After WorldCom, unleash your lawyers on telecom contracts

IT directors should call in their corporate lawyers now for a line-by-line analysis of their telecoms contracts.

IT directors should call in their corporate lawyers now for a line-by-line analysis of their telecoms contracts.

That is the latest advice from analyst firm Giga Information Group in the aftermath of the crisis that has brought WorldCom to its knees and seen KPNQwest file for bankruptcy.

In an advisory note, Giga analyst Lisa Pierce warned users not to expect troubled carriers to give them reasonable notice in which to migrate to other services or providers. "Enterprise network contingency planning is essential," she said.

Pierce suggested that large users should split their traffic between several tier-one providers. Smaller customers should chose a secure tier-one provider with critical applications and routes backed up by a second tier provider.

Her view was backed by Steve Andrews, president for BT Ignite's carrier networks business, which has dealt with many users seeking alternative suppliers to the bankrupt KPNQwest network.

"It is too expensive for customers to run a full duplicate network," in the event of a telco provider's service being suspended, he said. Many users, he noted, ran diversely routed networks with a backup network from a second provider.

In uncertain times Giga advised users to keep networks and telecoms contracts short. "We prefer a commitment of a year or less," Pierce noted. "In such instances, on highly competitive services, clients may find they can negotiate good prices without making any longer-term commitments at present."

Meanwhile corporate lawyers should be examining contracts to beef up clauses allowing early termination in the event of poor performance or financial problems.

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