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Negotiating a More Perfect SLA: Page 9 of 14

The question becomes one of, am I better off expending time and energy negotiating greater credits, or seeking other remedies? When making this decision, remember that carriers hate credits and will fight to limit their liability for service failures. Remember, too, that the goal of SLAs isn't outage credits for the customer, but good performance and prompt resolution of outages.

Consider remedies that address the underlying service problem. For example, if a service misses an availability measure by a certain amount or in consecutive months, a useful remedy could be mandatory reprovisioning of the service at the carrier's expense, or mandatory escalation of service problems to decision makers within the carrier.

Credit accruals can also serve as a proxy for additional relief. For example, if credits are paid out on a certain number of connections, that may serve as a trigger for additional credits, or even service termination rights.

Having this last option is important. Never give up the right to terminate for a service-related material breach. Beware of provisions in the SLA or the master agreement stating that the SLA sets forth the customer's sole remedies. If the carrier's performance is so bad that there's a claim for material breach, the customer should have the right to assert it.

Finally, tailor your SLAs to the service. A common SLA provision allows termination for chronic and catastrophic failure of a connection after three or more outages of 30 minutes, totaling 12 or more hours in a three-month period. Although fine for a private line, this may be useless for a frame relay connection. Unless the customer has multiple networks or a network split between two providers, it can't eliminate a troubled connection. Solutions for switched packet services should provide an incentive to address problems with both individual connections and overall network quality.