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Negotiating a More Perfect SLA

No part of a communications service agreement is harder to negotiate than the SLA. One reason for this is that customers and carriers have divergent expectations and perceptions that create tension between the two parties.

On the one hand, customers demand reliable service. No IT executive wants a key data center, call center, or Web portal going offline for minutes--let alone hours--because of a service outage. For customers, SLAs ensure that quality service is received, and that tough remedies are meted out when service fails.

Carriers, on the other hand, are reluctant to negotiate SLAs, for practical and historical reasons. Carriers know that outages are inevitable: Backhoes cut fiber, router cards burn out, and software goes buggy. As negotiations begin, the carrier touts "great service" and "best-of-breed" capabilities. But when pushed to translate rhetoric into SLA metrics and remedies, it quickly shifts to expectation management mode, where "the network is the network" and networks go down.

A legacy of limited liability and common carriage regulations, which demand that carriers serve all comers on equal terms, also influences a carrier's willingness to customize SLAs. Clinging to this tradition, carriers often insist on a "one-size-fits-all" approach, citing obsolete requirements to justify inflexibility, though most of them are now free to negotiate customer-specific arrangements.

Then there's the grim state of carrier economics. Custom SLAs mean nonstandard processes for tracking and reporting performance, which creates additional expense. They also mean more rigorous performance standards and stiffer consequences for service failures than standard SLAs.