Alternative Telecom Provider Seeks Channel Friends

TelCove is one of a handful of data communication service providers that are building out their own cross-country networks to create an alternative to traditional carriers such as Verizon and SBC Communications. After emerging from bankruptcy and becoming a business unit of Bay Harbour in New York, TelCove now has a fiber-optic network that serves more than 50 markets. More recently, the Pittsburgh-based company has reached out to Cisco VARs as part of an effort to create a common cause with solution providers that compete with the network services arms of carriers that resell network gear in volume.

Craig Drinkhall, senior vice president of product development and engineering at TelCove, makes the case for VARs to partner with his company In an interview with CRN Editor In Chief Michael Vizard.

CRN: How is TelCove set up?

DRINKHALL: We're a communications provider to medium and large enterprises. We provide carrier communications services using our own facilities, unlike some other competitive providers, which don't have their own network. They're really just reselling from either a local exchange company or an interexchange company. We build our own network. We operate in about 50 markets, mostly in the eastern half of the country. We have over 11,000 miles of local metropolitan fiber built in those markets, and we connect directly from our own central office and switching facilities to our customer buildings. Over 3,200 of our customer buildings are directly connected with our fiber. We also have about 10,000 miles of fiber-optic network that connects our cities together. So we can provide intercity services and support multicity customers.

CRN: Where does TelCove have the most presence?

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DRINKHALL: We're currently in 52 cities right now. We also recently acquired the assets of one of our competitors, KMC Telecom, and that added 18 additional markets to our portfolio. Those markets are mostly in the Southeast. We're very dense in Pennsylvania, Vermont and Virginia. For example, in Pennsylvania, we have over 5,000 miles of fiber-optic network. The acquisition of the KMC Telecom assets will provide that same kind of density in other places like Florida, the Carolinas and Georgia.

CRN: How are you starting the engage with the channel?

DRINKHALL: We established a Cisco Powered Network Partnership. Most of the network integrators that are working with our customers are Cisco VARs. They're in there driving many of the applications that customers are building that require networks. Our strategy is to not become a VAR. Our strategy is to partner with VARs and network integrators.

CRN: Are people reselling your services, or do you just have referral arrangements?

DRINKHALL: We don't let resellers sell our service. It's more of a referral or partnership program. We go in together and collaborate. We don't pay any referral fees or anything like that. What we tend to pitch to them is, it's to their benefit to have a noncompetitive carrier in there. We think voice-over-IP is going to be one of the highest volumes of requested opportunities that we see together with them.

CRN: Are there any other partner benefits with the program?

DRINKHALL: We're approaching it with multiple initiatives. One is make sure that every one of our markets knows the top three or four VAR network integrators in their markets. Cisco has a great program for supporting their VARs. We're making sure that works. And then, we've conducted a series of pilot seminars, as the first step in a marketing initiative that we could work together. We did one recently in Vermont on voice-over-IP, for example, in partnership with the local network integrators.

We're also establishing ways and mechanisms for the referrals to go back and forth, because we think it will definitely be of mutual benefit. Based on the opportunities, [partners might] bring them to us. If we encounter opportunities to do things that are more in [partners'] core competency, we refer that back to them. What we will be rolling out is a process that provides the formal introduction to the direct Cisco account team in the market, as well as a recommended list of three to five top Cisco VARs in that market. And then the local markets and sales teams would conduct a series of "get to know each other" meetings, exchange product and service competencies and catalogs and network maps, and then select the first marketing initiative that they would do together. And then from that, go to deciding which are high prospects from their mutual list that would be good to go after. CRN: How do you decide which partner to refer that lead back to?

DRINKHALL: We know that systems integrators vary widely. Some may be very good at voice, some may be very good at server, some may be very good at routers and so forth. We're leaving that up to our local teams to establish that relationship.

CRN: In what other areas are you working with solution providers?

DRINKHALL: We have quite a few products that enable storage networking and disaster recovery projects. For example, we just announced in the last quarter of last year some wavelength products that extend fiber channels and ESCON channels to do that enablement of disaster recovery. We got a lot of good traction around that. This year, we've had many of our customers request shared storage and disaster recovery facilities. We can provide high bandwidth, up to 10 gigabit, and we enable that at a pretty reasonable price. We know that the systems integrators are usually one of the key people working with the customer on this, because they provided the service or the storage in the primary location.

CRN: Given all the turmoil between VARs and mainstream carriers, are you seeing companies in the channel becoming more receptive to working with alternative carriers such as TelCove?

DRINKHALL: That's been one of the dynamics. We've definitely done this in a sort of an informal way. In most of our 50 markets, people have had informal relationships with network integrators. Big phone companies are really competing with VARs in selling products and services, and they generally like to come to us then and say, 'Well, you're not really a threat to me. You're more of a partner with me.' So they like us in that respect. And that's the kind of thing we're trying to formally cultivate around the country right now.

CRN: How does what you provide differ from what people usually see from a CLEC?

DRINKHALL: We're primarily a data communications company. We're not sure that CLEC really applies to us because it confuses us with the ones that are just reselling someone else's services.

CRN: How is that competitive landscape changing?

DRINKHALL: Some of the rules that were put in place in the mid-'90s that required the major carriers to resell their services to CLECs have been rescinded. They will probably not be required to sell their services to CLECs, and if they do there's no mandated price. So a company that's very dependent on that could be in trouble. They might not be able to get connected to their customers, or they might not be able to get connected at a reasonable price.

CRN: Given that, are some of those companies trying to reinvent themselves as full-service solution providers?

DRINKHALL: Some of them are doing that as a strategy to diversify themselves, yes.