We’re now a CLEC in the USA!

By Simon Woodhead

We’re now registered as an infrastructure-based CLEC in the United States. This gives us many powers in law to build out infrastructure and interconnect with incumbents on Regulated terms! We know of no other UK operator that has done this.

The US landscape
Whilst it has a healthy VoIP provider and channel scene, infrastructure-based telecoms in the USA breaks down in to two types of operator. ILECs are the Incumbent Local Exchange Carriers, or the original incumbents in 1996 when the US went through its equivalent of deregulation; in a UK context BT would be our single ILEC. By contrast, CLECs are Competitive Local Exchange Carriers, and are licensed to carry out business in a State; the equivalent in a UK context would be operators like us who have a Regulated Interconnect [over SS7] to BT and operate a network, and not BT [IPeX] resellers. Accordingly CLECs can then interconnect with ILECs, not on Regulated prices, but on terms negotiated under a Regulatory framework. Regulation is in-part by the State but fundamentally by the FCC; there is no comparison to either in a UK context!

What are we doing
We signalled previously that we had deployed network to the East and West coast of the USA and would be in a position to offer service via that shortly. Those are really just technical PoPs to access our existing termination and numbering, both of which have been available with USD billing for years.

We also signalled that we would be offering US numbering and number portability via this infrastructure and that requires slightly more. Of course, we could resell any old CLEC’s services and many do but that doesn’t resonate with our values. We like to control our infrastructure as deeply as possible and to integrate as highly into the food-chain as we can. Only this way can we innovate with meaning, improve on incumbent stability, and access the economics that make the model work. We’ve done this in the UK and have opportunity to do so in the US.

Simwood Inc. has been incorporated as a wholly owned subsidiary and in parallel, with help from our friends, we’ve gone through the process of approval and examination to be certified a CLEC. This doesn’t mean we’re going to register in every state or start digging up streets, but we have the badge and will use it carefully and progressively to assert the rights it gives us where necessary. The result will be we can offer a local PoP to US customers but also be a part of domestic infrastructure with access to the centralised porting database etc. That means we can offer US termination, numbering and porting, to US and international customers, with the utmost control and in-turn quality control.

Why are we doing this
There are many reasons and no single one is solely responsible.

We’ve always had an affinity for the way business is done in the USA and the ‘no bullshit’ approach to things. Those who know us well know we struggle with the lies and misrepresentation that seems to plague UK telecoms; so the US approach is refreshing and appealing. Simwood is also better known in international circles than domestically, not least because of the significant work we’ve done over the years in relation to VoIP Fraud and our contribution to various communities. When any of the world’s largest carriers, including the US number 1 (6 times the size of BT) ask for our research within 24 hours of publication, we take note. We also have many industry friends and peers occupying similar positions to us, in other markets.

Secondly, we concluded a few years ago that the single biggest hazard to our business was Ofcom. That might sound harsh and we’re prone to a rant or two but it is absolutely true. Any entity that can take away 90% of one stream of our (or our customers’) income overnight as they did in the Narrowband Review, whilst simultaneously increasing our costs by letting the incumbent increase their transit charges to us is scary enough. That that entity refuses to enforce its own rules to prevent consumer harm in respect of Number Portability, or indeed fix the burning process that is number portability increases our concern. That they simultaneously deny us access to supposedly open markets as they did in mobile, and at best stand-by while UK telecoms re-monopolises make us very afraid for their ability to kill an industry in a heartbeat, or at best act to our detriment. It seems common sense that we should minimise the consequences of that to our wider customer base and business and we’ve been working to do so since 2015 in a number of ways. The birthplace of protectionism and Trump’s America may seem an odd-place to start, but the fact we’ve found it fair and transparent perhaps illustrates the gravity of the UK Regulatory situation!

Thirdly, and arguably consequent of the above two, our business has changed enormously in the last year or so and would be unrecognisable to anyone who thinks they know it. Some of our long-term UK-based customers have been busy expanding internationally, and need our services in other markets. Meanwhile, we now have some very large global customers for whom we may be their secret weapon in the UK, but in a global context the UK is far from the top of the list. It makes sense that if we have opportunity to replicate ourselves in other markets, we should do so. We do and in fact we have revenue awaiting our execution in the US. That is a privileged position to be in compared to the ‘build it and hope they come’ approach we’ve historically taken.

Lastly, we stand out as uniquely innovative and software-oriented in UK telecoms. While others rest on their laurels or are aggressive in other areas such as sales, they fundamentally do what they’ve always done. That isn’t the case internationally and we know of some very well-funded technically deep (on the surface!) outfits with the UK in their cross-hairs. The pitch is global now and we need to stake our claim there. We have some very strong allies in overseas markets that can help us there, in the same way as we can bring them to the UK market. I’ve resisted quoting Churchill as the metaphors could get us into trouble!

The future
It is very early days for us in the US but we can take your termination traffic today and would appreciate you sending us any you might be sending elsewhere. We believe we offer the best international quality with assured CLI and two-way DTMF – both of which may be taken for granted in the UK but are something of a lottery over tier-1 routes into the US from outside. Our rate has been reduced dramatically over recent weeks and will continue to refine and reflect our own economic gains through position.

Numbering and porting will take us a little while to do properly and we’ll keep you updated. Two-way A2P and P2P SMS in the US is also a given.

We’re not trying to or planning to take over the world, we’d sooner do a few high value markets properly. The US will keep us busy for a while, but the astute amongst you will see we now have a fledgling PoP in Tokyo too. It is just a PoP for now but please keep talking to us as your conversations with Frazer are always considered as we work out our road-map.