AT&T Set to Launch New Contract

SAN FRANCISCO (05/08/2000) - AT&T Corp. this week is expected to announce general availability of a multiservice telecom contract that provides new levels of consolidated account management, unified billing and flexibility in moving traffic to new technologies.

The carrier is set to roll out AT&T Business Network, first unveiled last November as the latest pitch to middle-market users to keep all their voice and data services with the telecom giant.

AT&T Business Network combines most of today's key services - local and long-distance voice, dedicated Internet access, frame relay, ATM and wireless services - in a single 1- to 3-year corporate contract. Network managers then receive a single logon to a Web interface where they can transact all their order-status, trouble-ticket and billing business across the entire range of those services. The contract will also include an e-bill remittance option.

AT&T Business Network is not actually a converged network service, since the underlying voice and data transport offerings remain separate. But the volumes from all the services are rolled up into an overall spending calculation for additional discounts beyond those the carrier ordinarily offers for individual services.

As an additional incentive, AT&T officials told Network World, they will be making standard in AT&T Business Network a type of contract clause that some users and consultants have been demanding in private negotiations. Called a "technology substitution" clause, the provision enables users to shift traffic among different services without risking the traditional telecom-contract penalties that come with missing volume requirements.

For example, many users have been constrained from shifting to voice-over-IP or voice-over-frame relay because their existing contracts for toll discounts require them to meet a circuit-switched long-distance quota every month or every year (NW, March 8, 1999, page 1). AT&T Business Network for the first time will allow standard penalty-free shifts to alternative technologies, though officials note that users will still have to agree to an minimum dollar amount for the contract as a whole.

Only the local, long-distance and wireless components of AT&T Business Network are fully ready now, while frame relay and ATM will go on the platform in July and Internet access around November. However, AT&T will introduce promotional credits on certain months' data transport charges to those users who sign up for the full package now.

AT&T Business Network will be aimed at all kinds of corporate users, including primarily Web-based businesses, with $2,500 to $500,000 a month in total telecom and Internet expenditures. Large enterprises that exceed that spending level will probably still get better deals overall via individually negotiated contracts.

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