The following is a guest post by David Rohde of TechCaliber Consulting, LLC.

It’s an axiom of enterprise telecom RFPs that you probably want to award some business to competitive providers to keep the big incumbents on their toes. And in the old days, throwing some intercity private lines or some outbound long distance minutes to Carrier X was a nice, tactical way to achieve this purpose without much operational risk.

But we do not live in tactical times. A massive strategic shift is well under way in the enterprise market. Business customers are procuring products and services that have to be stable in the new, all-IP network environment as the TDM-based Public Switched Telephone Network is about to be ripped out of the ground.

That drives two completely intertwined questions: What services do you put out to bid? And who do you put them out to, in addition to AT&T and Verizon? It’s an anxiety-inducing pair of questions. Think about what’s on your plate now: Is a “CLEC” really a rigorous enough vendor for you to throw business at when the stakes are so high?

At our upcoming conference for business users, Negotiate Enterprise Communications Deals, running from April 27-29 in Orlando, Florida, connections among sessions and speakers will bring these linked decision points into focus.

I’m thinking particularly of an in-depth session to be presented by LB3’s Deb Boehling and TC2’s Pat Gilpatrick called “Data Network Transformation” that is heavy on Ethernet access, MPLS Bandwidth on Demand, and on-net access to the cloud. That will be complementary to a session that I am presenting called “Reconstituting the First Tier.” If you are buying Ethernet access to a critical service like SIP Trunking, or if you are moving key applications to (probably) a private or hybrid cloud structure, you’re probably not looking at vendor selection for these services the way you would have for Plain Old Telephone Service!

For a number of years I have been evaluating “competitive” or “second-tier” carriers based on their skillsets and financial strength and stability – not their stock price or even their credit ratings necessarily but their near-term debt “maturities.” Now, for would-be first-tier carriers who aren’t AT&T or Verizon, this kind of question affects bid lists for services that must be awarded properly or the success of your next-generation network is in jeopardy.

It’s striking the different abilities that carriers have demonstrated over the last two years to push off the typically high debt that all of them tend to have to later years or even another decade. Some have succeeded in doing this and some haven’t.

And no fair if a carrier does this by simply stopping raising money to invest in their network! There’s a strong correlation between the percentage of overall revenues that are devoted to what Wall Street calls “capital expenditures” and what you and I call “network investment” and a carrier’s ability to both provide contemporary services and reach a non-trivial number of your locations end-to-end over their network.

In all of this, one thing hasn’t changed from the telecom industry’s long-established pattern in large-scale technology migrations: It’s an opportunity for all carriers to restart the contract environment with new, more onerous terms and conditions.

Think about individual circuit terms in addition to the overall term of your contract and the overall dollar commitment. Are you prepared for the guilt trip that carriers will lay on you regarding the much higher bandwidth of Ethernet access circuits and the “sunk investment” that requires a circuit term? Are you prepared to counter with best practices for what are actually these days rather moderate Ethernet bandwidth needs?

Even if you do know the state of the art here, do you know the ingenious (okay, nefarious) little ways a relatively benign circuit term can turn into a real ball-and-chain, just because of the way it’s written and the way the prospective liability is calculated?

Remember, the Big 2 are not even necessarily the bad guys (or at least the “worst guys”) when it comes to this stuff. Newer carriers that want to play in the big leagues can come in with smoking-hot pricing but be some of the most challenging in this arena. In fact, the general attitude about terms and conditions is one of the evaluation areas that all of us – Deb, Pat, myself and all of the speakers at the Negotiate Enterprise Communications Deals conference – instinctively look to when we see a carrier that wants to make the step up to offering strategic services, not tactical circuits and ancillary services.

Check out the welcome letter from Conference Chairman, Hank Levine and then go through the agenda. I hope to see you in Orlando on April 27-29!

By David Rohde, TechCaliber Consulting, LLC