10 Things I Dislike about Telecom

Recently at the Channel Partner Expo, the Director of Sales for Easton asked me why I worked in telecom, since I obviously hated it so much. I don't hate telecom, I dislike quite a few things about it:

10. The whiners who won't file a comment or complaint with the FCC or PSC. It's like citizens who complain about the President, but didn't turn out to vote.

9. The whiners who still expect the FCC to "fix" it so they can sell DSL profitably. Wake up! It isn't the FCC's job to see to it that you make a profit - that's your CEO's job!

8. The telcos that advertise UNLIMITED, but actually don't mean it. (False advertising - and the other F-Agency - the FTC - should be all over you.).

7. The telcos that say they OWN the network, when in fact they only Operate the network (or something akin to that). Unless you trenched or strung some fiber; bought an IRU; or lit up an AP, you lease or rent your network. (More false advertising. Hello! FTC?!).

6. Telco execs that have no clue about dockets at the FCC that will adversely affect their companies position. Regulatory and Legislation are as much a CEO's bailiwick as Vision, Strategy and Profit. How do you have Vision or Strategy without knowing what is happening in DC and at the State Capital? Ma Bell spent over $60M last year lobbying to get what they want. $60M!

5. CLEC execs that still think the FCC is going to see the light and not UN-regulate the ILECs to the detriment of the industry. Powell and Martin peeve me off, but there isn't any change in sight, so re-adjust your thinking. No national broadband strategy is another problem*.

4. CLEC execs that still think offering an Integrated T1 is novel.

3. MVNO execs that think the new UNE-P (MVNO) is going to work out any different than the copper UNE-P did.

The Number 2 item that bugs me is COMPTEL for not forcing its members to see the writing on the wall. By now, CLEC's should be peering, sharing infrastructure info, and buying from each other as much as possible to the detriment of the ILEC. Why isn't COMPTEL sponsoring a consortium to bid on the 700 MHz spectrum? There's the 3rd pipe so you can actually OWN the network. (Get the RLEC's to join you).

And Number 1 is The Total Lack of Innovation from the CLEC Industry. We live in a Web-enabled, widget tech world. And the CLEC's mostly act like it's still 2000. Remember Z-Tel's PVA? Where's the UM, the FMC - and all the other acronyms? Everyone is chasing minutes with "I'll save you some money". You hate FREE, but you are the ones pushing the price lower and lower. Where's the Value? Business owners would rather have productivity and reliability and integration and an easy bill than save 10%. (But if you can't do any of that - all you have is price... for the short term.)

This isn't to say that there aren't CLEC, ITSP, Hosting, ASP, ISP, and WISP execs that have a clue - I know quite a few. Where are they, you ask? Most of them are regional. Local players, who don't have the audacity to think that you can go national before you build a bedrock of local or regional. Execs that get to know their clients - and create a solution for them, thinking outside the box. Getting it done. That's why I am in telecom industry. I love working with these guys. They get it. You have a good day now, James.

*(It doesn't surprise me that we have no broadband strategy, since the only plan this Administration had was to make all their pals rich and go to war in Iraq. Remember he said mission accomplished a long time ago. Don't be like GW. Get an A in Planning.)

the ups and downs of MVNO

SK Telecom is investing $270M in Helio as ELN gives up some ownership. Helio ended August with 135k subs.

Meanwhile, Disney Mobile drops its MVNO.

Virgin Mobile is still looking at an IPO.

And at Channel Partners, Telisphere unvieled its MVNO Premier plan (similar to Sonopia).

Finally, Telrite debuts their MVNO.

Mergers Everywhere... but how many will go?

News sources are reporting and stating that FCC Commissioner Copps will likely vote against 3 mergers:

1. Sirius-XM: Copps doesn't think the merger is in the consumer's best interest, YET [source1, source2] [Ed. note: I think one financially strong satellite radio company would give the NAB members a run for their money. Today's radio sucks!]
2. "when Tribune Co. goes private at the end of the year [in Zell's $8B deal], it shouldn't expect to automatically get renewal of the temporary cross-ownership waivers for its television stations." [source3]
3. "Copps also reiterated his opposition to the sale of Dow Jones & Co. to Rupert Murdoch's News Corp., saying the FCC should study the deal for its impact on media diversity in New York -- where News Corp. publishes the New York Post and owns two television stations -- and nationally." [source4]
4. IN other FCC news, Comcast was fined for Fake News. [source5]

Ma Bell makes a swipe at DISH Network parent Echostar for $55 per share, weeks after Echostar purchased Sling Media and is thinking of splitting the company into assets and services divisions.

Vonage at the dollar store

Vonage's stock is below $1 after being hit with 2 courtroom losses. The court is recalculating damages to VZ as well as halting use of the VZ patents by Vonage. Another court ruled that Vonage was infringing on 7 patents from Sprint. That will cost them $69.5M and 5% royalties. While Vonage has the cash to pay the $69.5 + $58M, it does not have a 10% margin to pay the telcos. (Of course, Vonage could add a 10% surcharge on to the bill).

What is still standing for ELN?

The Washington Post writes that EarthLink has re-visited the government deals in Arlington and Alexandria.

Grasso said that EarthLink continues to operate completed muni WiFi networks in Corpus Christi, New Orleans, and Milpitas, Calif., plus two under construction in Anaheim and Philadelphia. [wpost]

Reason.org has a breakdown of the ELN deal with Corpus Christi, since "Corpus Christi remains one of two cities to which EarthLink remains committed, the other being Philadelphia, which stands as EarthLink’s highly visible entry into muni wireless."

Patents by 8x8

8x8, Inc., provider of Packet8 VoIP service, announced that it has been issued U.S. Patent No. 7,272,553 for speech processing, issued from the U.S. Patent and Trademark Office on September 18, 2007. The invention covered by the patent relates generally to speech signal processing and, more specifically, to multi-pulse speech analysis and synthesis systems. According to certain embodiments, the invention provides a speech processing method and arrangement including a process applicable for use in connection with various standard speech encoding recommendations.

Since its establishment in 1987, 8x8 has been awarded sixty-nine (69) United States patents covering a variety of voice and video communications and storage technologies.

That's a lot of patents - that probably hold more value than their service. Look for litigation to start soon.

ELN Backs Away from Helio

It is being reported (every where) that EarthLink is backing away from investing any more into Helio, which is expected to lose $350M this year. Helio has about 130,000 subs now. But is burning through cash. Even though Sky Dayton runs Helio, ELN just can't afford to put any more money in. SK Telecom (South Korea) will put in about $270M and take a majority ownership stake in the venture. (Right now it is 50-50 with ELN).

ELN Losing Deals

“Wi-Fi woes everywhere you turn,” says Russell Hancock of Silicon Valley Network, a troubled Wi-Fi project for 40 towns in California’s high-tech corridor. [source]

Pasadena is just one of a handful of deals that EarthLink is losing now that they have adjusted their Muni Wi-Fi plans. Pasadena also has 226 former ELN employees looking for work.

Houston fined them $5M, but it got ELN out of the contract.

Phillie is holding a hearing about their muni plan with ELN.

On Wednesday, San Francisco officially scrapped its Wi-Fi plans. Chicago and Milwaukee recently shelved Wi-Fi projects. Other projects, such as Houston's, are comatose. Philadelphia's build-out, about half-done, has slowed to a crawl. Cincinnati's is on hold. [CNN]

While ELN is certainly at the center of this storm (which they brought upon themeselves, may I add), other networks also are facing the reality of finding a business model. According to TMC, "America's biggest network, around Tempe, Arizona, was aiming for 32,000 subscribers, but had only 600 in April 2006." Luponc only grabbed 250 users.

Maybe cities need to take a different approach - either slowly build out hotspots like Chapel Hill or build the network first for public/gov't use like meter reading, traffic monitoring, EMS communications, and the like.

ELN did add a $5 fee to their DSL subscribers. (They have 1M broadband subs, but I don't have a breakdown how many are with Covad, New Edge, cable, or ILEC DSL).

NN: Ma Bell to Filter Content

Ma Bell has a history of filtering your content (that's why the EFF is suing them over privacy violations re: NSA wiretapping.) Net Neutrality is NOT a concept that either RBOC is concerned with, especially now that they need content to fill those triple-play plans (FiOS + U-Verse). To get that content (or at least to maybe get reasonable discounts) AT&T has sided with NBC Universal. NBCU thinks that ISPs' should stop illegal downloads. Apparently, all execs live in a fantasy land.

One: is illegal download traffic 50% of all traffic? (NBC says that 60% is P2P; but this stat says P2P is 37%)

Two: the latency and CAPEX of such filtering would be huge. Think about it in terms of spam. Most spam boxes (like Barracuda) can only handle a max of 65k messages per hour for filtering. Can you image if you had to deep packet inspection on every packet running across your network? Big boxes would be required and administration would be a job in itself (like spam filtering is).

It's great in the ivory tower to say stupid stuff to get print and spin the comments to make you look good to the sheeple who buy your stock, but does reality set in? When they say Talking Heads -- that's about all they are.

For more on the MPAA, NBCU and ATT, read ARS.

SCO goes BK

SCO sued IBM over patent infridgement on UNIX, claiming that UNIX dripped into LINUX code. However, Novell sued SCO over the rights of UNIX - and won. In response to the court loss - and a possible $30M pay off - SCO filed BK.

SCO tried a new business plan in 2003. Faced with competition from LINUX, SCO decides to litigate instead of compete. (We see this a lot in telecom and tech). Now with a court loss and declining revenue, few assets, and debt, it's not suer if even BK can save it.

Resi VoIP follows the Rocket

Here's a round-up from dealnews.com on the current VoIP deals for consumers. Please remember that UNLIMITED is just a marketing term. If you actually use your VoIP line more than about 3 hours per day, you will be shut off or be forced to buy a Business Line by many providers.

• Vonage is giving away the store with 2 plans: $15 for 500 minutes w/free ATA; and $25 on unlimited calling including some of Europe, plus free month and free ATA.
• Voip.com has a $188 annual plan w/free softphone and free month. (No idea about ATA).
• ZingoTel is $20 for Unlimited Resi w/free ATA and free month
• Lingo is $22 for Unlimited Resi & 3 months free!
• ELN is $25 per month
• Packet8 Unlimited is $25 per month w/free ATA and free month
• att CallVantage is $25 per month w/a free month

Note that most providers have a $15 or $199 annual plan, but are pushing the higher ARPU plan. How many of these carriers then add additional fees / charges for E-911 compliance, USF (6%), Telecom Relay fee, and state taxes? att CallVantage adds about $5.80 in additional charges per month. (USF is $2.57, 911 surcharge is 50c, TR fee is 11c, state & local taxes the rest).

Yahoo Buys Zimbra

Telecomweb is reporting that Yahoo has bought Zimbra for $350M in cash. Yahoo is hoping to capture some business email clients. (Y! has 250M consumer email accounts). Email is still the killer app - Microsoft, Google, and Yahoo are just trying to figure out how to make more money from it.

From an ISP side, this is good news. Zimbra has a deal with Comcast, so even the cablecos know that business email can be profitable. Do YOU have a strategy in place to capture some revenue from premium email services? No? Then I'll see you at the ROUND TABLE!

Open Letter to COMPTEL

On October 7, COMPTEL descends on Dallas for its fall expo. Earl Comstock left in May and so has some of the staff. It's a great time to bring in a different kind of leader. But sooner rather than later because the clock is ticking.

What does COMPTEL need from a new CEO?

1. Someone to foster cooperation.
2. Someone to lead its members to differentiate and compete.

By now, COMPTEL members should be using each others' networks as much as possible. Why would you pay to terminate calls on the RBOC network when some portion can be terminated by other members?

Why isn't there more cooperation between members to maximize fiber and collocation assets?

The industry has to start looking at primarily selling Type I services, because all too soon access to cheap loops is going to dissipate. (If it is Type II, it should be purchased off another CLEC's network).

Maybe this is fanciful, but the last thing COMPTEL needs is another legal eagle to lead the group. COMPTEL has legal councel and just hired a firm to handle Advocacy. Not that many battles have been won in court, in DC or at the FCC. It's time to focus on a new tack. (Hope is not a strategy).

Call our office if you want to discuss this further (813-963-5884). If Sherm or Jerry James is looking for this kind of candidate, call... we have the names of some good applicants.

Nekkid Update

"Bundle 97" -- the super secret naked DSL 768k bundle from BellSouth. (I thought the naked DSL was supposed to be unbundled?!) Anyway, DSL Reports has the scoop here.

Paetec Gets McLeod

As consolidation continues in the alternative carrier space, Paetec buys McLeodUSA in a move that I just can't understand. The midwest CLEC has been BK twice and was planning an IPO in 2007. (Don't ask!)

Then news came today that the privately-owned CLEC is to be bought by PAETEC Holding Corp. in an all-stock merger worth $557 million. The deal, which consists of $492 million in PAETEC common stock and $65 million in net debt assumption, gives PAETEC significant new fiber optic network assets and a footprint spanning 18 states. [phone+]

While this deal appears good for McLeod and the footprint, the timing seems funny since the integration of USLEC and PAETEC has not completed yet. Maybe Paetec wanted to book more revenue than was gonna show organically. Or maybe this was a one-time deal (certainly not a fire sale at a half billion dollars).

From EDGAR, "As of December 31, 2006, we had nearly 1,600 employees serving approximately 101,900 residential telephone lines, 283,500 business lines and 14,300 T-1 circuits. For the year ended December 31, 2006, we had revenue of $544.7 million and incurred an operatingloss of $15.3 million. At December 31, 2006, we had stockholders' equity of$217.1 million and an accumulated deficit of $28.3 million."

Paetec paid a little bit more than 1 times Annual revenue for the McLeod, but what does the new company do with the 102k resi lines? And with all those fiber assets that are being mentioned, how is it that McLeod chased Resi and not medium sized business? Here's hoping theirs a strategy (other than let's get as big as we can).

Ma Bell is getting Nekkid

DSL Prime is announcing that AT&T is releasing Naked DSL to the public. Naked DSL? Yes. DSL whereby the consumer does not need to buy a phone line. (Let us mention that this was a merger requirement for AT&T and BellSouth.). Randall Stephenson proclaimed that "AT&T is a wireless company". In a test, bundling $45 Cingular service with $19.95 DSL Naked produced a surge.

DSL Prime disclosed that "Around the world, DSL has reached a peak, with net adds inevitably declining. Wireline phone service is headed down, although still one of the most profitable businesses on the planet." So with both DSL and cellular sales flat. (PEW is confirming this). As Wall Street closely watches both metrics, Randall is readying to roll this bundle out throughout the footprint.

This doesn't help most ISP's, because they will have access to a similar bundle. My suggestion: If you are in any of Cbeyond's markets, this carrier already has a cellular-wireline-internet bundle. Otherwise, work with New Edge and Helio or Covad and Sprint to sell your own bundle.

ISP Growth and Decline

Obviously, AOL and EarthLink are seeing a decline in numbers (each lost about 1M, according to DSLReports) as dial-up users shrink. DSL is slowing according to PEW. This might be due to the fact that much of the dial-up base that wants broadband has converted. However, "Technically, the nineteen largest cable and telephone providers in the U.S. account for 94% of the [broadband] market," according to DSL Reports and ISP-Planet.

"47% of all adult Americans now have a high-speed internet connection at home, according to a February 2007 survey conducted by the Pew Internet & American Life Project." [source]

"Rural Americans: 31% of those living in rural areas have broadband at home, up 6 percentage points from 2006. "

The problem becomes how do you get more internet enabled devices (i.e., PC's, laptops, mini-computers, media center servers) into households without devices? Also, how do you market to the older Americans, women and Hispanics - the segments that are growing the fastest?

A Look at VoIP from Packet8 CEO

Bryan Martin, the chairman and CEO of 8x8, was the keynote at the TMC IPT Expo in LA this week. He had much to say about the VOIP Bust going on.

“SunRocket is not the only company having problems. We know of about three or four major players in the space that have significant customer bases, they’re all into both business and residential applications, and we’ve heard rumors that they’re interested in exiting the market as VoIP service providers. There’s a list on the web of more than 100 companies that either have full-fledged services or at least websites offering VoIP services that have announced that they’ve shut down and no longer offer services, or else they’ve announced plans to do that within the next six months.”[TMC]

"Everybody uses Skype, but it’s not a complete replacement. Second, when you add in the fact that you must interconnect to the PSTN and that the PSTN is going to be around for a long time, and mobile phones are going to be around forever, then the cost of the interconnection to a carrier such as ourselves at 8x8/Packet8 is going up."

So the prices have to go up. No kidding! Then why is everyone, including Packet8 taking in SunRocket customers for the same rate as SunRocket?! Packet8 picked up roughly 9000 SunRocket customers at approximately the same $199 per year rate.

Further on, he discusses differentiation. Ha! Packet8 was profitable this past quarter due to many one-time charges. There filing even suggests that theur business customer revenue helps offset loses from the consumer division. What a model. 8x8 has been around a long time and has burned through some significant investor cash. I don't know if Martin should be sounding so confident. He hasn't proven his model yet either.

NTP Sues Cellcos

In 2001, NTP, a patent house, sued RIM over a patent breach on the Blackberry. NTP won. RIM tried to appeal to fight it some more only to settle for $613M AND to lose market share to both Palm and Microsoft Mobile devices in the wake of the scare. (DUMB!)

Well, NTP is now suing the top 4 cellcos - VZW, att, Sprint and T-Mobile for similar patent infringement.

In their new round of suits, NTP is alleging that some of the telcos' new e-mail-to-mobile services, such as those delivered by the T-Mobile Wing and AT&T Xpress Mail, infringe upon their patent rights. NTP wants an injunction and is demanding unspecified damages. [pcworld]

Again, this might be an opportunity to offer your clients mobile email from Funambol or other open source app - OR via MS LCS OR outsourced. Become the savior. It pays.

Answer the Phone!

According to MarketingVox, in a recent survey, "Eight of 10 Americans have little patience for merchants who don't answer the phone." The implications are clear: Answer the phone. If people wanted voicemail hell and being on hold, they would choose to go with the cheapest and biggest. (Isn't that the biggest complaint against the telcos?) Well, many of my clients have installed "sophisticated" phone systems that do not make it easy to get a human either.

"Voice mail, answering machines, unreturned calls, and unanswered ringing will send your customer straight to a competitor."

This is a good opportunity to sell unified messaging and Hosted PBX, especially with ring to all, find-me/follow-me, voicemail to email, call forwarding.

Web Hosting Round Up

Looking at dealnews.com, I was amazed at the number of hosting deals. It reminds me of how PC's and laptops are sold to the consumer - lots of GB's and numbers thrown in there. Most people do not need 120GB of space for a website (unless they are hosting media, in which case as a hosting provider, do you really want to be the cheapest?) Cheap hosting is all about volume, scale, and numbers - and knowing that the average joe is not going to use much bandwidth. (My website sits on about 120MB of space and uses less than 20MB of transfer per month). And who needs 2500 email accounts but spammers? The only thing notable was bluehost's streaming audio and video support, and a host of e-commerce and community features. My advice: Don't race to the bottom - sell in a niche.

VZW Sues FCC

Once again the 900 pound gorilla turns to litigation when its massive lobbying efforts fail to give them what they want, which in this case would be the tried and true spectrum auction that has allowed VZW and its brethren unfettered access to spectrum to create their multi-billion dollar cellular empires. Cellcos like closed networks, that mean you can only use features that they approve on phones that they approve. These closed gardens result in millions more dollars from approved vendors. Open access means a consumer can bring any device including, gasp, handsets that allow unfettered access to VoIP, IM, and other common PC communications applications. However, these apps mean less revenue for the Gorilla. And the FCC is supposed to help feed the Gorilla. (At least it has been since I've been in the industry). Sue Crawford and FreePress have details on the lawsuit, which will delay the auction. TechDirt has a similar POV. [this was also posted at wispa.org]

FCC Delays Forbearance

As Phone+ writes, "AT&T Inc., Embarq, Frontier/Citizens Communications and Qwest all want the FCC to free them from rules that govern how they share their broadband networks with competitors and how they price those wholesale services. But commissioners appeared to be concerned about granting more Bell relief as they also consider whether to deregulate high-capacity special access."

The FCC pressured Qwest to pull its DSL (broadband) forbearance petition, which it re-filed 2 days later asking for an expedite, according to the Denver Post. Meanwhile, FCC Commissioner (and former COMPTEL employee) McDowell says he hasn't met a petition for deregulate that he hasn't wanted to pass.

Since 2005, Forbearance has been a hot issue, aggravated by the FCC in March 2006, when it failed to act on Verizon’s request for relief on broadband regulations, thus allowing it by fiat. (see more on this below)

Stifel Nicolaus analysts said on Tuesday the FCC seems to want to clarify and even pare back that relief. Verizon says the agency can’t legally do that without opening a new rulemaking. The company also contends there’s no market failure that would justify such a proceeding.

Let us not forget that VZ has another forbearance petition (WC Docket No. 06-172) pending that would Unregulate it in six Eastern MSA's - Boston, NYC, Phillie, Pittsburgh, Providence, and Virginia Beach, which the FCC extended for 90 days on August 15, 2007.

CyberTelecom has a list of the petitions here.

• WC Docket 07-12 is from Cablevision Lightpath.
• WC Dkt 06-147 is from Frontier/Citizens filed on 9/13/06.
• WC Dkt 06-147 is also Embarq's BB petition filed 8/17/06.
• WC Dkt 06-125 is BellSouth (now AT&T) DSL from 7/20/06
• WC Dkt 06-125 is also the original Qwest BB docket from 6/13/06
• Dkt No 04-440 is the VZ Petition that, pursuant to section 10(c), the relief requested in Verizon’s petition was deemed granted by operation of law, effective March 19, 2006.

In response to 04-440 and 06-125 and 06-147, VZ writes this to the FCC:

There are, however, pending forbearance petitions in the other two dockets, and those petitioners have shown that there is extensive competition nationwide to provide stand-alone broadband transmission services to the sophisticated, highly lucrative enterprise customers that purchase such services.

In case you don't know what VZ was granted, they let you know here:

The stand-alone broadband services at issue in the pending forbearance petitions are the same high-end, enterprise services for which Verizon already received relief. These services, which are among the most sophisticated services on the market, include (1) all packet-switched services capable of 200 kbps in each direction and (2) all non-TDM-based optical networking, optical hubbing, and optical transmission services.1 These services do not include traditional TDM-based special access services, such as traditional DS-1s or DS-3s. Id..

YET

The Fight Is Not Over the Desktop?

According to this post by Joe Burton, CTO of unified communications at Cisco, the fight over the desktop is heating up. Cisco with its Webex Office Suite coupled with its Linksys and Scientific America gear against Microsoft's Live Communication Server. Google in the wings. Want a good strategy? Pick one. Become a specialist / certified. Logo up. And start selling / implementing that software suite to the SMB space.

ELN CEO Talks

WiFiNews has an interview with EarthLink CEO Rolla Huff about muni wi-fi and the rest of the company. Obvious points were made about the "old" muni wi-fi model not working - and the need for a new model which may have to include hardware manufacturers.

Huff touched on dial-up, ELN's shrinking cash cow:

I had heard and see the statistics that the U.S. dial-up market, while declining is also maturing—that it’s likely we’ll hit a stable point at which the people who cannot obtain faster service or aren’t interested in broadband will remain a relatively constant pool. Huff said there is an inflection point. [Ed. Does he mean Tipping Point?]

There is some talk about the synergy of WiMax with Wi-Fi, but really the problem isn't network. The problem is customer acquisition.

A fundamental problem for EarthLink now... is the cost of acquiring new customers. EarthLink’s long-term customers have a good staying power, but customers they spend a lot to acquire also tend to churn faster, making them highly unprofitable. Huff seemed to make the point that EarthLink needs a way to bring on board many customers cheaply, which implies partnerships with firms that have existing customer bases that those firms can inexpensively provide information to.

Looks like Hosted Apps Are Arriving

In a PC World article, evidence is pointing to medium businesses choosing hosted office suites over buying MS Office licenses for desktops.

Like Adison & Partners, thousands of organizations, large and small, are researching and implementing hosted office suites as alternatives to pricier, traditional options, like Microsoft Office, designed to live in PC hard drives.

Cisco's Webex's WebOffice, Zimbra, ZOHO, Salesforce.com, OpenOffice, AppExchange, and many more. So many choices for hosted apps or SAAS.

And let's not forget Google Apps, which just signed a distro deal with Capgemini, an IT consulting firm. [techdirt]

Security concerns. Backup/integrity issues. Lack of ubiquious access. These are all reasons to look at SAAS / Hosted Apps - as well as reasons to stick with in-house apps.

Job Growth

Tom Peters writes about the US job growth rate.

To get to a net of 500,000 we actually created 7,700,000 new jobs—and lost 7,200,000. Now that's a whole different kettle of fish! America's longterm economic strength is hidden here, or not so hidden—we are an insanely dynamic economy, growing and shrinking with near reckless abandon"

Fighting over exclusive Content

Apple had the exclusives with iTunes for NBC. NBC gave access to Amazon now. Exclusive content means that your customers have to buy into the channel of the exclusive partner - whether that is an iPod or cell phone or some other device.

Now cable operators (cablecos, telcos, DBS) are fighting over TV content. DirecTV has the exclusive for NFL Ticket. Now Grande has an exclusive on some Dallas Cowboy football, that gives it an advantage over TW Cable, who has not reached an agreement with NFL network in over a year.

New entrants are not worrying about how much the content costs - right now. But cable and DBS (satellite) companies have been at it while and know that you can't negotiate backwards and you can't put the genie back in the bottle.

Pittsburgh Downtown Wi-Fi Unpowered by USWO

I had thought that USWO (US Wireless Online) was done. It was a wireless roll up attempt that was failing last I heard. (Some operators took their WISP back). Now the Pitt BizJournal is talking about how the Pittsburgh Downtown WiFi project powered by USWO may be turned off. In the same article it discusses how USWO left part of its network down for almost a month. Um, maybe the writer is missing the bigger picture: If USWO can't keep its network operator for paying customer....

Office 2.0

Andy@VOIP Watch discusses his disappointment with Office 2.0. It was missing Presence, Voice, and Video. (Maybe that's another conference with Cisco fighting out with Microsoft while IBM/Lotus tries to get in). Anyway, Jaffe posts about the crayonville - a virtual office. I have read where adidas has a store in second life that they pay real people to run all day! Jaffe points to an ABC report about the office of the future. (on YouTube). If you want to help businesses with productivity, this might be a start. Managing avatars in a virtual world is easier than trying to manage tele-workers that you cannot see, touch, or interact with.

8-port ATA!

Linksys releases the SPA8000 in the US. The SPA8000 is the way to connect legacy analog devices to a VoIP network via this newly released 8-port FXS Analog Terminal Adaptor (ATA). Review are linked at Voxilla.

MasterMind

Seth writes about a mastermind group he was involved in at Stanford:

As a young first-year student at the Stanford MBA program, Chip Conley picked out four other students--strangers to him and to each other--and invited them to a weekly brainstorming session. He explained to us that once a week we'd meet for four hours and brainstorm business plans and entrepreneurial ventures... A year later, we had compiled more than 500 great ideas, countless lousy ones and had figured out how to think about the structure of a business. I think the five of us would all agree we learned more in that room in the anthropology department than we did in the classes we were paying for.... The extraordinary thing about Chip's little bit of initiative in setting up the group is how rare it is.

This is a MasterMind group. Napolean Hill wrote about it in Think and Grow Rich - How a shared mind is greater than the sum of its parts.

If you have problems, issues or ideas that you need to work on, bring them to a Round Table, where you will meet like-minded industry professionals to help you with them.

Hugh at GapingVoid.com

Hugh MacLeod is a marketer that creates cartoons on biz-cards. He brings you The Hughtrain, a manifesto on brands, blogs, and the now of advertising and marketing. Written and illustrated by himself.

Is the Web Changing Politics?

Mark Cuba says that the web is dead and boring. He's correct in the sense that the transport (pipe) isn't changing much (it's still too little). Truth is Content is king. Killer Apps drive Broadband usage (and penetration). Cuban says that since the pipe size is static and small, innovation is slow. (You need a big pipe to the home to really innovate).

I'm thinking that the main populace is just catching on to the way you communicate online. Early adopters are probably almost bored with it. But newbies are using it to challenge every status quo. Take politics for instance. There are 20 meet-up groups for politics right now. Ron Paul has over 100 people just in Tampa using an easy to understand platform like MeetUp.com. It's a simple way to organize around an idea and schedule events. A lot easy than offline, where you have to find people with a similar interest. That is much harder.

So for the newbies online, this is all remarkable. To those that have been online pre-1996, well, yawn, it's cool, but what's next?

As an ISP owner, these are the things that make people want to get broadband. If you were using a widget or email that listed the cool site of the week, you would captivate your audience.

Cell Phones on Airplanes?! Jam!

In some nations around the globe, cell phone usage on a plane is okay. Geez! You are jammed into a coach seat with no legroom - and now I have to listen to the guy/gal to my left and right yap away on their cell phone too? I'll be looking to buy one of these, for just $50 - a cell jammer! Illegal in some places probably, but what about my peace of mind?

A Day on the Links

On of my clients, Spiderhost, a managed services provider, held their 2nd annual golf outing on Friday. There are a lot of benefits to the tremendous amount of time and effort that it takes to coordinate an event like this:

• What a great way to spend half a day with a client
• How else can you showcase how friendly your staff is?*
• Display your wares - as raffle gifts and prizes

Dave Shilling, the Sales Manager for AstroTel, was in our foursome and ended up winning the 2-person scramble skin. (Apparently, they do EVERYTHING right at AstroTel, a Florida CLEC that is top-notch in TDM and LNP.**) His partner was James Gentry of LATA Communications, a BellSouth agent.

Dustin Jurman of Rapid Systems, a wireless network operator, got stuck in the cart with me and my F game. We came in dead last -- but won a golf lesson! (Sorry, Dustin. Last year Dale got stuck with me. Next year it will be someone else.) We did learn that SoluNet is still in business - and apparently going strong selling Juniper instead of Redback.

* The Spiderhost team - Dale, Nick, Jenn, Crystal, and Kristy - spent the day demonstrating how nice, friendly, and customer-centric they are. Nick, one of the techs, was able to identify the owners of the equipment in the slideshow of their data center. ** That's why RAD-INFO is proud to be an agent for AstroTel. Call our office for a quote. 813-963-5884.

Digital Collection System network

Digital Collection System network is the new name for the FBI's point-and-click wiretapping system. Details are here. And here. It's far more extensive than anyone believed.

Zayo Bandwidth = New Fiber Company

What do you do after you found Level(3) and ICG - and a bunch of VC's give you $225M? You start a new metro fiber company - called Zayo - by buying other fiber networks.

"Zayo has acquired PPL Telcom, a 4,600 fiber-route-mile network based in Allentown, Penn. serving areas throughout the Northeast, and Memphis Networx, a 200 fiber-route-mile network serving the greater Memphis, Tenn. area." [source] "Additionally, Zayo had previously reported that it has agreed to purchase Indiana Fiber Works of Indianapolis and Onvoy Inc. of Minneapolis." [source] "Both companies were acquired under Zayo Bandwidth’s holding company name, Communications Infrastructure Investments (CII). In addition, Zayo Bandwidth has signed definitive agreements to acquire Indianapolis, Ind.-based Indiana Fiber Works (IFW) and Minneapolis, Minn.-based Onvoy, Inc. which are expected to be finalized in the third and fourth quarters of 2007, respectively."[source]

When all is said and done at the end of 4Q07, the company will have $125M in revenue, 8,400 route miles of fiber, and reach 830 buildings.

Best part of Light Reading article: "Founders Dan Caruso and John Scarano met at carrier MFS, which was later acquired by WorldCom (R.I.P.). Most notable is their involvement at Level 3, where Dan was a founding executive. Dan and John left Level 3 to take over ICG Communications, which they took private in 2004 and sold to – wait for it! – Level 3."

Data Center Real Estate Factors

In an excellent article from ISP-Planet, WSTA Data Center Seminar: Data Center Real Estate, Alex Goldman recites what the EVP at Tishman describes as the important factors when looking for a site for a data center:

Choosing a data center site, Bowman said, requires juggling a massive number of variables. You want access to power and fiber. If you're using water cooling, you want access to water and space for a reservoir. You want to know whether the land you're looking at it subject to flooding or other hazards. There are legal and regulatory issues. You want to know the state sales tax. He urged financial companies to think outside the box, which is the local area. "You may need to back up critical apps in Connecticut, New Jersey, or Pennsylvania, but non-critical apps can be backed up in states where there's no sales tax, such as Oregon, Georgia, or New Hampshire."

The rest of the article explains about the Wall Street data issue coupled with business continuity planning.

Push Email like Blackberry

First there was Funambol, the "open source mobile application server that provides push email, address book and calendar (PIM), data synchronization, and device management for wireless devices, leveraging standard protocols such as SyncML. For users, this means BlackBerry-like capabilities on commodity handsets." [wikipedia]

Funambol Mozilla Plugin is a Mozilla plugin that allows the synchronization of calendar(s) and addressbook between Mozilla Suite (Firefox and Thunderbird) and the Funambol server and, therefore, with any SyncML client (such as mobile phone, PDA, ...) [download]

Now, Sarah in Tampa points out that emoze is doing push now as well.

New from emoze is a service that will "push" your personal emails to nearly any mobile handset that supports email, including Nokia, Samsung, and Motorola devices. With the emoze service, you can receive your emails as well as manage other Outlook data, like your contacts and meeting requests. In addition to Microsoft Outlook & Microsoft Exchange, emoze also supports Lotus Notes Domino servers and POP3 online email services such as Hotmail, Yahoo! and Gmail. Yes, Gmail. Push Gmail. Unbelievably, the emoze service is totally free.

Spice Works Available

Sarah in Tampa points out that Spice Works for IT people is available at no charge.

Introducing the free Spiceworks IT Desktop. Designed, tested and used by 120,000 IT pros in 185 countries. Spiceworks has the everyday IT features you need:

• Inventory and report on your company's hardware and software assets automatically.
• Monitor and troubleshoot the hardware and software on your network.
• Run an IT Help Desk for your company that's easy to use.

Does Retail VoIP Work?

Certainly there are numerous VoIP Providers out there. Many that offer retail service and just as many that offer wholesale services with some offering both. VZ is now pushing the MCI Wholesale VoIP service including a new feature (virtual NXX). VZ won't call it Virtual NXX because it has been fighting CLEC's like GlobalNAP over this for a couple of years. So VZ calls it Foreign Telephone Number Assignment (FTNA). Any how!

Telephony mag has an article about Momentum Telecom in Alabama, a former UNE-P CLEC that now offers Wholesale VoIP. Why not retail? " The cost of customer acquisition could rapidly jettison a business case.... Alan Creighton, president and CEO of Momentum. says, “The cost of customer acquisition was just too high.”

That's as realistic a view as I have seen in telecom in a while. I figure the others are in it for the short haul and are just trying to rake in some dough before moving on to the next thing.

Most of your VoIP Providers are far removed from the actual engine that is the phone platform. Most buy minutes and DID's from resellers, who in turn buy them from someone else. No network. Just an Asterisk box or two -- or for the shining examples a Broadsoft, Sonus or Sylantro softswitch -- at a data center where you cross-connect to bandwidth, minutes, maybe the VPF or ENUM. Outsourcing the network and services removes the provider from being able to manage or control the quality.

Andy and I Agree on EarthLink

Andy @ VOIP Watch has a post about EarthLink that mirrors my own thoughts. Since Gary Betty's death, the company has been sliding. There was probably no succession path and Sky Dayton has his hands full with the leaking bucket that he calls Helio. The silos at ELN - DSL, cable, dial-up, and muni - are all vying to meet numbers, even at the expense of another silo. (See the blunder in Alexandria where days after announcing that ELN would run the muni network, ELN direct mailed the city for DSL). No one knows what is going on over there.

And bringing in Hoff was a sure signal that it was time to sell. He showed up carrying the for sale sign, I think.

What's working? Certainly none of the execs, because all sub numbers are flat or decreasing. Nothing innovative either. All those properties and no bundling or cross-selling or anything that can be misconstrued as an original idea.

Muni Wireless was going to be expensive, but from things I have heard it was such a naive cluster that everything ended up costing triple. Even the marketing, which was their forte is off. Muni WiFi should have been about "take your broadband with you" and "it goes where you go", not let's try to undercut DSL and cable. Certainly, the VoIP over WiFI push was foolish when your vendor, Tropos, was telling you that wi-fi can't handle VoIP well. And videoconferencing via the Nokia was unique, but mesh is not really designed for 384k packet streams in real time either.

I don't understand how the Muni play wasn't an add-on to their dial-up and broadband base. Or how Helio and Muni weren't bundled. Or Helio and New Edge. Maybe bundles like that would have disrupted internal politics, but I guess that won't be an issue now that half the staff is gone and Huff brought in his buddy to run things as COO.

ELN Crumbling?

Telecomweb writes about recent decisions at EarthLink in an article titled, "EarthLink Crumbles As Second City Ditches Wi-Fi". ELN announced layoffs of 900 employees - half its workforce - to save money.

"The EarthLink executive believed to have been responsible for the muni Wi-Fi efforts has been unceremoniously dumped.... However, in a filing with the SEC, it revealed that "the position of Executive Vice President and President-Municipal Networks, held by Donald B. Berryman, is being eliminated, and Mr. Berryman's employment with the Company is terminating." "

Chicago = no. San Fran = no. Houston = no, including paying the city a $5M late fee. Phillie = who knows? One of the offices closing is responsible for Phillie.

The big shocker from the new CEO is this statement:

"These changes get our cost structure in line, but there is much more to do," says EarthLink President and CEO Rolla P. Huff. "We expect to announce additional steps as we continue our work over the coming weeks and months."

But the rest of the article is equally telling. (Lessons here for everyone!):

The shutdowns will cost between $60 million and $70 million, at least partially offset by between $25 million and $35 million in saving through the end of 2007. Bottom line, EarthLink now expects to lose between $33 million and $43 million in the quarter, and between $79 million a $109 million for the year as a whole. Discussing the conditions that led to its decision to slash staff and closes offices, EarthLink issued a statement saying, "Given current trends in the Internet access industry, management expects industry-wide gross subscriber additions to decelerate in 2008. This will result in fewer gross subscriber additions for EarthLink as it will no longer add new subscribers that do not yield a positive lifetime value for our shareholders. Additionally, as subscriber growth slows, the company expects to realize fewer migrations from narrowband to broadband." Indeed, most analysts point directly at EarthLink's inability to make the transition from the era of dial-up to broadband as the company's biggest problem - just as it was for the ill-fated AOL broadband access business.

The blame is everywhere. ELN lost DSL subs when it terminated the Embarq DSL deal this year. Most Dial-up ISP's are experiencing an increase in churn partly due to a decrease in the price of DSL in many markets ($10 in BST area; $15 in many other places). Without owning the network, it is difficult to offer broadband at a competitive rate. The day of selling just connectivity is kind of over. (How can you even build a network and compete with $15 DSL? There isn't enough there for an ROI on the network and advertising expenses).

So with dial-up cash flow shrinking and the cable and DSL subs flattening, as Gary Kim points out here. Broadband and cellular have flattened because the demand has basically been met. And in a flat market, like TV, you are basically stealing customers from competitors. This makes acquisition (and marketing) costs high.

I don't know if this solves the problem of being UNFOCUSED, but it does partially address the cash-flow game in the short term, maybe. ELN announced it was going to spend $270M to buy back stock, but Just where that $200 million is coming from, though, does remain questionable because, according to its SEC filings at the end of June, it only had $127.6 million in cash and cash equivalents. [telecomweb]

This doesn't answer the questions of the money pit known as Helio and the as-yet unprofitable New Edge. (And Covad probably isn't going to get another cash infusion from ELN). BTW, Helio slashed 15% of its employees, too, according to Telecomweb.

Some ideas for you, Mr. Huff: Move all your DSL customers to New Edge's or Covad's network where available. Bundle voice, wireless and broadband. Helio should be selling wi-fi enabled handsets. FMC for the SMB Market? Let New Edge Agents sell Helio and EarthLink.

Oh, Don't pull a Hook, Huff! ELN hired a new COO. In typical telecom fashion, Huff hire his good friend from Mpower as the new COO.