Blocking Bits and Editorial Control

Sue Crawford has a couple of blog posts (here and here) about the Net Neutrality debate. There have been 4 biggies: one was blocking free conferencing calls, and the 3 she mentions:

Like the Verizon/NARAL flap and the Pearl Jam escapade, here’s another story about currently-legal action, permitted under someone’s elaborately-walled Terms of Service, that interferes with basic communications. Comcast will say “we’re not blocking.” But they’re degrading, prioritizing, and filtering, without telling users. And they’re planning to do much more of this. What’s the solution? Structural separation. You’re either a plain-vanilla transport company serving all comers, or you’re something else competing for our attention. But this mixture, this hybrid of apparent-communication plus editorial control, is unacceptable.

At some point, we will have law which will be messy and awful. Thanks to the big guys for bringing this about.

Virtualization is a Hot Stock, Savvis not

According to Data Center Knowledge, virtualization stocks are hot right now. (CDN shares not so much). VMWare stock is up almost 200% from just 3 months ago.

Savvis had $190M in 3Q07 revenue and posted a $5M profit, including a $1.9M tax benefit. Savvis is also projecting to be a $900M company in 2008. Apparently, they are hoping for big things from the data centers that they opened in Atlanta, DC, NJ, and Santa Clara in 2007. Including the last 2 new centers to be opened in Chicago and Boston very soon, Savvis will have 29 data centers in the U.S., Europe, and Asia.

Sprint XOHM = Open Network

Sprint has been making announcements lately about Open Networking. Due to a class-action lawsuit Sprint PCS customers will get the unlock code for Sprint - not Nextel - phones. That means Sprint customers can take thier phone to Alltel or VZW.

The part I like is that by settling, Sprint has opened the door. With T-Mobile and ATT also facing class-action lawsuits about locked phones, we may see some more unlocking.

Sprint also made mention that XOHM will be open access. We'll see what that means as it rolls out next quarter.

VZ Forbearance could cost $2.4B

According to a study by QSI Consulting, if VZ gets forbearance in the 6 MSA's, it will cost customers $2.4B in higher costs. (I found the study on the Huffington)

I didn't see this is the EDGAR filings of any CLEC's but Cbeyond:

Verizon has said that if it wins its "forbearance" relief, it will charge its competitors according to a different price schedule - one that's higher than the prices they pay now. For example, in Boston, a particular type of circuit for which a competitive company now pays $572.12 monthly for under the current pricing plan would cost $2,375.50 under the price schedule Verizon has said it will use. In New York, another type of service that competitors needs now costs $60.57 monthly; it would go to $328.70 under the plan Verizon has in mind.

Art Brodsky then goes on to quote a GAO stufy about the effect forbearance has already had on big business circuits:

There's little competition around already for consumers and, surprisingly, for big business.... But the Government Accountability Office, in a landmark study found that in places where the FCC has already given telephone companies new "pricing flexibility" on the assumption that competition would keep prices in line, prices are either the same or higher than in places where prices are still regulated. That's because the market for certain heavy-duty services used by businesses is much less competitive than previously thought.

Brodsky agrees with me that the FCC is way out of touch on what is actually happening in the industries that they regulate. Not that K-Mart cares at all; he has his mission after all. Brodsky says it here:

"The majority of the FCC believes in the myth of competition, even as it helps to kill off competitors. There's no reason to think that at the end of the year, Verizon won't get much of what it wants when this request comes up for a decision, even though there are lots of reasons it shouldn't.[source]

ISPCON Session is a Big Hit

The Fall ISPCON in San Jose was the 2nd of the Jupiter Events and it certainly looked different. (I posted about it when I got back, but the buzz is just hitting the media). A wireless track put together by Charles Wu and a variety of new sessions. I ended up with 3 sessions - Social Networks and Web 2.0, Hiring 101 and the notable 50 Ideas in 50 Minutes. Why notable? Well, Jack Brandt and I first did this session in Orlando and re-vamped it for San Jose. Packed room both times. Very interactive this time. Alex Goldman at ISP-Planet has the write up. We have the DVD!

BTW, Alex also has written a review of my book, SELLECOM!

Pre-order SELLECOM today and save $5!

Ma Bell 3Q numbers

• Quarterly income is $30.1B and quarterly net income is $3.1B.
• Cingular added 2M cell subs = 65.7 million subs
• U-verse has 126,000 subs (no wonder att is bidding on DISH)
• U-verse ouch: "That service got off to a slow start because of glitches with the relatively untested technology, which uses software provided mostly by Microsoft Corp. U-verse also experienced a systemwide outage Sunday, caused by a software change that affected the database used to track which channels customers receive, Lindner said." [source]
• 9 month 2007 total: revenue reached $88.6 billion, Net income, at $8.8 billion.

USF Reform - the first steps

The FCC is reportedly making deals with cellular companies about capping their USF funding. To get approval for their buy-out, Alltel had to agree to be capped at its current funding rate of $299M per year. (Alltel is the largest recipient of USF funding -- Alltel is also the most rural cellco). Since ATT wants approval to buy Dobson, it will have to okay a similar cap. "Dobson received around $32 million and AT&T about $82 million from the fund through September."

FYI:

• "Last year $4 billion was paid out by the fund to subsidize the cost of wireless deployment."
• "In total, $7 billion is set to be paid out by the fund this year."
• "It is expected that the same condition would be attached to Verizon Communications Inc. (VZ), which announced plans to buy Rural Cellular Corp. ( RCCC) for $2.67 billion in July, shortly after AT&T's deal was made public."
• Cellcos are not get E-911 compliant.

Is the Google Plan Disruption at its Finest?

CNet News.com has an opinion piece about what Google can do with the 700 MHz spectrum set to auction. Reisinger makes some good points about what Could happen, but reality is another deal.

1. The spectrum doesn't get released until 2009. And with ATT buying Aloha's 700 spectrum, they have the advantage / head start.
2. Equipment is limited and expensive.
3. This spectrum is not the be-all-end-all. It still requires NLOS. It only gets 54Mbps in the 12 MHz block -- about the same overall throughput as 802.11g.
4. It would take a LONG time to build out the network. Long time.
5. It would require big money. Let's say just $6B for the spectrum. Then about $20M per NFL city (about $640M to hit 32 cities).

That being said, if marketed correctly and unlocked devices will work (like a GooglePhone and the Nokia N models as well as the open-source handsets and laptops) then the public would certainly use the network, which would result in a dip in revenues to the Big 2 cellcos. They'll just make it up with special access rate hikes.

If the comments on the VZ Policy blog are any indication, customers in the US are fed up with the current state of telecom. And Google - or whoever makes the most changes - will win.

Ravi Preaches SAAS

At ISPCON, one of the themes has been SAAS (Software as a service). If you follow press releases, you would know that JamCracker is finally getting apps on its App Delivery Platform. And Microsoft is throwing out Apps left and right for hosting - CRM, Dynamics, SharePoint, Project, and the mac daddy: Exchange. Ravi of GroupSpark has been an evangelist for Hosted Exchange for a while - and he should GroupSpark private labels Hosted Exchange for providers to resell as SAAS without the headache of running Exchange and trying to get it to scale. The WHIR has an article about Ravi's session at ISPCON here. Another review of the hosting track, including the sessions by HostMySite CEO Lou Honick and by high-powered attorney David Snead, can be read at WHIR also.

ELN 3Q07 Numbers... more loss

From TechLinks:

EarthLink, Inc. today announced financial results for its third quarter ended September 30, 2007. Highlights include:

1. Revenue of $298.8 million
2. Loss from operations of $(35.9) million
3. Adjusted EBITDA (a non-GAAP measure) of $37.9 million
4. Net loss of $(79.4) million, or $(0.65) per share, which includes a$(41.9) million, or $(0.34) per share, Helio equity loss and a $(54.8)million, or $(0.45) per share, facility exit and restructuring charge.

Where is the growth? 6.8% growth came from advertising, search and incremental services (whatever that is!). Consumer access services revenue dropped 13%, "driven by declines in narrowband subscribers. Additionally, business services revenues decreased to $46.8 million, or 2.9 percent. This was due to decreases in legacy business services like web-hosting and business narrowband, partially offset by increases in small and medium enterprise access services. Overall revenues decreased to $298.8 million, or 9.8 percent, compared to the third quarter of 2006." [techlinks]

"In the third quarter Helio generated $51.7 million in revenue, while its net loss was $(92.3) million, as it continued to make investments in infrastructure, products and marketing to support future growth."

"EarthLink ended the third quarter with $333.8 million in cash and marketable securities, an increase of $175.7 million from the prior year quarter." But ELN fully expects to generate $200M in cash in 2008 and $1.1B in revenues in 2007. Meanwhile, AT&T in Q307: $30.1 billion.

Net Neutrality Debate Continues

Many people have stated that the government needs to keep its hands off the Internet. I agree to an extent, but when you have the ILECs blocking calls to Iowa, VZW blocking text messages to Pro Choice, and AT&T censoring Pearl Jam - AND the F-Agency in charge (K-Mart's FCC) does NOTHING! - that's when we need to abolish the FCC and given the FTC more enforcement power for false advertising.

If you say UNLIMITED, you give Unlimited.

If you sell 6MB, you give 6MB - not some version of "Best Effort"

Truth in Advertising is the basis for consumer confidence.

Anyway, I'm not alone in thinking that the gov't has to step in. BusinessWeek has an opinion piece about this.

"The hands-off approach hasn't served consumers well. And the Web is far too important to entrust the free flow of information to the shifting whims of a few big companies. Government must step in and tell them to leave our content alone.

04-440

CLEC's are still working on the VZ Forbearance petition (04-440) that was granted by order of law. CLEC's have petitioned the FCC for a Motion for expedited order on VZ petition for forbearnce. Excerpted:

By March 20, 2006, the Commission had not issued a wrtten ruling granting or denying the petition on the merits, and instead issued a News Release notifyng the public that "the relief requested by Verizon's petition was deemed granted by operation of law, effective March 19, 2006." The Commission also issued a Joint Statement from two Commissioners - Chairman Martin and Commissioner Tate - explaining that while none of the Commissioners supported granting Verizon the full relief sought in the petition as drafted, Chairman Marin and Commissioner Tate favored granting the petition as limited by Verizon's February 7 Ex Parte..... Neither the News Release, the Joint Statement, nor the separate statements of Commissioners Copps and Adelstein disclosed that the Commission had voted on an order addressing the merits of Verizon's petition. Chairman Martin later acknowledged, however, that the Commission had taken a formal vote on the matter. Chairman Martin stated that "(the Commission. . . by a recorded 2-2 vote, neither granted or denied Verizon's forbearance petiton." Chairman Martin further stated that "(there still is no majority view on the appropriate outcome of Verizon's petition" and that "because there was not (and is not today) a majority view . . . we were unable to take the preferred course of issuing an official written decision."

It's crazy that no decision becomes a default yes. It's irresponsible. But then this is the F-Agency.

In reading the CLEC arguments against all of VZ's petitions, the claim is that there has not been enough fiber penetration in the 6 MSA (06-172). In fact, "XO Communications - one of the nation's largest facilties-based CLECs, with over $6 bilion in network investment - has been able to build directly into only approximately 3,000 buildings out of 6.9 milion nationwide." Well, that's poor allocation of cash and resources. Some of the CLEC issues are their own fault. Each should have picked an MSA and just become king of that area - fiber, lit buildings, etc. Instead, it's more like when the 3 (and later 10) DLEC's - Covad, Rthymns, Northpoint - spent about $2.5B building 3 replicating networks nationwide, instead of splitting it up and not competing against each other. Cooperation would work wonders.

BTW, it wasn't clarified what services are no longer tariffed either:

Should the Commission fail to deny Verizon's petition, the Movants urge the Commission to expressly (via written order) limit its grant of forbearance to the particular types of broadband services and the Title II regulations specified by Verizon in its February 7,2006 ex parte letter. Letter from Edward Shakin, Vice President & Associate General Counsel, Verizon, to Marlene Dortch, Secretary, Federal Communications Commission, WC Docket No. 04-440 (fied Feb. 7, 2006) ("February 7 Ex Parte") The broadband services specified by Verizon include Frame Relay Service, ATM Cell Relay Service, Internet Protocol-Virtual Private Network (IP-VPN) Service, Transparent LAN Service, LAN Extension Service, IntelliLight Broadband Transport, Custom Connect, Verizon Optical Networking, Optical Rubbing Service, and IntellLight Optical Transport Service.

CLEC's lose in DSL Appeal

The CLECs lost (again). (Can anyone remember a win?) According to the Register, Appeals Court rubber stamps FCC's DSL (de)regulation:

The Court of Appeals for the Third Circuit issued a ruling last week that approved the FCC's new order eliminating the requirement that large phone companies provide transmission services to independent ISPs at set, nondiscriminatory rates. Instead, the independent ISPs will have to negotiate new individual contracts with Big Telco to use their pipes. But nothing guarantees that the telecoms will even agree to play ball with the little guys anymore. [register]

This was a foregone conclusion in my book - vis a vis the Chevron ruling -- but it's just one more nail in the CLEC coffin. Other nails include AT&T forbearance, VZ 04-440, Embarq, Qwest and Frontier forbearance, and many pending petitions.

FCC Busy Helping Big Business

I have to wonder how K-Mart sleeps at night -- giving away American economic advantage to Corporate America.

• Media Ownership means Consolidation. Check.
• Spectrum to the highest bidder. Check.
• Forbearance helps consumers. Check.
• Mergers of RBOC and largest IXC and CLEC is good for America and consumers. Check.
• Sold America to highest bidder for short term gains. Check.

What am I ranting about now, you ask? FCC Grants Embarq, Frontier /Citizens Forbearance. (WC Docket No. 06-147)

In this Order, we address petitions filed by Embarq and Frontier (collectively, petitioners), requesting that the Commission forbear, pursuant to section 10 of the Communications Act of 1934, as amended (Communications Act or Act), from applying Title II of the Act and the Computer Inquiry rules to certain broadband services. Verizon’s forbearance petition was “deemed granted” on March 19, 2006. Embarq and Frontier seek relief comparable to the relief granted Verizon through that deemed grant. Consistent with our recent AT&T Title II and Computer Inquiry Forbearance Order,4 we grant substantial forbearance relief to Embarq and Frontier with regard to their existing packet-switched broadband telecommunications services and their existing optical transmission services. We also relieve the petitioners of their tariffing obligations under the Computer Inquiry rules in connection with these services, but require their compliance with the Computer Inquiry obligations that apply to all nonincumbent local exchange carrier (LEC), facilities-based wireline carriers.

What is Title II?

Title II of the Act and the Commission’s implementing rules impose both economic and noneconomic regulation on common carriers. Generally speaking, the most extensive regulations are imposed on dominant carriers (i.e., those with individual market power). These carriers are subject to price cap or rate-of-return regulation, and must file tariffs for many of their interstate telecommunications services – on either seven or fifteen days’ notice – and usually with supporting data.

What services are tariff and regulation free?

In light of these findings, we conclude that dominant carrier tariffing and pricing regulation of Frame Relay Services, ATM Services, LAN Services, Ethernet-Based Services, Video Transmission Services, Optical Network Services (OC-n), and Wave-Based Services, as offered by the petitioners today, is not necessary to ensure that the petitioners’ rates and practices for those services are just, reasonable, and not unjustly or unreasonably discriminatory.

When you read K-Mart's comments to these waivers, you will think that he is out of touch with the market he regulates, much like a politician who has no idea what the price of a gallon of milk is. To say that there are numerous companies offering Frame Relay and ATM TODAY is so erroneous as to be laughable.

Tom Peters Coaches

Tom Peters is one of my favorite reads (along with Seth Godin). In his latest blog post, Tom reviews the book, Bo's Lasting Lessons by Bo Schembechler. The book has a chapter titled "Recruit for Character", which about sums up my Hiring 101 session at ISPCON. You hire on Attitude, because skills can be taught -- friendly cannot.

We live in a media filled world of buzz words, but at the end of the day, it's all about Execution. From Bo: "I've always believed eye-popping innovation is not as important as perfect execution." To compete in telecom today, you need innovation - in marketing. You need to combine services into an easy to use tool for productivity. That takes innovation and execution.

E-RATE

A big topic at ISPCON was E-RATE. Rudy at CyberLink gave a session that was sparsely attended, but at the CEO Exchange the topic was re-addressed. Rudy and Travis, a WISP owner and 2007 Best WISP Operator Award winner, chimed in on what is working for them in the E-RATE world.

E-rate is the USAC governed program that uses USF monies to help libraries and schools that participate pay for internet access. (E-rate also pays for access for rural healthcare centers.)

The window for filing Form 471s for E-Rate Funding Year 2008 has been set. The window will open at noon Eastern Time on Wednesday, November 7, 2007 and will close at 11:59 p.m. Eastern Time on Thursday, January 24, 2008.

What is the E-Rate? The Universal Service Fund was created by the Telecommunications Act of 1996, and began distributing funding in 1998. Telecommunications carriers pay into a fund which is then used to subsidize telecommunications and data communications for districts. The program has provided roughly $2.25 billion to schools and libraries annually since 1998. Subsidies (called “discounts”) are a percentage of a district’s expenditures on telecommunications and Internet access. The level of discount ranges from 20% to 90%, and is calculated based on the percentage of students eligible for the National School Lunch Program. For districts with multiple schools, the discounts for individual schools can be combined, or schools can apply individually.

Some common misconceptions about the E-Rate.

Forms to be completed. Get your SPIN Number now.

Comcast Voice is #4

LightReading.com has a stark headline: Comcast Looking to Overtake Embarq. Embarq has about 4.4M access lines. Comcast has caught up -- and may pass Embarq's numbers by the end of 2007. Embarq, the former Sprint United, is the fourth largest ILEC after Ma Bell, VZ, Qwest. When this happens, it will mark the cablecos taking huge market share from the traditional phone company. The voice pie is the backbone of the LEC financial structure. Tick-tock. Tick-tock.

Why You Missed Out!

Just got back from ISPCON West. (American Airlines sucks, btw!) WISPA probably had the most pop -- largest reception turn out, new vendor sign-ups, new member sign-ups, and kind of their own track of sessions.

The CEO Exchange is back! After I thought I single handedly killed it in Orlando, it is revived with help from Jon Price and Charles Wu. During a pizza break at 11 PM Wed. night, Jon Price looked out at the room, at all the pockets of conversations - passionate, animated, excited conversations going on. THAT is what it is all about. Why come to a show like ISPCON? To have the chance, the opportunity, to find someone else with similar business who you can learn, share, grow, support, help, gain from. THAT is the top reason. THAT is where the ROI is to leave your business for a couple of days per year.

There were 5 tracks - the biggest being the wireless track - plus hosting, business, VoIP, and technology. I did 3 sessions: Social Networks, Hiring 101, and 50 Ideas in 50 Minutes. (Two out of 3 were full). If you missed the sessions, you can buy my book. Or join a seminar.

The exhibit floor had some interesting booths (thanks to Neil): WISPA, InscapeData, CrashPlan (backup), yousendit, PowerCode, R1Soft, CALEA (including Procera and IP Fabrics, even though he called me old :), wireless gear and VoIP. The surprise for me was Neustar (Hi, Mariana!).

Some familiar faces were back like Sutus (an office in a box), Adzilla (ad network), Blue Tie (email), AT&T Wholesale, Coppercom, ImageStream (Linux router), CoreTel (CLEC), Freeside (open source billing), everyone.net (outsource your email), Hostopia, HostMySite, GroupSpark.

Apparently, one of the biggest pains for ISP Owners is email -- unfortunately, it is the main app that users need and it is the stickiest app. Well, you could try everyone.net -- they did get high marks. So did Roaring Penguin for filtering. Postini, the new Google division, received high praise from many. Frank Muto is a reseller. Drop him a line.

Protopage is a Private Label Web 2.0 company. Check them out. Resi ISP's should each have their own version of Craig'sList running for thier community to create a sticky environment for their users and readers. And if you can get the local newspaper to partner with you on that, you will have a big win.

I missed the keynote due to a clothes/luggage issue, but TheWHIR has a nice review of Dave Schaeffer's speech. (Dave is founder and CEO of Cogent.)

Oh, yeah, SitePal was there. They make avatars for websites. Pretty nifty web design stuff.

The next ISPCON is set for May 13-15 in Chicago. Plan now. Your business could use the fresh view and you could use the battery re-charge.

What kind of Marketing is That?!

I sign up for a Webex or Gotomeeting webinar with ABC company -- and after the webinar get peppered with email and calls from these conferenecing companies to buy conferencing.

"I sent an email your way last week with links about WebEx solutions for business development professionals. I hope they sparked ideas about how you can easily meet online – within or outside firewalls, deliver engaging presentations or demonstrations, and help you do more business.
From my research, your company is in a great position to leverage web collaboration solutions. I would like to understand your business objectives and determine how WebEx can help you meet them.
Can we schedule a time for a brief discussion of your business needs? Please reply with a date and time that works for you."

What marketing genius came up with this plan? How to destroy your brand in 10 minutes or less. Spam attendees. Nice. If I sign up through ABC, I don't expect to get marketing from the underlying company. Did I give permission for that? If you are that desperate to sell conferencing maybe the market isn't there!

Technology is not Strategy

In a countdown to speaking again at ISPCON next week in San Jose, I have been reading a great book: Fast Company: The Rules of Business. It has a chapter on Hiring that I will be quoting during that presentation. Here's a preview:

"How can you build a pipeline of talent - the only thing that's going to help you over time - if you put out a search only when you have a position to fill?" by Rusty Rueff, EVP of HR at Electronics Arts.

Chapter 9 is titled Technology is not a Strategy.

"Technology is not the answer. It can enable and support the corporate vision, but by itself, technology will not give you a competitive advantage.... Leaders today need to figure out how to do something with the technology that sets their company apart."

Jack and I will be doing 50 Ideas in 50 Minutes again - with a slightly different 50. Want to see it? Go to Slideshare. One of the thoughts that I have been working on with some other enterprises is summed up by the CEO of IBM:

"We have reached the point in our evolution where we can no longer be an industry driven by gizmos and guessing. We cannot grow this industry on that basis. Instead, we have to be driven by the needs of our clients." (Samuel Palmisano, chairman and CEO of IBM)

Aloha to Mobile TV and 700

Ma Bell is set to acquire all of its 700 MHz spectrum holdings of Aloha. As Phone+ puts it: "AT&T Inc. has agreed to buy 12MHz of wireless spectrum in the 700MHz band from Aloha Partners LP for $2.5 billion, which may signal Aloha’s exit from the wireless space."

This would explain why just VZW was crying about the Open Access rules -- to the extent that VZW was allegedly breaking ex-parte rules at the FCC. This purchased has to be approved by the FCC first. Ma Bell hasn't said what they will do with it --- but you can bet it will be a closed system to be used by a locked down device.

If Sprint could get out of its own way -- and actually execute on the WiMax plan, it stands a great chance of getting back in the race, before Alltel or T-Mobile take its place.

Guess Who is Selling Broadband?

Remember how you were worried about selling against the ILEC's? Well, things just took a turn for the worse. BusinessWeek announced:

Broadband sellers, beware. A new provider is on the scene—and it's a known price cutter. Wal-Mart Stores plans to announce Oct. 9 that it will resell high-speed Internet access from Hughes Communications, the world's largest provider of broadband services via satellite.

Granted, the market for satellite broadband is small, given the widespread availability of digital subscriber line access from phone companies and cable modem services from cable operators. Currently, satellite service tends to be more expensive and it's available mainly in hard-to-reach rural areas. Fewer than 500,000 Americans subscribe to satellite broadband access, according to consultancy Parks Associates. "It's still mainly for people who don't have a choice," says Michael Cai, an analyst at Parks. Only about 10% of Americans have no access to DSL or cable broadband.

Bumpy Days for the FCC

The FCC has had a few bumpy days.

1. Congress asked it to look into the ATT-NSA wiretapping - and it took a pass, much to the dismay of Congressman Markey.
2. It is skirmishing with Microsoft over white spaces and the devices that may take advantage of that promise land spectrum.
3. And just after the GAO reports that the FCC leaks info to the Big Boys to the detriment of the small guy, the FCC allows VZW to have special access to argue for the status quo in the 700 Auction. WTF?!
4. In the FCC investigating itself on whether studies / data were destroyed to back up FCC decisions on media ownership and localism, the FCC cleared itself. "The nagging feeling remains that we don't yet have the entire story," said Copps.
5. Copps and Adelstein, the only 2 Dems on the FCC, presented to Congress about the lack of a national policy on broadband -- and how the shortsighted nature of both Powell and Martin have led us to where we are today - 20th in the world in BB.
6. FCC announced that the 700 Auction will begin on Jan. 24 - 4 days before the Congressional deadline.

It's time for a re-vamp of the FCC -- or maybe time to get rid of it. If it is going to give everything to the Big Boys anyway - as well as not fine them for disobeying the FCC rules about voice call termination and origination - they are useless.

More Wi-Fi for Cellular

Alltel does a deal with Boingo Wireless to allow its customers to access wi-fi through the Western Hemisphere.

This was a surprise: "Alltel also provides wireless broadband access via Alltel Wireless Internet service, allowing customers to access the Internet from their laptop or smartphone at speeds of up to 2.4 Mbps on its nationwide data network." [pr]

"Alltel is offering a Wi-Fi and EVDO Wireless Internet bundle, delivering unlimited Wi-Fi access from any supported hotspot starting as low as $9.99 per month, in addition to the customers' Wireless Internet Plan." The EVDO-WIFi Bundle is about $69 per month unlimited.

Sprint - Nextel Failure

The NY Times stated the problems with the Sprint Nextel merger and integration clearly:

Analysts attribute Sprint’s problems and Mr. Forsee’s departure to the poorly executed union of Sprint and Nextel Communications, a deal struck in 2005.

The Sprint and Nextel networks operated on different wireless technologies, which made it harder to merge operations.

“When Sprint bought Nextel, it was like buying a completely alien technology with no synergy at all,” said Edward Snyder, a telecommunications industry analyst with Charter Equity Research. But, he noted, Sprint figured “everybody else was merging, why not them?”

The two companies also had different marketing strategies. Nextel sought more business clients, while Sprint focused primarily on consumers. After the merger “there was a tremendous amount of brand confusion,” said Walter Piecyk, an industry analyst with Pali Research.

Andy Abramson @ VoIP Watch points out that there are significant problems with converged services (like FMC and UMA) -- the lack of interoperability between vendors gear and systems. If Sprint can't get Nextel gear to integrate, it must be a real challenge to get TDM gear to mesh with cellular systems as well. (And IMS has not been rolled out and operational yet).

Right now Fixed Mobile Convergence is a multi-supplier solution, not to mention multi-vendor based. ... While Unified Communications may be talked about, that's more of the unification of the back end, not at the end of the call where the user is. [andy]

Want to see how bad Sprint is doing in numbers?

Bloomberg has an article that states the numbers:

• The stock has fallen 22 percent since the acquisition
• The company lost 337,000 customers in the third quarter
• smaller rivals such as T-Mobile have added more customers than Sprint this year
• AT&T, the largest wireless company, signed more than 900,000 users to contracts last quarter, more than Sprint's 16,000. Verizon Wireless, the second biggest, added 1.5 million. T-Mobile USA, a unit of Deutsche Telekom AG, added 857,000 subscribers.

Bloomberg doesn't think they will have an easy time finding a CEO. Sprint is too distresses with no clear direction. NY Times mentions that the COO position has not been filled yet.

Sprint CEO Ousted

The Board of Directors at Sprint-Nextel ousted CEO and Chairman Gary Forsee.

Sprint has been unable to take advantage of its $36 billion merger with Nextel (that ended up costing almost $50B in additional acquisitions to settle resulting litigation with Nextel Partners). Announced in Dec. 2004, only recently has the back office of the 2 separate cell companies been reconciled - sort of.

The ouster comes after the company's announcement that it won't hit its $41B revenue projection this year. (Or apparently hit any internal benchmarks for performance and integration).

How could it?

Sprint management made a decision to become an all-wireless company. Every proclamation is about that.

1. Sprint is the preferred network for MVNO's.
2. Pivot is the company's MVNO partnership with the major cableco's - TW, Comcast, Cox, and Bright House. (Just launching if the FCC privacy rules don't ground it).
3. The launch of the femtocell service, Airave, in Sept., 2007.
4. The $8B plan to build out a nationwide 4G WiMax network.
5. XOHM as the brand for the new WiMax service, rolling out in 4Q07.
6. The partnership with Clearwire in the WiMax effort.
7. Spinning off the local/landline business (formerly Sprint United) to EMBARQ in May 2006.
8. Sprint teams with Google for Gmail app and search.

Despite being the first IXC to go all-wireless, it is behind the two Bell cellcos by a Nextel car length.

Remember that Sprint is the once-upon-a-time #3 long distance company. The pin drop, all-fiber network.

What are they doing with THAT network now? Oh yeah. Nothing. Sprintlink is a decent Tier 1 internet backbone, but you wouldn't know it. The company doesn't push Long Distance, VoIP Termination, MPLS, VPN or Ethernet. Or IP for that matter. (Try getting a quote.)

After dropping the whole ION IP strategy, Sprint stopped looking at IP and started looking at wireless. Much easier to sell to mass market consumers than medium businesses. NOT.

UPDATE: " Of course when you get paid $21.6 million a year, well getting the boot comes with the gig."

Vonage Will Pay Sprint

While still fighting VZ's patent suit, Vonage has decided to just pay Sprint for its infringement of patents. The court ruled in favor of Sprint over Vonage and awarded $69.5 million plus 5% royalties. Vonage has agreed to pay $80M. According to Telecomweb, that "includes $35 million for past use of Sprint-Nextel technology, $40 million for a fully paid future license to the Sprint-Nextel VoP patent portfolio and $5 million in prepayment for services."

The shocking part is where will the money come from?

Telecomweb did a napkin analysis of the Vonage financial picture:

Even though on paper the company had $656.6 million in assets as of June 30 (notably down a tad more than $100 million in just 180 days), it had $564.3 million in total liabilities. And that was before the Sprint-Nextel settlement... As of its latest quarterly report to the SEC, the VoIP carrier had $144.8 million in cash and equivalents, and $132 million in marketable securities as of June 30 plus $66 million in restricted cash set aside to pay off Verizon if necessary. The numbers reflect that fact Vonage has now burned through most of the $531 million it raised in its IPO as well as through most of the other cash it got from venture capitalists. Indeed, as of June 30, its accumulated deficit topped $827 million."

Looks like those folks that moved from the SunRocket crash may have to move again by January 2008. The costs to provide unlimited VoIP service keep increasing, while the providers hold steady with the plan to acquire customers with the chant: "We are the cheapest!"

SELLECOM - the book

Well, it is getting close to being released this fall. (Watch this space for the launch on Lulu.com!)

SELLECOM: 101 Ideas for Marketing in the Telecom Jungle by Peter Radizeski

Pre-order the book before release and save $5. Click here.

Want a preview? At ISPCON, Peter will be speaking in 3 sessions:

1. 50 IDEAS in 50 Minutes
2. Hiring 101
3. Using Social Networking and Web 2.0 to Market Your Business

IPTV is Hype!

IPTV. This term has been buzzing around for a while. While some telcos do indeed offer TV delivered over IP, how many carriers actually offer an IPTV experience? Not HDTV. IPTV. Some kind of innovative TV experience. None that i know of. TelcoTV is being called IPTV by the likes of VZ (who MAY have over-stated their numbers). It is a strategy to get consumers to think that you have some cool new gadget. It is a business plan to move to a Blue Ocean.

"Hey, they have TV, but we have IPTV."

As a strategy, it has mostly worked, since some of the people on FiOSTV think WOW. I look at it and think Hmmm. DirecTV offers more HD channels than anyone. DISH offers a better selection of channels (just not the NFL Ticket). But I guess for consumers stuck with POCTV (plain old cable TV), who didn't move to digital, but bought an LCD TV or plasma, then got FiOSTV, it may be cool. (Except for those who had such an awful install experience that they churned back to cable).

The promise of IPTV was On-Demand, Interactive Entertainment. We ain't there yet.

BTW, for those in the ISP space who are looking at IPTV (or TelcoTV or TV over IP), for you to even move forward, ask yourself if you have 5000 subscribers who you can deliver it to. That is the minimum to get in - 5000. With a take rate of 15%, that means you need a base of 33,000 subscribers. It's a lot of work. PLUS, as my cable clients will attest, how do you recoup the $400 set-top box price at $5 per month lease?

The Blue Ocean move is brilliant. (Even if it is based on Hype.) But the reality is that these markets are flat - TV, cellular, and broadband (and wireline is declining) -- flat markets mean high acquisition costs since you have to take customers away from other carriers. You aren't growing a market or new segment of the market, you are simply replacing a service. Take-Aways have big acquisition costs - and long ROI periods.

Things I Like about Telecom

To counter the post, 10 Things I Dislike about Telecom, here are 10 things in no particular order that I like about telecom:

1. My Clients. I have some great people who I have gotten to work with for years. And this is a Big THANK YOU for being my client - and in many cases my friend.
2. The flux. Things are always changing in telecom.
3. The Challenge. This is the most difficult industry to sustain success and enthusiasm in. With the constant change - and usually not for the better - it is a challenge to find the silver lining and to out-maneuver the big guys.
4. Web 2.0 and Voice 3.0. I LOVE THIS STUFF!
5. Managed Services. Technology has out-paced the average person's ability to use it. Leveraging knowledge to help these people is where it is at.
6. The Passion. Many people in this industry have a great Passion (some of it misguided, but passion nonetheless).
7. Innovation . From Cbeyond to M5 to PBX-Change to RSAIR to Delaware.net - some bright folks are moving into Blue Oceans, not by taking on the world, but finding a regional niche, and kicking ass in it. Championing the small business and enabling that small business to focus on his business instead of his communications systems.
8. Writing. I love writing about this industry. Actually, I probably like the fact that some people actually read my stuff and comment about it.
9. Other people I have met in this Industry who have definitely helped me - Tom, Wendy, Joyce, Paul, Khali, Gary, Joe, Mary, Fred, Cynthia, Kris, David, Donny, Jon. Thanks!
10. The FCC and the RBOC's. They give me somewhere to point my anger and scream.

Webmail is a Big Piece

In case you think that most of your clients use Outlook, let me tell you from antecodal research that webmail are some of the most viewed pages. Hotmail and Yahoo mail are both webmail. Now Verizon had to revamp its webmail interface to AJAX (see telephony story). Why?

Verizon needed a next-generation Web e-mail client to keep its broadband customers using its portal applications and content. E-mail drives the majority of customer page-views on the portal and serves as a foundation upon which Verizon can up-sell and cross-sell other content and services.

What are you waiting for? I woul dhave webmail redirect at logoff to a portal that looks like CraigsList. And I would let my paying customers post for free; but others pay for an ad. Besides classifieds, I would add blogging, RSS, video+photo sharing. But Stickiness is hard work

Data Center Revamp Coming

During the next five years, most large data centers will spend as much on power and cooling as they will on hardware infrastructure, Gartner says. [informationweek]

We see signs of this everywhere as the big boys look for the lowest power pricing in the nation before building a data center. (We need some of these guys to start using solar and wind energy generation to meet their expanding power needs).

More than 70% of the Global 1,000 organizations will have to modify their data center facilities significantly during the next five years, Gartner said. The reason is most facilities in use today were built more than seven years ago, and built to a design specification of 100 to 150 watts per square foot. Current design needs, however, are about 300 to 400 watts per square foot.... By 2011, power demand could rise to more than 600 watts per square foot. [informationweek]

This is one of the reasons virtualization is becoming popular. Virtualization allows one server to do so much more. Need some help with Virtualization? Come to ISPCON or take this webinar: Virtualization Drives Verifiable, Flexible Business Continuity and Disaster Resiliency Solutions

Lotus Office Suite ... again

"IBM Lotus made a bold announcement: it was bringing back the name Lotus Symphony, only this time it announced that Symphony would consist of the OpenOffice-based presentation, spreadsheet and document editors currently bundled as part of Lotus Notes 8. But the big news wasn’t just the return of Symphony, it was IBM Lotus’s announcement that it would make Symphony available for free via download. IBM Lotus further announced it would establish a support community and join the OpenOffice development product." from CollaborationLoop.

The FCC Not Playing Fair?! OMG!

From ZDnet: "The Federal Communications Commission violated rules by tipping off some corporations and trade groups about when commissioners planned to vote on important issues, a Government Accountability Office report has found. Consumer and public interest groups did not get such useful information, The Los Angeles Times reports..... By leaking privileged information, the FCC was giving an advantage to the lobbying efforts of big business..... Lobbyists are not allowed to meet with FCC commissioners and staff within one week of a public meeting. Information about what rules are scheduled for a vote is confidential."

Are you shocked? I'm not. Hey, K-Mart, hear that sucking sound? It's your career deflating. Maybe you and Powell can do a talk show on public access. Oh, wait, you told telcoTV that they didn't need public access. Oops. Maybe a blog then."

Qwest vs. Farmers: No One Likes It When They Get It

Qwest lost its fight with Farmers and Merchants Mutual Telephone Company at the FCC yesterday. Farmers is an 800-line Rural LEC in Iowa that used the tariffing system to make some extra money - at Qwest's expense. The gall!

These guys - Ma Bell, Evil Ivan, Qwest - hate it when other carriers use the very system to take advantage of them. Qwest tried to get the filed FCC tariff called illegal. It is an interesting read about the process for inter-state tariff. It also is a map in how one could go about calling for, say, Ma Bell's Special Access Tariff to be denied “deemed lawful” status. Just a thought. I would urge you to read at least the first 5 of the 16 pages.

In response the FCC asks for comments, (Docket No.: 07-135) since nothing they like better than to go into an extensive comment period - say 3 years or more - and mull over all the very similar sounding comments that are filed for and against:

The Federal Communications Commission today initiated a rule-making proceeding to investigate cost and tariffing issues raised by allegations that some rural local exchange carriers (LECs) are experiencing significant increases in access demand, resulting in unreasonable access rates. The Commission notes that chat lines, conference calling and similar services can generate substantial growth in access traffic to the LECs from long-distance companies, which pay access fees to LECs at tariffed rates for every call delivered. The tariffed rates are set at levels targeted to recover the costs of providing access. Although it is reasonable for LECs to seek to increase demand for their services, rates should remain just and reasonable over time as costs and demand change. The Commission tentatively concludes that it must revise its rules so that tariffed rates remain just and reasonable even if a carrier experiences significant increases in access demand. The Commission asks for comment on several possible approaches to address alleged access stimulation strategies. For example, one proposal would require carriers to file revised tariffs if demand increases beyond a threshold level. The Notice requests information about rate-of-return LECs, price-cap LECs, and competitive LECs.

What to do with EarthLink?

In a blog on CNN, the specualtion on what to do with ELN is all over the place:

• become a VoIP company
• one suggested the failed Muni Wi-Fi was really a WiMax trial?!
• that ELN should merge with Vonage
• that ELN should market Packet8
• merge with Covad
• go back to being an ISP
• Helio is a success ?!
• the Rolla fan that thinks the new CEO and COO will turn it around

No mention of New Edge. It is plain that most people that commented do not even understand the services that ELN now offers (specifically the line powered voice service from Covad). (It's also scary how ignorant most commenters are especially on DSL Reports. Talk about the dumbing down of America!)

Could It Be the FCC will act on USF?

WOW! In an article in the National Journal, it looks like USF is on the table.

The FCC will decide "very soon" on a proposal to cap the multi-billion-dollar universal service fund by limiting subsidies to new participants, mostly wireless carriers, FCC Commissioner Deborah Taylor Tate said.... The proposal, made by a government advisory board that Tate runs, has drawn mixed reaction on Capitol Hill and is strongly opposed by the wireless association CTIA, whose members would bear the brunt of it. The board will make broader recommendations on overhauling the fund to the full FCC by Nov. 1.

Also on Monday, Rep. Lee Terry, R-Neb., urged passage of a bill he is cosponsoring, H.R. 2054, to overhaul the fund and expand the subsidies to cover high-speed Internet access. ..... To jumpstart debate, Terry's office is holding staff-level discussions with the offices of Senate Commerce Chairman Daniel Inouye, D-Hawaii, and Commerce ranking member Ted Stevens, R-Alaska, who are interested in drafting their own universal service bill.

Harold Furchtgott-Roth, formerly a GOP regulator at the FCC, noted that USF support to rural providers has barely increased in 10 years. "It's a program that's in need of a lot of mending, both at the FCC and on Capitol Hill," said Furchtgott-Roth, a senior fellow at the Hudson Institute.

This means that NO new entrants - like rural fixed wireless and WiMax providers - will be able to get funding from Universal Service. Might be time to comment to the FCC.

Did VZ Lie to Congress?

In a Slashdot story, there is a suggestion that VZ Tauke lied to Congress about VZ clipping copper at each FiOS residence at time of install.

Sources report that today, at a hearing of the House Subcommittee on Telecommunications and the Internet, Verizon executive VP Thomas Tauke denied ever doing that. (The transcript should be up in a day or so. The AP coverage does not mention this detail.)

Rep. Markey's staff may be interested in hearing from anyone who knows otherwise.

Digium buys Switchvox, MS Joins the fray

Tristan Degenhardt's PBX company, Switchvox, was acquired by Digium. Switchvox is a Digium reseller with "65,000 end points." (I'm assuming that means handsets and softphones, but who knows). This is yet another consolidation move in the telecom space. More to come I'm sure since there are too many PBX vendors right now.

Meanwhile, Microsoft launched a phone system for very small businesses - at a sub-$3000 price point - with partners D-Link, Quanta, and Aastra. Phone+ had this:

“Microsoft Response Point, a premises-based phone system aimed at the very smallest of SMBs, certainly has competitive pricing and the integration with Outlook is a value-add,” said the Yankee Group’s Steve Hilton. “Of particular interest is the ’Magic‘ button which brings voice recognition technology into the world of the SMB in a new way. The biggest challenge for Microsoft is in its current reliance on the D-Link and Quanta channels to get the product into SMBs. We look forward to Response Point's availability through the massive Microsoft channel and distributors like CDW, as well as the globalization of the Response Point solution.”

It's going to start getting bloody in this space - as MS steps into to compete with Cisco's Linksys One system, which has not exactly been a screamer, and with Cisco's Call Manager Express.

Wireless Bundling to save landlines

VZ jumped into the fray bundling landline and cellular for $60 per month. [source] Knowing VZ, that means add about $25 in fees and surcharges. But more importantly than the standard screwing you get from VZ is the lack of internet access in the bundle. At least, the DeathStar was smart enough to bundle cellular with DSL, but it looks like VZ forgot that piece. (I'm wondering how these subscribers will be counted in the 10Q, since VZW financials aren't really broken out in the SEC filings).

VoIP - Is There a Business Case?

SunRocket, Vonage, and now Skype.

Skype never emerged as the cash cow eBay had hoped for when it paid a jaw-dropping $2.6 billion to acquire the Internet phone startup in 2005. Now eBay's announcement Monday that it will write off $1.4 billion in charges related to Skype has analysts and investors questioning whether the Internet phone business - known as voice over Internet Protocol (VoIP) - has any commercial potential at all. [cnn]

It seems that while there is plenty of buzz about VoIP, the paying public doesn't want to spend enough to actually make it profitable.

The number of people paying to use Internet phone services in the U.S. has nearly quadrupled to 16.3 million since 2005, but revenue per subscriber has dropped from $42 a month to $29, according to research firm IDC.[cnn]

Says Cohen: "This market isn't going away, but providers will need to do more to provide a compelling experience to move consumers away from the traditional idea of a phone."[cnn]

No kidding. POTS Replacement for Less Money does NOT equal success.

ADSL Modems available for under $30

Siemens SpeedStream 6520 ADSL/2+ (Extended Reach) / USB / 4 Port Router + Wireless / Model TR0-69, Includes Firewall / Attack Detection / DHCP Server / DDNS. (Some details here as well as at Siemens site). 6520 Kit Includes: 1 SpeedStream 6520 Refurbished ADSL-2+ modem / 4 Port Wireless / Extended Reach Router; with 2 Alcatel ADSL In-Line Filters; 3-foot cat5 Cable; 7-foot phone cord; 12V Power Supply - in a New Oyster White Box, with MAC address on label.

SpeedStream 5200 ADSL/2+ (Extended Reach) USB / Ethernet Router. Model: 060-E242. Includes Firewall / Attack Detection / DHCP Server / DDNS.

5200 Kit Includes: 1 SpeedStream 5200 Refurbished ADSL/2+ modem / Extended Reach Router; with 2 Alcatel ADSL In-Line Filters; 3-foot Ethernet Cable; 7-foot phone cord; 12V Power Supply in a New Oyster White Box, with MAC address on label.

Contact the RAD-INFO office for contact info for the modems.

Comcast CAE tells Inside Scoop

Apparently, Comcast's Customer Service Call Centers cannot help any customers with dispatch issues. This post from an Insider explains how messed up Comcast service is. It's almost like they put a Bell-head in charge of it over there :)

Why Cell Phones?

Besides being mobile, why do people use cell phones so much at home and at the office? Some of it is clearly to save on LD charges. Some of it is that incoming may be going to the cell instead of the landline. But this says Opportunity to me. One number. Shared address books. Unified voicemail. Some Voice 3.0 apps try to get this right - like Grand Central and others - but the one that integrates that address book from the cell phone, Thunderbird, Outlook, the PDA, Plaxo, and the laptop will win.

3Com gets bought by China

NewsFactor announces that 3Com was purchased:

3Com, whose products include Ethernet switches for directing data over networks, has been losing market share to Cisco, but the $2.2 billion deal with Bain Capital and Huawei Technologies could put 3Com in a better competitive position, especially in China, and give Huawei the leverage to compete outside China with Cisco.

Quietly, the big boys of the modem days are dwindling. Hayes - gone. USR was bought by Private Equity, the same group that bought Z-Tel/Trinsic. Zoom is still hanging in there. 3Com was founded in 1979 by Robert Metcalfe after he (and others) discovered and named Ethernet at PARC. Now the Chinese own it. Like the French own what little is left of Bell Labs.

More Censorship from the DeathStar

DSL Reports: AT&T Censors Customers' Negative Opinions

It is in the fine print of your (ever changing) Terms of Service from bellsouth /att:

In addition, AT&T may immediately terminate or suspend all or a portion of your Service, any Member ID, electronic mail address, IP address, Universal Resource Locator or domain name used by you, without notice, for conduct that AT&T believes (a) violates the Acceptable Use Policy; (b) constitutes a violation of any law, regulation or tariff (including, without limitation, copyright and intellectual property laws) or a violation of these TOS, or any applicable policies or guidelines, or (c) tends to damage the name or reputation of AT&T, or its parents, affiliates and subsidiaries.

Ma Bell has been on a tear lately wiping its ass with the US Constitution.

Om Malik says that VZ has similar terms. Nice. ... If they shut me off, does that mean I can stop getting all those direct mail and call center pitches?

FreePress has a release about VZ censorship here.

Telco Concierge: One Idea Used

Back in January, I mentioned the idea of a Computer Concierge:

Offer to be the Computer Concierge, the Data Curator, the Go-To-Guy. If you could offer a maintenance contract to cover all IT and telecom services with one phone call, you could capture some high revenue clients.

Well, I knew that telco execs read my stuff, but Qwest actually implemented the idea. (article here). It's a sad day when the ILEC's become innovative - and CLEC's and Independent Service Providers are not.

This isn't 1998 or 2000 or 2003. It's 2007. The only way to thrive is to embrace change. If not, meet Irrelevant - he will be your friend.

UPDATE: Seth Godin writes about large corporations being beaten by smaller, flexible start-ups. Is that you? Flexible? Making changes?