Presenting a live 90-minute webinar with interactive Q&A Drafting and Negotiating Telecom Services Agreements Structuring Key Contract Provisions, Anticipating Legal Pitfalls, and Mitigating Risks TUES DAY, FEBRUARY 18, 2014 1pm East ern | 12pm Cent ral | 11am Mount ain | 10am Pacific Today’s faculty features: C. Douglas Jarrett, Partner, Keller and Heckman LLP , Washington, D.C. apronov, Principal, Sapronov & Associates, P .C. , Atlanta Walt S The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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Drafting and Negotiating Telecom Services Agreements Structuring Key Contract Provisions, Anticipating Legal Pitfalls and Mitigating Risks C. Douglas Jar r e tt Walt Sapr onov Par tne r Pr inc ipal Ke lle r and He c kman L L P Sapr onov & Assoc iate s, P.C. jar r e tt@he c kmanlaw.c om wsapr onov@wste le c omlaw.c om The presentation and materials are for tutorial purposes only and are not to be construed as legal advice. 4
Overview • Se r vic e Offe r ings in E nte r pr ise - Base d T e le c om Pr oc ur e me nts • Wire line / L a ndline • Wire le ss (Mo b ile ) • Da ta Ce nte rs • Pr oc ur e me nt Basic s / Role of Consultants • ms and Conditions “Busine ss” T e r • Pr ivac y and Se c ur ity • "L e gal" T e r ms and Conditions • Que stions 5
Wireline Services • Pr ovide r s AT &T ,* Ve rizon* o Ce ntury L ink,* L e ve l 3, Sprint o T e le fonic a , BT , NT T , Ora ng e , T a ta o XO, tw T e le c om, Ca ble Ope ra tors* o Re g iona l Ca rrie rs* o Sma ll IL E Cs o • Ge ogr aphic Sc ope of Agr e e me nts Dome stic , Inte rna tiona l a nd “Re st of World” o • Contr ac t T e r m 3- Ye a rs, w/ two 1- ye a r re ne wa l options for c ustome r o T ra nsition Pe riod o 6
Overview of Wireline Services • • Cor e Se r vic e s Manage d Se r vic e s* Ma na g e d Route r/ Ne twork o Voic e o Ma na g e me nt • T DM to IP T r ansition F ire wa ll & Intrusion De te c tion o o High spe e d Inte r ne t Ac c e ss Colloc a tion/ Da ta Ce nte r o o MPL S/ VPL S Audio c onfe re nc ing o o Pr ivate L ine Cloud c omputing o • T DM and IP Conte nt De live ry Ne tworks o o Spe c ial Ac c e ss • CPE (Rar e ly inc lude d) • T DM to IP T r ansition • ibe r Se r vic e v. Dar k F 7
Wireline Procurement Cycle • Ke ye d to standar d te r m of agr e e me nt • Inc e ntive s to Custome r s Be tte r pric ing , te c hnolog y / se rvic e s, ba c k –up c a rrie r, c ha ng e in o g e og ra phic re quire me nts Be tte r busine ss pa rtne r o Avoida nc e of e nd- of- te rm / c ontra c t e xpira tion pric e inc re a se o • Disinc e ntive s to Custome r s Soft a nd ha rd c osts of proc ure me nts(s) o • L imite d sta ff re sourc e s • T ra nsition c ha lle ng e s; minimizing pe riod of dua l se rvic e • Dynamic s T iming o Cre dible thre a t of loss of busine ss for inc umbe nt c a rrie rs o Pote ntia l for ne w busine ss for a ll bidde rs o 8
Service Offerings • Se r vic e Offe r ings in E nte r pr ise - Base d T e le c om Pr oc ur e me nts • Data Ce nte r s • L ic e nse v. L e ase v. Suble ase (Why doe s it matte r ?) • T e r m and T e r mination (Whe n c an you walk?) • Se r vic e s, Oc c upanc y, Impr ove me nts (What’s inc lude d?) • Utilitie s; Powe r supply (Is powe r loss a for c e maje ur e ?) • Building Ac c e ss: Rise r s, duc ts, wir ing, c ommon ar e as, • Use r e str ic tions on the spac e : (How str ic t? Do the y matte r ?) • Assignme nt; Building sale ; L andlor d bankr uptc y • De aling with Risk: Casualty, inde mnific ation; insur anc e • Pr ic ing, adjustme nts and inflation indic e s: De al pr ote c tions • F or e ign loc ations (De aling with for e ign pr ope r ty laws) 9
Wireless (Mobile) Services Providers Dome stic Car r ie r s Multinational Car r ie r s • • AT &T Vodafone • • Ve r izon Wir e le ss Softbank • • Spr int MVNOs Voic e , da ta a nd te xt • o T - Mobile M2M o • MVNOs Voic e , da ta a nd te xt o M2M o 10
Wireless (Mobile) Services • Voic e , te xt, data (migr ation to 4G- - L T E ) and M2M • Smar t phone s, i Pads and table ts • Same se r vic e s and de vic e s as offe r e d to c onsume r s (e xc e pt M2M) Almost a lwa ys postpa id o Subsidize d sma rtphone s, i Pa ds a nd ta ble ts o Sa me limits on unloc ke d de vic e s o • Non- US Wir e le ss- - distinc tions Subsidize d de vic e s, e xc e ption ra the r tha n rule o Roa ming ra te s le ss e xorbita nt o More dyna mic involve me nt of MVNOs o 11
Wireless (Mobile) Services • Major diffe r e nc e s fr om c onsume r pur c hase s Pric ing – More Options o Pla ns w/ more disc ounts/ Ag g re g a te c re dits o Pooling o • De vic e Re fr e sh Cyc le (No Pe nalty Upgr ade s) be tte r than c onsume r s • Cor por ate liable v. individually liable options • As c ompar e d to wir e line se r vic e s Wire le ss c a rrie rs do not foc us on upse lling non- c ore se rvic e s, ma y pa rtne r o with MDM c ompa nie s • Pr oc ur e me nt Cyc le 12
Wireless (Mobile) Services • Ge ogr aphic Sc ope Dome stic with inte rna tiona l roa ming— ve ry e xpe nsive from US c a rrie rs- - - T - o Mobile is c ha ng ing U.S. – ba se d roa ming Multi- na tiona ls typic a lly ha ve multiple a g re e me nts w/ c a rrie rs in c ritic a l o re g ions • T e r m 2- ye a rs, some time s a sing le one -ye a r re ne wa l option o L ine te rms o • M2M Offe r ings Wire le ss mobile ofte n pa rt of a n e nd- to- e nd se rvic e o De vic e s ofte n c a rrie r- spe c ific o • Ce rtifie d but not subsidize d Sta nda rd wire le ss te rm doe s not work for e mbe dde d de vic e s o MVNOs ha ve a muc h big g e r pre se nc e in this se g me nt o 13
Procurement Basics • Compe titive Bids: (RF I/ RRP); E xte nsions; Be nc hma rks o Propose d T e rms a nd Conditions – Re sponse : ye s, no, e xpla in o • Wir e line / L andline : Purc ha se / Re ve nue Commitme nts (Se e be low) o T e rm/ Cre dits / Wa ive rs/ Sig ning bonus o • Wir e le ss: Corpora te / E mploye e L ine s (CRU/ IRU) o Ra te & Da ta Pla ns, E a rly T e rmina tion F e e s (“E T F s”), Wa ive r pools o Mobile phone s / T a ble ts / Apps o 14
Procurement Basics • Ge ne r al: Pla in E ng lish o Simple Que stions vs. F orm Contra c t Atta c hme nt o Re sponse Re quire me nts - E a sy Compa rison o Pric e Prote c tion o Bid Compa rison (Se e Role of Consulta nts be low) o Non- e xc lusive , Prima ry & Se c onda ry Ca rrie r Se le c tion o Confide ntia lity / E xisting Ag re e me nts o Bidde rs c onfe re nc e / Be st a nd fina l o T re a tme nt of Re sponse in Contra c t Ne g otia tions o 15
Role of Consultants • RF P Pr e par ation; De ve lop de mand se ts Voic e / da ta tra ffic ; Inte rna l Study; "Spe nd a na lysis o • Knowle dge of se r vic e pr ovide r obje c tive s a nd a c c ount te a m motiva tions o • Knowle dge of mar ke t pr ic ing Not public ly a va ila ble o • Compe titive mar ke t c he c ks Pe riodic / Annua l pric ing re vie ws - Be nc hma rks o • Optimization/ Billing audits / T E M se r vic e s Se c urity c ontrols (se e be low) o 16
Business Terms and Conditions • Se r vic e L e ve l Agr e e me nts (Wir e line v. Wir e le ss) Se rvic e Qua lity a nd Provisioning o Me tric s a re re le va nt a nd c re dits for individua l proble ms work o Chronic issue s typic a lly not a ddre sse d o • Billing Ac c ur ac y A c ha lle ng e for ma ny c a rrie rs o Most c ommon sourc e of dispute s— a que stion of how ba d o T ie re d dispute re solution v. Ca rrie r ha ving fina l word o 17
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