application and filing, tariff drafting and filing, interconnection agreements/resale agreements and trunking/bandwidth solutions. MOST STATES HOWEVER AVERAGE UNDER 5K!

What are the additional equipment needs that I must undertake as a Facility Based ISP/CLEC?

This depends on the types of services to be offered but the minimum equipment necessary to become a profitable ISP/CLEC is a Tandem Access Switch. ISG-Telecom currently partners with the industry’s top manufacturers to provide the best possible equipment solutions.

See additional info at:

Do I really need a tandem access switch?

In order to maximize your savings and profits a Tandem Access Switch is mandatory. Also consider the alternative or additional equipment such a VoIP gateways and DSLAM’s.

What are the savings affiliated with becoming a "Switchless Reseller" ISP/CLEC?

These savings will vary depending on the state as well as the ILEC. Typically they range from 14-25%.

What are the savings affiliated with becoming a "Facility Based" ISP/CLEC?

These savings also vary depending on the interconnection agreement, the state and the ILEC but are typically greater because as a Facility Based CLEC, the interconnecting ILEC/CLEC has to provide all inbound trunks from their closest CO to your switch at NO cost. NOTE: You will have some trunking costs but you can expect savings greater than 50% on your internal costs and typical revenues of 30% on telco services sold to end users.

What are the additional revenue streams that I can generate for my business as an ISP/CLEC?

These are far too great to mention here. Initially, if you are selling dedicated services to your clients (i.e. ISDN, PRI, T-1’s, Frame Relay, etc.) you currently make ZERO dollars on those trunk lines & services. Please contact ISG-Telecom at This email address is being protected from spambots. You need JavaScript enabled to view it. for a copy of "Revenue Streams for the ISP/CLEC".

Will the new revenue streams outweigh the costs of becoming an ISP/CLEC?

In a single word – YES they will, providing your current telco costs make it financially feasible. Fill out the questionaire at: for an evaluation by one of the ISG-Telecom Consultant experts.

Will I have to colo at the ILEC’s CO in order to make money?

Not necessarily. Colo at the ILEC CO is expensive. Your tandem access switch can be in your facility depending on the distance you are from the CO. DSLAM’s for xDSL, on the other hand must be collocated at the CO.

What are the costs affiliated with colo?

These costs again vary depending on the CO and the ILEC. The good news is that the ISG-Telecom negotiators are some of the best in the industry.

How difficult is it to get an interconnect agreement? What are the costs and time frames involved? Should I opt-in or negotiate a new agreement?

Getting an interconnection agreement with the help of the ISG-Telecom experts is NOT difficult at all. ISG-Telecom experts currently work on interconnection agreements with every major ILEC in the USA. Depending on whether we can "opt-in" (our preference) or negotiate a new agreement will have a major bearing on the final costs of obtaining an interconnection agreement. The other variable is how many interconnection agreements are necessary in order to meet the goals and service areas of the new ISP/CLEC. Sometimes interconnecting with another CLEC can prove more beneficial and more than one interconnection agreement is NEVER out of the question. For additional information on the costs affiliated with interconnection agreements, please email Mr. Isaacs @ This email address is being protected from spambots. You need JavaScript enabled to view it. Mr. Isaacs has done over 2,000 agreements with ILEC's across the country since 1996.

How difficult is it to get a resale agreement?

Once again, this is NOT a difficult process for the ISG-Telecom staff. The rates are all defined in the ILEC/CLEC tariff but they do vary depending on the ILEC and the state.

What is the time frame from start to finish?

Typically speaking, the staff at ISG-Telecom can complete the entire CLEC process in 120 days. The approval timeframes at the state PUC’s vary from 1 day to 6 months. Please refer to: for the approval timeframe for your particular state.

How long will my certification process take?

Please refer to the above answer. It will take ISG-Telecom 1-3 weeks, from the time we are contracted and receive all necessary data from the client to prepare the certification application, draft the tariffs for client approval and complete the interconnection agreements.

How long does it take to have telco grade CO equipment installed (class 4/class 5 switches)?

Typically speaking it will take between 8-12 weeks to have a switch installed and turned-up. It is for this reason that we work on the switch selection concurrently with the certification process. The goal is to have the switch deployed and beta tested concurrently with the certification approval.

Should I lease or purchase the switch?

This depends on how deep the pockets are of the ISP. Usually we recommend that you lease the equipment for a period of between 48-60 months because it is more economically feasible. ISG-Telecom, through its strategic partners, offers numerous leasing programs to meet the needs of all of its ISP/CLEC clients.

How many additional people do I need to add to my staff if I become a Facility-Based CLEC?

A small Tandem Access switch can usually be run by one additional engineer. Most of the ISG-Telecom strategic partners also offer switch management for a fee. Training on the switch management is always included in the switch quote (and subsequent lease).

What type of switch, sales & marketing and product training will I need, and at what cost?

As a new ISP/CLEC there will be additional training necessary for many of your current staff members. ISG-Telecom offers over 40 different training courses to meet the specific needs of all clients.

See for additional details on our training programs.

Which equipment vendors should I look towards for help?

As part of our ongoing effort to stay up on technology and provide the best solutions to our clients we have teamed up with the top industry players. Please see for additional details on manufacturer partners.

Can I reduce/consolidate the numbers or POPs I currently have and set-up Virtual NXX’s for greater coverage?

As a "Facility-Based" CLEC you can co-locate your POPS in one central facility right next to your Tandem Access Switch. By utilizing virtual NXX’s you will have the ability to expand your coverage to the entire LATA and have local numbers for not only your current dial-up subscribers but also for new ones.

What about numbering resources?

As a Facility-Based CLEC you will have the ability to apply for an initial bank of NPP-NXX’s (usually 1,000) from ISG can assist all clients with getting NPA-NXX's, the myriad of Neustar, NECA, NANPA, NRUF, etc.

What about number portability?

This is an issue that can be easily resolved as well. No need for changing access numbers.

Should I consider becoming an IXC as well?

This depends on whether you plan on doing InterLATA or Interstate traffic. Long distance traffic is extremely profitable. We will also need to consider VoIP in order to determine the need for Interexchange status. ISG-Telecom has the ability to handle the IXC (State & Federal) implementation on a turn-key basis as well. With VoIP taking over it is highly recomended that all cariers register with the FCC as an intrastate provider.

Can I offer services like xDSL or VoIP?

Yes you can but additional equipment will be necessary.

Do I really need a consulting firm to help me through the ISP/CLEC process?

It is always recommended to hire an expert when a company is attempting to move into a new field with limited expertise. A good consulting firm, like ISG-Telecom does not have the learning curve….since it’s primary focus is the ISP/CLEC market. The ISG-Telecom experts understand both the ISP business model as well as the ISP/CLEC business model. We are not just consultants, we are your regulatory arm throughout and subsequent to the process of going down this path.

What are the advantages of hiring a consulting firm to walk me through the process?

The primary advantage to hiring a consulting firm like ISG-Telecom is the vast knowledge and expertise that they bring to the table. The ISG-Telecom contacts with the ILECs, RBOC’s and CLEC’s nationwide make the interconnection process run smoothly. The ISG-Telecom regulatory staff is perpetually staying on top of the regulatory environment on both a state and federal level, making your filing go more efficiently. Additionally, EVERY client taken on by ISG-Telecom over the past 3 years has been certified – NO ONE has been denied certification. Additionally, most ISP staff are currently over burdened with current responsibilities. The ISG-Telecom staff allows you to run and grow your ISP while we work diligently in the background to create you as an ISP/CLEC.

What are the disadvantages of hiring a consulting firm to walk me through the process?

The only disadvantages would be the cost but the advantages outweigh the minimal costs affiliated with becoming an ISP/CLEC.

Should I hire a telecom attorney or a consulting firm?

There are many telecom attorney’s more than capable of handling the regulatory process. Unfortunately they look at your plan from strictly the legal aspect and not the business aspect. A consulting firm like ISG-Telecom offers much more than regulatory work but ISG-Telecom has and uses the top telecom attorney’s in the USA. Turn-Key solutions often save dollars in the long run.

What is the monthly re-occurring expenses as an ISP/CLEC?

The monthly expenses as an ISP/CLEC include billing, customer service and tax compliance. It is usually recommended than a new ISP/CLEC outsource these functions at least for the first year of operation. All of these functions can be brought in house after sufficient training.

What if I want to be a data ISP/CLEC only (DLEC)?

NO problem.

What if I only want to become an ISP/CLEC to offer xDSL?

NO problem. Let the experts at ISG-Telecom walk you though this process.

What should my total budget be for the ISP/CLEC process?

This will depend on the scope of the work and the number of states certification is required in. Please contact Mr. Isaacs at This email address is being protected from spambots. You need JavaScript enabled to view it. to discuss all of the costs and budgetary figures.

What does it take to get started on the ISP/CLEC process?

Contact Mr. Isaacs @ ISG-Telecom, ( This email address is being protected from spambots. You need JavaScript enabled to view it. ) or call at 727-738-5553 - discuss your plans, have your opportunities evaluated, request the ISG-Telecom Master Consulting Agreement, fill out the ISG-Telecom ISP/CLEC questionaire and get started TODAY!