The auction is nonbinding to customers. And many small-business executives, such as Robert Lippert, executive director at the Fresno Philharmonic, find the results well worth the five minutes it takes to enter a pool. Lippert wanted to improve on his long distance rates, yet his past rate-shopping experience while running the Boston Ballet kept him from pursuing the effort. I spent weeks talking to people, faxing copies of our bills and comparing offers. That was the case for Lippert, whose bid was 9 cents per minute.
Customers make their final deals with auction winners directly.
Small companies such as the Natural Connection and the Fresno Philharmonic represent an important niche for Web telecom services marketplaces. Providers realize this market is potentially lucrative, but the cost of using traditional direct-sales efforts to find new customers is prohibitive. According to a report by The Yankee Group, more than 2 million small businesses will build Web sites in the next 12 months alone. Brad Wise, vice president of channel development and sales at UUnet Technologies, an MCI WorldCom company, says UUnet joins these auctions and bids on RFPs because it's a nearly free way to get into the offices of small companies where UUnet can sell new data services as users' needs grow. Also, responding to aggregate buying helps prevent deterioration of published-tariff rates, which can occur when small businesses are given individual discounts.