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Carrier Service-Level Agreements (SLAs)

5. Carrier Compensation: What Does It Mean?

Once a company has negotiated strong service guarantees with a carrier, should the company sit back and wait for the money to start rolling back in through service credits? Service credits are not compensation for network outages. They will never approach the compensation required to pay for the time and trouble a business experiences when the network is nonfunctional. What is important, however, is that a network is reliable. Should an outage occur, the carrier should be able to quickly diagnose and repair the problem before it impacts users.

Therefore, even before entering into that contract, a company should understand the tools and processes the carrier uses to diagnose customer and network problems. Is the carrier calling customers proactively or simply reacting to customer calls? Do the carrier's operations personnel have the tools to determine the cause of the outage (local loop, switch, port, CSU/DSU, router, etc.) to ensure that the carrier meets the mean time to repair guarantees, or is the carrier going to delay opening the trouble ticket to achieve those numbers?

Remember that compensation is not the reason for service-level guarantees. Service-level guarantees reduce conflict between a company and its carrier (and a company and its end users) by setting reasonable expectations of service. The experience a company gains in managing its network–service levels will result in happier users and more efficient utilization of valuable network assets. These experiences also will serve as a template for negotiating service guarantees for other information services and as part of an overall information technology–service guarantee infrastructure.

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