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More about Third Party Wholesale Monitoring - December 1, 2016

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MORE ABOUT THIRD PARTY WHOLESALE MONITORING
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Ken
    More about Third Party, Wholesale Monitoring....
    We see trouble ahead.  Wholesale monitoring firms, aka Third Party Monitoring, must be able to operate seamlessly across thousands of zip codes and municipalities.  Most local munis have already, or will soon adopt legislation that will require monitoring sources to operate under a multitude of different, and often conflicting, local rules and regulations. Non-compliance will severely penalize the local security providers. Yes there are solutions to the problem, but it requires much cost and operational changes, a different business model… negating the current reasons to switch to wholesale.  Those who switch now should have a well defined plan to take back local control if necessary….”
….observations by 
Lee Jones
Support Services Group
leessg@att.net 
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RESPONSE
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    I agree with the observations of increasing laws, including local municipal laws, competition from the municipalities providing alarm response [something you didn't mention] but I disagree with what appears to be your conclusion.  Are you suggesting that alarm dealers go back to monitoring their own accounts?  I hope not because that would be a financial disaster.
    I think you make the argument for selecting one of the professional wholesale monitoring companies [see The Alarm Exchange in the central station category for the best of the best].  Wholesale monitoring companies are indeed faced with the challenges you mention, and they have to meet these challenges and adhere to all of the many state laws and regulations.  And they do; that's their business.  It's what they are geared up to do and do daily.  
    The days of a receiver on your night table are over, over a long time ago.  How can a dealer afford to monitor its own accounts which would presumably be for local accounts?  A real central station, and that does not include the receiver on your night table or even in your kitchen manned by 2 operators during the day and one at night, is going to cost you $75,000 to $100,000 a month to operate.  If you monitor your own accounts it has to be costing you a minimum of $50,000, and that's if you don't pay rent and under staff your operators and don't keep up with all the latest central station software available.  So do the math.  A wholesale central station will run you anywhere from $2 to $6 bucks an account, fire a little more.  Figure out how many accounts you'd have to have before you would be paying the central station more than your own cost to provide the monitoring.  And the next issue is going to hurt.  The professional central station is going to do it better than you can, and certainly with less personal aggravation.  You could have a 9 to 5 job instead of 24/7.  
    So let the professional wholesale central stations worry about the state and local laws, just like it has to worry about staffing up its operators and buying and maintaining the latest hardware and software so it can provide all the latest bells and whistles to your subscribers.  When you add it all up you'll be paying the central station less than your cost to operate your own central station, you'll free up your time and can sell and install more or just better your quality of life.   
    Stick with the central stations on The Alarm Exchange.  They are "vetted" and know they will read all about any issues, good or bad, they have with a dealer on this forum.   Furthermore, if they had any significant issues with a dealer they wouldn't be on The Alarm Exchange unless they addressed the issue satisfactorily. One other item - make sure your central station is using the Standard Dealer Agreement.  That form has a bunch of check boxes on the face of the form so you can easily understand what you are agreeing to.  It takes the fine print items and highlights them so you know the deal before you agree to it instead of finding out what you agreed to after a dispute arises.
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