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Don’t get roped into a benchmarking clause without teeth

If you ask a provider for a rate review or benchmarking clause you’ll get one. But the provider versions are worthless-what we call “we’ll talk” clauses.

These don’t give you a right to money; they give you the right to a conversation.

Under a real rate review clause, both sides have skin in the game-the provider can refuse to reduce the customer’s rates, but if it does so the customer can reduce its commitment and take some of its traffic elsewhere to get the good rates that the incumbent won’t give it.

Under the provider’s “standard” rate review clauses the customer has the “right” to ask for an offer, but nothing changes unless the parties “mutually agree” to amend the agreement, and the provider pays no price for offering a paltry reduction or conditioning any reduction on more traffic or a term extension. In other words, you have an ironclad right to a conversation-which the providers are always willing to have anyway.

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