Why Two Phone Companies Are Better Than One

As the tens of thousands of air travelers marooned in New York area airports on Sept. 17 can attest, when a vital telephone network goes on the fritz, everything can come to a screeching halt. Shortly before 5 p.m. on that fateful day, an American Telephone & Telegraph Co. switch in lower Manhattan lost power, severing a vital link in the Federal Aviation Ad-ministration's network. With air traffic controllers cut off from one another, nothing moved in or out of the three major airports for hours. Imagine if the same thing happened to your business.

The good news, according to telecommunications experts, is that such a complete telecommunications breakdown can be avoided. Even though most network problems are beyond the control of a company's telecommunications department, good backup systems--the kind the FAA lacked--can prevent a total collapse. "What happened to the FAA shouldn't happen to everyone," says James Bailie, a consultant with Independent Telecommunications Services in Bethesda, Md.

The answer? In a word, diversity. Michael Finneran, a telecommunications consultant with dBRN Associates Inc. in Hewlett Park, N. Y., says companies should have at least two long-distance providers. If your primary carrier is AT&T, get accounts with MCI Communications Corp., U. S. Sprint Communications Co., or another long-distance company. In a pinch, for every outgoing call, you can dial the access codes consumers use to select carriers when dialing from pay phones: 10288 for AT&T, 10222 for MCI, and 10333 for Sprint.

CROSSED WIRES. Many big companies routinely use multiple carriers, and not just for backups. Bear, Stearns & Co., the New York brokerage, divides its huge phone traffic among several carriers. It's like having multiple oil pipelines, each filled to half capacity, explains Jeff Marshall, managing director of Bear Stearns's communications department. The setup can handle any increase in phone traffic as well as take up any slack from a failed carrier. But one catch, warns consultant Bailie: Dividing long-distance calls among many different carriers can raise costs by preventing companies from getting the maximum volume-calling discounts.

Even with multiple long-distance services, phone customers could still be vulnerable to some breakdowns. Although most customers would never know it, phone companies often lease circuits from one another. So even if you have a second carrier, it might actually be using the same lines as your primary carrier. Thus, a single accidental cut of a wire or fiber-optic cable can wipe out both carriers. Consultants advise that phone customers make sure they are not just buying what's known in the trade as "diagram diversity"--the appearance of alternate routing. To be sure that your calls will travel over multiple, independent paths, make your carriers spell out exactly how your calls will be routed.

While a simple backup system could have easily saved the FAA from the Sept. 17 fiasco, the agency did not have the freedom that businesses have when arranging phone service. Like other agencies, the FAA orders its phone service under strict federal procurement rules. Realizing it was vulnerable, the FAA had been lobbying the General Services Administration for permission to solicit bids to get a more secure system. The GSA had resisted, ruling that the FAA should buy its phone service under the terms of FTS-2000, the huge phone contract that serves other government agencies. In light of the recent troubles, however, the FAA is negotiating a compromise with the GSA.

SHARING THE LOAD. Finding a backup to protect your business from a failure in the local phone system is a bit trickier. Almost everywhere in the U. S., there is only one local phone company. Large customers can protect themselves bybypassing the local phone network to link directly to long-distance carriers, via microwave antennas or fiber-optic cables. Chrysler Corp., for instance, communicates with dealers via a network of satellite dishes. For those who don't want to build such networks themselves, businesses have sprung up in major cities that offer shared fiber-optic networks connecting subscribers to their long-distance carriers. "Don't put all your eggs in one basket" is the advertising slogan of one such network, New York-based Teleport Communications Group.

One of the biggest hurdles in diversification is how to deal with 800 numbers and other special lines. For now at least, each carrier can supply companies with a toll-free number that works only within its network. They can't be switched to another carrier. So, should a long-distance network fail, the toll-free number can't be replaced--except with a new 800 number.

Frost & Sullivan Inc., a market researcher, recently projected that U. S. companies will sharply increase spending to keep their telecommunications networks running. The company predicts that revenues in the network security market will jump from $8.2 billion in 1990 to about $18 billion in 1996. With nightmares such as the FAA mess serving as object lessons, businesses don't have to be convinced that it's worth spending some extra money to protect their vital phone links.


1. Don't rely on just one service. Split traffic between long-distance carriers such as MCI or AT&T

2. Insist that competing long-distance carriers don't route your calls over the same physical line or path. Carriers often sell capacity to one another, so it pays to check

3. Look for alternate routes to your long-distance carriers so your phones won't be crippled if the local phone company has a glitch. In some cities, you can bypass the local phone company by using another carrier to connect to long-distance services. Microwave and satellite links are also options