ORLANDO--When the telecom bubble burst, the wholesale market was probably hit the hardest. The fiber glut and the demise of many CLEC customers combined to drive down prices and drive out some players.

As new more bandwidth-intensive applications boost Internet traffic and CLEC consolidation creates stronger entities, the wholesale market is making a modest but observable comeback. At the Comptel show here this week, that rebirth is measured in a major rush by national competitive players to get back into wholesale with more diversified services.

Qwest Communications, XO Communications, McLeodUSA and Vanco all made wholesale announcements on the first day of the show, joining Level 3 Communications, Global Crossing, Broadwing and incumbents such as Verizon Partner Solutions. They are courting CLECs looking for out-of-footprint connections and, in some cases, providing UNE-P replacements.

There are “signs of stabilization” in wholesale, said Cindy Whelan, analyst with Current Analysis, “We are seeing demand on the upswing, but it’s not huge.”

Part of this resurgence is based on more rational pricing of wholesale offerings and the addition of new capabilities that make it easier for service providers to do business with wholesalers.

“We are seeing revenues increase in part because carriers are trying to get away from competing strictly on price,” she said. “This is where offering added value – Service Level Agreements, web portals, etc. - comes in. Also, carriers are adhering to pricing discipline more than they did in previous years when there was so much bandwidth available.”

Level 3 Communications, which began life in the wholesale world and only moved into business services in the last year with the acquisition of TelCove and Progress Telecom, has created a separate wholesale division to focus on what had been its traditional base of customers, said Glenn Rosen, group vice president of wholesale markets product delivery.

“One thing we are seeing is a shift to being infrastructure focused versus transaction-focused,” he said. Where customers used to add circuits as needed, based on the lowest price available at the time, they are now trying to create an infrastructure with guaranteed quality of service, diversity, reliability to meet bandwidth needs now and in the future.

“They realized that buying circuit-by-circuit at the lowest price was penny-wise and pound-foolish,” Rosen said. The costs of integration and maintenance and the lack of quality-of-service guarantees often proved more costly in the long run, he added.

Major wholesale operators also are adding value but are either having Web portals that put pricing options at their customers’ fingertips or planning to have them shortly. Vanco broke some new ground in this area this week with its virtual service portal announced this week, providing service providers and enterprise customers with a way to very quickly identify availability and pricing of broadband connections on a global basis. Vanco has more than 650 network partners with whom it works to deliver those connections, and 7000 multi-protocol label switched points of presence, said CEO Allen Timpany.

The company keeps its pricing down by selecting the lowest-priced option of its carrier partners for each segment of an end-to-end connection, he said.

“If you combine 30 to 40 carriers, always using their services where they are dense, you can price less,” he said.

XO, which realigned its business organization to better serve its wholesale customers does have a pricing tool for its wholesale customers and will improve that offering by adding wavelength pricing by early 2007, said Ernie Ortega, president of carrier services.

“We knew we have to do whatever we can to make the experience better for our wholesale customers,” he said. The business realignment follows what Ortega calls “significant growth in wholesale” and creates a unit within XO Communications--XO Carrier Services--that is exclusively targeting the wholesale market.

For Qwest, wholesale is a major focus and not “just a way we are trying to sell off capacity,” said Roland Thornton, Qwest executive vice president, wholesale markets. “We look for ways to enhance what we offer rebillers, CLECs and resellers.”

At Comptel, that included a new Qwest Local Services Platform that is a UNE-P alternative. Qwest has had a Web portal pricing tool for two years and will soon unveil a more integrated self-service portal, he said, as part of an effort to make life easier for its wholesale customers.

“Because of where we have been as an industry, we have reduced pre-sell time and now we are looking into how to reduce the post-sell cycle, the provisioning of our services,” he said. “We have an in-today/out-today initiative for orders, and we are focused on giving our customers real-time information that includes firm due dates. We are significantly moving the needle on some cycle times, and we have cut the time in half on others, and we are seeing that reflected in our customers’ attitudes. They are impressed with the progress we have made.”