Lots of VoIP Apps, But...

There are lots of VoIP apps from TalkPlus to the latest one Voxcall (another voice app for Facebook). The one thing that these guys don't get: IT'S ALL ARBITRAGE PLAYS. In other words, mostly it's we'll save you money. That's great, but it's lacking.

College students today do not use cell phones for calls, but for texting and web surfing. Adults use the cell phone for talking (or powering their cars because in Tampa it seems people can't drive their mini-van without a cell phone glued to their ear).

Gary Kim says that Japanese usage of voice is decreasing. And the Japanese market, while ahead of the curve, is the model market used to predict what will occur in the US market.

So while all these VoIP plays are nice, they are missing the mark. People on Facebook use chat, IM and posts to communicate - not click to call. eBay was supposed to use Skype for C2Call. Has that happened yet? Is there a demand not being met? Not really.

The VoIP providers need to make voice more relevant and easy. How many have integrated TeleVantage? Or CRM? Or TAPI (Outlook hooks)? The PC and the desktop phone should be married by now.

International calls on your cell phone is a small market, because you need a phone that can load an app and has an unblocked data plan, since the cellcos don't like people bypassing the network (despite VZW's announcement to be open).

iPass adds to Mobility

Phone+'s website has case studies and one of them is about iPass (see here). If you are a WISP selling to business users, letting them take advantage of iPass's "network including dial-up in over 160 countries and, together with the T-Mobile® HotSpot network, over 90,000 Wi-Fi hotspot and Ethernet hotel broadband locations" would give you a Value and leg up over most broadband providers. (Here's the link to the iPass program for ISP's).

a la carte pricing would cause higher rates

This article in the NY Times is a good read about cable pricing. Why would rates increase?

1. Because ESPN charges $3 per subscriber that Bright House has. But maybe only 25% would subscribe a la carte, so the rate would be $12. ESPN would want to make the same amount of money. Something like BET or Hallmark might have to charge 12 times its rate.
2. Advertisers would have a smaller audience so ad rates would decrease. Subscriber rates might increase to balance that.
3. Channels would need to start marketing their channels to get more subs. (Think about the marketing budget of Showtime or HBO).

700 Auction linkage

The law offices of Rini Coran, PC gave a webinar on the upcoming 700 MHz spectrum auction (in cooperation with WISPA). Links that go with the 37 slide Power Point are here:

Michael Leydon @ Vecima Networks found those technical documents (re power and signal strength limits) at GPO: here and PDF and PDF2.

For those who need to get an FRN as part of the 700 MHz Auction (or for other FCC-related reasons) here's the link.

This link contains most all the information that Steve talked about in the FCC Rules on the tele-conference.

IBM 2010 CIO Outlook

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Woes of Wireless

EarthLink is learning that Phillie’s network is going to be too challenging to build. The deal that EarthLink had for Houston’s muni project dissolved. And it isn’t just EarthLink. AT&T backed out of Chicago, St. Louis, and now NAPA. Sprint and Clearwire couldn’t come to terms over the nationwide WiMax partnership, so rumors abound about this being the end of WiMax. (Note to Clearwire, What were YOU thinking?) There is noise that Sprint will be purchased by Comcast or Google, but that’s just bankers floating a balloon (or a big investor looking to play the stock delta game). The FCC adopted some Katrina rules for cellular companies pertaining to power backup and reporting (see story here) that will be costly.

Some people are enjoying the fruits of wireless: The FCC awarded 10MHz of 700 spectrum to Public Safety Spectrum Trust (PSST). [story]

Want to enjoy the fruit of licensed spectrum? 3650 MHz is ready to be registered and the 700 MHz Auction deadline is Dec. 3, 2007. Contact the law offices of Rini Coran, PC for help.

BSA Targeting Small Business

Yahoo news has a story on the Business Software Alliance. The BSA is the "main global copyright-enforcement watchdog for such companies as Microsoft Corp., Adobe Systems Inc. and Symantec Corp.... Of the $13 million that the BSA reaped in software violation settlements with North American companies last year, almost 90 percent came from small businesses, the AP found." The most shocking part is the Reward: "And this year it began dangling rewards of up to $1 million to disgruntled employees who anonymously report their bosses for using counterfeit or unlicensed software."

There is a backlash though: ""It's not like they have really good software. It's just that it's widespread and it's commonly used," Gaertner said. "It's going to be a while, but eventually, we plan to get completely disengaged from those software vendors that participate in the BSA.""

New business plan: help companies move away from software that the BSA targets or get involved as a technology asset auditor.

tele-medicine to be funded by USF

The FCC announced an e-Health Plan:

To significantly increase access to acute, primary and preventive health care in rural America, the Federal Communications Commission today dedicated over $417 million for the construction of 69 statewide or regional broadband telehealth networks in 42 states and three U.S. territories under the Rural Health Care Pilot Program (RHCPP). The Commission’s RHCPP will support the connection of more than 6,000 public and non-profit health care providers nationwide to broadband telehealth networks. The health care facilities participating in the Pilot Program include: hospitals, clinics, universities and research centers, behavioral health sites, correctional facility clinics, and community health centers. Tele-health and tele-medicine services provide patients in rural areas with access to critically needed medical specialists in a variety of practices, including cardiology, pediatrics, and radiology, in some instances without leaving their homes or communities. Intensive care doctors and nurses can monitor critically-ill patients around the clock and video conferencing allows specialists and mental health professionals to care for patients in different rural locations, often hundreds of miles away. The networks will deliver services efficiently, reduce costs and travel time for consumers, decrease medical errors, and enable health care providers to share critical information. Rapid and coordinated responses to public health emergencies, such as bioterrorism attacks, pandemics or disease-related outbreaks, will be expedited through coordination with the U.S. Department of Health and Human Services (HHS), the U.S. Centers for Disease Control and Prevention, and other public health officials during public health emergencies. Participants are eligible for universal service funding to support up to 85 percent of the costs associated with the design, engineering and construction of their broadband health care networks. The Pilot Program’s requirements complement HHS’ nationwide information technology initiatives that support the creation of a nationwide interoperable health information technology infrastructure to improve the quality of health care. These networks may connect to the public Internet or to one of the nation’s dedicated Internet backbones: Internet2 or National LambdaRail. In order to ensure quality and efficiency, all projects must be competitively bid, and are subject to quarterly reviews, and stringent oversight and audits.

other notes at FCC.gov and gov't news site.

FiOS Rates Going up Already!

I find it funny that K-Mart points out the rise in cable rates constantly but says nothing about telco rates. First off, in the last few years, we have had an explosion in the number of channels available, especially for the sports fanatics - NFL Network, Big10, 22 Fox Sports, MSG, Tennis, Versus, ESPNU, CSTV, etc. Plus there are like 80 premium movie channels availabel, so that you can watch that lousy Jen Aniston flick every day for a year. Every channel costs money. Even the local channels want to get paid to broadcast on the cable or satellite system. Here we are less than a year after VZ rolls out FiOS commercially and they are raising their rates already. Bad enough that VZ keeps, yes, constantly, raises the rate on my 1FB line. (I dropped the home phone line becasue it was $50 with taxes, fees, surcharges, voicemail, caller ID, and KY.) VZ is raising FiOS TV rates $3-$5 per month per subscriber.

The price changes will affect all customers throughout the 16 states where FiOS is available. The hike affects only customers who have signed up for standalone TV service -- there is a complicated set of bundle options for consumers seeking multiple services.

Why did they pick on Vonage?

Ike Elliott has a great post on why companies get into patent litigation. These 5 questions explain why VZ went after Vonage, but not Packet8 or Broadsoft or Cisco (for that matter, why VZ doesn't go after ATT or Sprint):

How does a patent holder decide who to target? They usually consider the following:

1. Are we pretty sure the target is infringing our patent?
2. Are we infringing any of the target's patents?
3. Can we win a lawsuit if it goes to court?
4. Is it important to maintain positive relations with the target?
5. Is the target a competitor that we would like to impair?

You might also like to read Ike's post: Are Verizon's VoIP Patents Valid?

Follow Up on Ma Bell's Lost Focus

Yesterday, I wrote about Ma Bell looking to buy Echostar. As PC World writes:

AT&T plans to buy online advertising company Ingenio for an undisclosed sum, in a move that puts the telephone company in competition with Google and other online advertisement leaders. Ingenio's technology measures the effectiveness of advertisements by tracking phone calls made to businesses based on phone numbers used in ads. The ads can be displayed online, on mobile phone Web sites and in print. The technology provisions the phone numbers and tracks the calls. Advertisers pay based on the volume of phone calls generated by the ads. AT&T will integrate the technology into its yellowpages.com Web site.

AOL and MSN use Ingenio technology. Unlike Qwest and VZ, Ma Bell has not spun off its Yellow Pages and Advertising business. I just don't know how many more balls Stephenson thinks he can juggle. "We are a wireless company. Oh, wait, a telco TV company with phones. Oh, and an advertising firm. Um, do we own any backbone? Yeah? Software too? Oh, good. We are an Internet company." Now when you put it like that you can see how they will falter on at least some of these projects. How many will they do well?

Tele-Work No More

It's funny that a company that makes its revenues based on tele-workers, remote access, and VPN, would be putting an end to its own employees that tele-work (or work from home). According to Network World, thousands of tele-worker at AT&T (SBC, AT&T, Cingular, and BST) were notified that they would need to start coming into the office. That should certainly add to the office environment --- even more disgruntled employees. Great!

Andy points out all the ways that life is going to change for tele-workers: gas prices, commuting, child care, wardrobe, errands.... the best is if you moved a little too far away for a daily commuter.

Thanksgiving time

Thanksgiving marks the end of the year holiday season for those of us in the USA. It is a time to gather with friends and family to remember all that we are thankful for.

Take a few minutes to remember why you like this industry. (It's hard to remember, I know, but there must be one small reason).

Enjoy the holiday. Happy Thanksgiving from RAD-INFO, Inc.

Will Muni Fail?

With stories like these from Phillie, you have to wonder. Now EarthLink pulling back on its Muni Wireless plans. Is that the end? Probably for ELN, it is. (For Sale signs are popping up in ATL, San Jose, San Francisco, Pasadena, Orlando, Vancouver (WA)) Techliberation writes:

EarthLink appears to be getting out of the muni wi-fi business for good. The company is at least abandoning the major Philadelphia experiment it was in charge of.

Muni itself isn't dead. It's doing some re-examination. It needs some re-invention. Free doesn't work well. Neither does: Build-it-and-they-will-come. As many dot com companies learned (and some Web 2.0 companies will soon learn), there has to be demand in order to collect revenues. For free, people will sign up and maybe use it occassionally. But how to convert those not-really interested users into paying customers is the KEY. Advertising revenue is nice, but we have seen numerous companies with the advertising bar disappear over time. I agree with Andy Abramson:

The writing has been on the wall. That said, the problem is that the genie is out of the bottle in cities where they have deployed and unfortunately Muni WiFi is looking more and more like the second coming of Metricom's Ricochet. Great idea. Flawed execution and way too much money spent by high flying, fast spending executives, instead of real common sense, where's the market reality.

So cities and towns will have to look for an anchor tenant - either a government agency with field poeple, a utility, or a public safety / EMS / police use for the network. Then the network can provide free access to some areas. Ubiquious indoor coverage is unrealistic. (Your cellular networks can barely be used indoor and they have licensed frequency and higher power). So the realities have to be seen and accepted, then Muni Wi-Fi can move forward.

the DISH on Ma Bell TV

Echostar (owner of the DBS called DISH and buyer of Slingmedia) is said to be in on-again, off-again talks with Ma Bell who might want to buy DISH Network. Echostar took a hit in the 3rd quarter, that it said pertained to the credit crunch. (When money gets tight, people tighten the belt.) But could be due to Telco TV.

Small MSO's and rural MSO's (not always the same thing) get hit hardest by DBS penetration. It's expensive to upgrade from an analog head-end to a 100+ channel digital head-end -- and the network to provide it to the households. (Millions). And the $400 set-top box only adds to the CAPEX.

Does it make sense for Ma Bell to buy DISH? Not really. Their FTTN approach to triple and quad play bundles seems like the logical approach to fight cable. However, Ma Bell will be spending billions to hit only a portion of its client base. This is a solution to the rest of the country including VZ territiory.

My thoughts are that Ma Bell is running scared. The Aloha and Dobson buys. Ingenio (pay per click). USinternetworking and Interwise. It looks like they are buying growth already. And this looks like the old AT&T! Back in the 1990s, ATT bought NCR, spun off Lucent, bought McCaw and Alaska Communications Systems. Then in 1997, ATT bought TCI and Media One to become the largest cable TV provider in the US. And then it unravelled. Heavy with debt and falling LD rates, ATT started spinning off - Wireless in an IPO and cable as ATT Broadband and Liberty Media. By then it was upside down. Tell me this doesn't look similar? Plus, the company keeps saying it is a Wireless company. Fine. Then Focus on that!

Think of companies that do things well. Bose. Starbucks. Southwest. Boeing. What do they all have in common? They have a Vision that comprises the One Thing that they will Excel at, to exclude all else. Bose makes beautiful music, but audio only, no video. Starbucks used to be about The Coffee Experience. Southwest's BHAG is Fly People Cheap. Boeing focuses on building the grandest planes in the air.

That's how companies succeed. Have a Vision, BHAG, Grand Plan. And keep walking towards it - a step at a time. Not dancing or doing the jig or taking detours, but walking towards the goal (walking the Walk so to speak). That's Focus. That's how Execution works. And that's my lesson for today. Buy the book for the rest of the lessons.

Will there be a 3rd Pipe?

In the top 30 MSA's (metro service areas), I do not think there is enough demand for a 3rd broadband pipe in the consumer market. M2Z, Frontline, and Google have designs on a nationwide wireless network (based the 700 MHz spectrum to be auctioned off in Jan., 2008).

EarthLink has failed at the Muni Wireless play. Yes, it was mainly free with a premium offering that about 3000 people subscribed to, but some of the issues that marked its demise will be felt by other providers as well.

1. Wireless Network Design / Build demands RF Engineering even for licensed spectrum.
2. 700 MHz doesn't offer much more than the 900 MHz or the 2.4 GHz spectrum, except maybe less interference.
3. It always costs more than planned!
4. What's the marketing pitch? What Pain are you trying to fix? What pain is left that Clearwire, Sprint / Xohm, EVDO, 3G, T-Mobile, TowerStream, et al don't already try to address?
5. How will you differ from a WISP like Clearwire?
6. Free only gets you so far. At some point, you need revenue to get ROI (and to pay to operate and maintain said network). How will you acquire paying customers?
7. What handsets or devices are you going to capitalize?
8. How will you handle customer care / tech support at $30 per call? When Joe calls with his Zire 72 that can't get a signal, how do you keep him from becoming disgruntled?

MSOs and Telcos offer triple and quad play. So you have wireless broadband and VoIP. I hear all the buzz about IPTV, but Aloha couldn't get it off the ground, how will you? (Content costs big money. And if you thought ILEC's were a PITA, try Hollywood!)

The way I see it, here are the niche plays:

1. The 3rd Pipe is still needed in rural and suburban areas.
2. Businesses are always looking for a more flexible communications partner in addition to a redundant link.
3. MDU (apts., condos, resorts, subdivisions, greenfield) and MTU (office parks & bdgs) - will give you a captured audience in a specific geographic area that you can interact with and offer flexible services to meet demand. (The PCO model, kinda).
4. A really cheap offering, maybe done with a rechargeable pre-paid model.

With Embarq, Sprint, T-Mobile, Cbeyond and others offering FMC, UMA and femtocell, the 3rd pipe gets less likely. Once this gets better footing (and marketed so the average ID10T can figure it out), this will satisfy most consumers, SOHO, and very small businesses. A riskless combo of convenience from a trusted brand.

The consumer broadband, voice, and TV markets are a Bloody Red Ocean, that will drain revenues and cash reserves for the next couple of years for telcos, MSO's and DBS. (Ask DISH how it is doing against FiOS).

Unlicensed spectrum in the major MSA's is almost "full". The noise and interference increases daily with more and more WAP's and unsecured WLAN's popping up. The addition of FON, Meraki, Muni wi-fi plays, HotZones, and other wi-fi technology doesn't make the case any better.

That doesn't mean the 3rd Pipe won't work in regional pockets. I think it can work regionally. It will be very hard to do on a nationwide basis. It gets harder if Clearwire gets its act together -- or if Clearwire partners with Google or Sprint or T-Mobile.

The business case by the numbers:

One city can cost $10M to $27M to build out. Let's take $12M. Not backhaul or backbone or tower leases or operation. Just the MAN network installed.

Let's say we offer BB Lite at 1MB for $19 per month and unlimited VoIP for $25 per month. That's $44, which is average MRC, right now. The offer needs to be less than current solutions to get traction (or market share). At $44 and a 3 year ROI, 7600 users are needed per MSA. ELN only captured about 3000 combined. And why 3 years? 3 years is a long time.

Now let's say that our VOIP costs are $8 per user. Our internet costs about $6, like dial-up. That's $14 in hard costs. Rent for AP's. Power. Internet Backbone. OSS. Billing. Admin. Tech Support. NOC overhead, like collocation, hardware leases, labor. Lets call all that $15 for now. We are at $29 from $44, leaving $15 of gross profit. But not at customer # 1, nor at customer # 100.

What about customer acquisition (CAC) costs? Advertising, Salespeople, Commissions, Referral fees. VoIP provider SunRocket saw acquisition costs of $200+. That's $15 per month for a 14 month "break-even". Now, at $15 gross profit, it will take 36 months to pay back the $200 CAC plus get your ROI on the $12M. that means you will need ((12M/(36-14))/15 = 37,000 users. There are very few Independent NSP's with 37,000 users in one MSA. (And that is if all of them are acquired in the first 6 months or the ROI falls off.)

Is there a CPE cost? Or will a cheap wi-fi adapter work? Installation required? Tech Support required to walk the user through install or sign-up or use? If yes, add costs. (More customers needed).

Take Rates.

In its first year offering triple-play, in 2006, Comcast had a 6% take rate. [dslreports]. That is an established giant with a big advertising machine. 6%. VZ's Quad-Play has a 5% take rate. Have you seen the marketing full-court blitz VZ applies? 5%. Those numbers would be great for a third pipe, but that take rate took an established brand millions in advertising to achieve in its first year. Oh, yeah, and how many were already customers that just added addition service? How many consumers are locked into a multi-year telco bundle?

As more users utilize the network, it will need to scale. Access Points can only cater to a finite number of users and can only offer finite bandwidth. Even the backhaul has a finite limit. Internet backbone will also need to scale with usage. Latency and jitter (QOS) will need to be maintained if users will be using it for video and VoIP. This escalates costs. Quickly.

And we didn't factor in if the 3rd pipe had to BUY spectrum. Add another $5B for that. Plus the network build costs increase, because 700 MHz equipment isn't mass market yet. (CPE will be required as well, since current wireless, EVDO, handsets are not equipped to take advantage of 700 MHz). Increased acquisition costs.

The other factor the business plan will have to take into account is that broadband penetration has almost flattened out. In other words, every household with a PC that wants broadband has it. There are about 30% of the households without a PC. And still millions that think dial-up is fine. (Or that broadband is more than dial-up or unavailable in thier area). In a flat market, take aways are required. Take aways are expensive. (Or you have to develop a Purple Cow, like a $100 wireless internet device.)

It isn't just me either. See this breakdown. Even Om doesn't think big pocketed Google will try to build a 3rd pipe. Or buy Sprint. I'll finish on this quote from GigaOm:

AT&T Mobility CEO & President Ralph de la Vega is not too worried about Google and its wireless ambitions. “Running a wireless network is a capital-intensive business,” he said in a chat earlier this week. “It’s not a business for the faint of heart.”

EarthLink exits Muni

Newsrooms are buzzing (here and here) about EarthLink restructuring their Muni Wirelss business.

“After thorough review and analysis of our municipal wireless business we have decided that making significant further investments in this business could be inconsistent with our objective of maximizing shareholder value,” said Rolla P. Huff, EarthLink president and CEO. [prnews]

So no more money for any muni projects. “The net book value of the assets attributable to EarthLink’s municipal wireless business is approximately $40 million.” What will ELN do? Will ELN ride out its cashflow position, as looks to a buyer? Maybe ask Platinum Equity if they can join the PE team, which currently includes USR, Trinsic/Z-Tel, Matrix, and Covad.

If this story looks similar to the one on WISPA's site, it is a result of the same guy writing for both sites.

What's Up with Wireless?

Clearwire is running around talking about Mobile WiMax and triple-play over their network. Not competing with 3G but complimenting it. Clearwire is flush with $1B in cash, $1B in a credit line, and spectrum in 6 countries. However, $2B isn't enough to build out and market in 6 countries --- maybe not even enough for the US only. And with just 299,000 subscribers, certainly not making the US op cash flow positive. Telecommunications magazine has the full story.

FrontLine Wireless is happy about some FCC rule changes for the 700 MHz auction. (see CNN Money)

Companies that want to participate in the 700 MHz auction have to notify the FCC by Dec. 3 and put up a deposit by Dec. 28. The auction will begin on Jan. 16.

Vonage Loses Appeal vs. VZ

Vonage lost a request to review the VZ patents. So VZ will need to pay VZ $117.5M plus $2.5M to charity (huh?). According to a Slashdot post, Vonage cut staff by 10% and may miss a loan payment in December 2008 (according to Bloomberg). Paying Sprint, ATT, and VZ for patent lawsuits plus court costs and attorneys fees has cut into the cash from the IPO earlier this year.

Speaking of the IPO, Vonage still faces a lawsuit from shareholders -- who could be considers the charity Vonage has to pay. No?

Ike Elliott summarizes the 10+ patent questions people have Here.

Ma Bell is Monitoring

The BizJournals has a story about Ma Bell monitoring -- well, who else would be pushing monitoring but the king. Ma Bell is all about monitoring - your email, your phone calls, your web activity, even your downloads. In this case, Ma Bell wasn't first -- many Independent Fixed Wireless Providers have been offering IP surveillance for over a year.

ATT has developed a new monitoring service for small businesses that sends emergency alerts to business owners on their wireless devices or Web-enabled personal computers. The ATT Remote Monitor service combines Internet Protocol-enabled video cameras and environmental sensors to keep a guarded eye on small business offices or warehouses. Business owners can configure their devices to send alerts based on changes in temperature, motion or water levels caused by flooding or leaks. "The need to stay on top of everything that happens in your business is important to small business owners," says John Regan, vice president of business marketing for ATT.

Broadband Growth Slowing

Since only about 77% of homes have a computer and since 53% of the household units in the US have broadband, we will be seeing broadband growth slowing.

As I have pointed out before (and so has Gary Kim and now GigaOm), broadband has become a Red Ocean where cable and telco will fight it out for subscribers. Om points out that cable will need to start offering cheaper price points, since telco already has $10 and $20 offerings.

The slowing economy, increasing gas prices, and credit crunch are causing consumers to drop non-essential services -- go back to dial-up, drop satellite TV (as DISH Network noted in its latest filing), and the like.

Since the metrics on Wall Street are broadband subs and cellular adds, I reiterate what Om writes:

The reduced growth forecasts also explain why many carriers are looking at alternatives such as search, domain redirection and even web portals as a way to goose up their revenues. In other words, 2008 is going to be one brutal year for the broadband business.

What hasn't been explored is the 23% of households without a computer. They are not a prospective consumer of internet access. Although it is astonishing to me that anyone isn't on the Internet, I am coming to realize people do live different lives ;). But to grow business, how do you get the rest of the 23% on broadband -- even if it isn't on a computer?

Also, many telcos are using CAPEX to upgrade existing network (think VZ with FiOS supplanting DSL plant; ATT U-Verse same thing; and Rural LECs upgrading DSL to ADSL2+). This isn't bringing more subs (maybe more billing units or ARPU). If your metric is revenue and profit, then increasing ARPU by improving your core service is key. The only other thing to do is add revenue generating value adds like backup/archiving/storage, hosting, web design, asset management, managed services like firewall or IDS, etc.

IPv6

Much of the rest of the world is moving to IPv6 faster than the US. Government, especially DOD (Defense), is making the transition now. Unfortunately, finding bandwidth that is utilizing IPv6 is difficult. So far:

1. Verio/NTT.
2. Global Crossing (GX).
3. XO.
4. WV Fiber.

Qwest in 2008. Savvis in 2008. InterNAP isn't saying.

If you have info about IPv6 carriers, please let us know. Thanks.

e-books are good if you read them

There are 2 decent e-books available:

1. Mirapoint and xchange magazine have an e-book titled Transitioning from Consumer ISP to Business ISP. (Xchange mag e-books).
2. Verio has an e-book titled A Telco Survival Guide for the Web 2.0 World. (BTW, Verio is one of the few Internet backbones to be IPv6).

When I posted to my listserves, I did receive a pretty big response for the 2 e-books. That's good -- if people actually read them AND then implement just 1 Idea from them.

I have seen the number of ISP's shrink significantly in the last 15 months. Many have gotten out of the access business altogether to move on to software dev or a specific vertical (like e-health). Others have moved to Hosting or Managed IT.

We are fast approaching the end of the year. Take some time to reflect on where you are most profitable and where you are least profitable. Then figure out how increase one and decrease the other. (It's okay to fire clients that unprofitable).

If you need help getting clarity, call the office to make an appointment with me. Dial 813-963-5884.

Response Point

This was the ad today from Microsoft about their new phone system:

"Buy your Microsoft Response Point phone system today! U.S. small businesses are one step closer to phone technology that is easy to set up and simple to use. Twenty-phone systems from Quanta and D-Link cost less than $5,500. Or pay less than $12 per seat per month† with the Smart Pay option from Microsoft Financing, and get a fully installed small business phone system without a big cash investment."

CommPartners gets some green

CommPartners, a VoIP platform provider with a Vegas HQ, rolled the dice and won $11 M in financing. CP has been through a couple of corkscrews - more accurately, their customers and service provider partners have been through some corkscrews. I had heard that CP had new management but the website and LinkedIn both show the same management team.

CommPartners has announced that they have just certified the SUTUS Office in a Box.

"We heard about Sutus from several of our resellers that focus on the SMB market and as we began working with them to certify the Sutus Business Central, we were immediately impressed with their solution" said Mark Peterson, CommPartners Connect EVP, Sales and Marketing. "Sutus goes well beyond being just an IP PBX; it is a complete office solution. We are very pleased to certify the Business Central and work with them to deliver real value to small and medium sized businesses."

If you are looking for a SUTUS Business Central 200 system, please contact our office at 813-496-2122. Thanks!

XO Burning Cash

SeekingAlpha.com has XO's 3Q07 numbers: "XO Holdings reported the 2007 Q3 with the highest revenue of $359.4 million in two years, $29 million of adjusted EBIDTA, and a net loss of $4.5 million – helped by some special items."

Special items are one time charges, like payment from the L3 litigation. SunRocket was a customer of XO. NextLink (XO Wireless) is still a drag on revenue. Here's the WOW:

Then, in 2007 Q3, the company’s cash burn rate was about $23 million worsened by a doubling CapEx and helped by a special item. "As of September 30, 2007, our balance of cash and cash equivalents was $90.9 million, a decrease of $77.7 million from December 31, 2006." [10-Q] Therefore, the struggling company may still keep running for another 2-3 quarters with the cash in hand, but definitely needs more funding for future growth soon. [alpha]

Another item is that XO is looking for more financing (since the cash is almost gone and to turn up waves costs some bucks. The 10G in 10 Days promo is from lit to lit. XO is not lighting new buildings -- too expensive, not enough cash. But as XO noted in its FCC filing versus VZ's forbearance in 6 Eastern cities (WC Docket No. 06-172), only about 4% of buildings are lit by CLEC's, so XO has a limited number of customers for that promo.

Based on the 10-Q, “for the twelve-month period ended September 30, 2007, the Company was required to achieve a minimum consolidated EBITDA of not less than $470.0 million.” This number may reach $500 million by the end of 2008 to comply with the covenant, which sounds impractical based on the current progress and capital investment level. However, with a closer look, the company’s Data Services + Xoptions FlexIP revenue increased to $142.8 Million (122.375+20.418) from $112.1 million (102.161+9.962) a year ago. That indicates that with about $30 million additional CapEx, the company realized about $30 million increase of revenue in Data and IP revenue in the same quarter a year ago. That was an impressive execution and ROI number of dollar for dollar. [alpha]

The 10-Q points out litigation against XO Holdings board over the wireline sale. The 10-Q does not address the ongoing FCC petitions for forbearance that have been granted so far to VZ, Embarq, Frontier / Citizens, Qwest, and to some extent AT&T. TDM DS1 and DS3 are untouched - for now. But getting bigger pipes to Type II customers is getting more expensive. And building out fiber to a new building is $7000 to $28,000 depending on distance, location, permits, conduit, and concrete.

Agents are getting 15 to 25 points on XO services, but I don't know how XO is able to afford that. Or, with its burn rate, how much longer it can pay it. SeekingAlpha.com thinks that Icahn will be able to pull off more financing. We'll see. XO missed another Covenant according to PR Newswire.

Here are the simple numbers from the SEC Filing are as follows:

1. Revenue increased $359M for the quarter
2. Cost of service is $141M - about 39%
3. Selling, operating, and general (SOG) is $190M (53%)
4. At 20 points and only 40% of revenue from agents, $29M in commissions.
5. Loss from operations is $17M.
6. Only $90M in cash AND equivalents.

Are You Thinking about your Business?

Mirapoint and xchange magazine have an e-book titled Transitioning from Consumer ISP to Business ISP.

Verio has an e-book titled A Telco Survival Guide for the Web 2.0 World. Page 3 has a case study about a WISP, who followed one of the 50 Ideas - he called his customers resulting in extra revenue. (BTW, Verio is one of the few Internet backbones to be IPv6).

Want a copy? Drop me an email.

Echostar Churning

Echostar is the first to report consumer defects due to the credit crunch. Echostar also noted that churn was high due to high competition (i.e., cheap, short-term triple play bundles). Forbes.com has the full report.

Although the Englewood, Colo.-based company reported its net income jumped 43% as subscriber sales increased and costs to acquire new customers decreased, its churn rate, i.e. the numbers of subscribers who stopped service, shot up to 1.94% per month for the quarter compared to 1.76% in the prior year.

Sprint, Clearwire Break Up; WiMax dies

Over the weekend, Sprint and Clearwire called off their deal (see a story here). [I reported on it at the WISPA.org site, not here. I write about wireless stuff there usually.] Now the media is aghast over the future of WiMax. [see here].

I wish the media would stop saying WiMax. Anything wireless is associated with WiMax in the news, because reporters have to dumb it down for their editors and the reader. WiMax is not 700 MHz nor 2.x GHz. WiMax is not mobile wireless.

According to Intel, "WiMAX is an open, worldwide standard that covers both fixed and mobile deployments."

The WiMax Forum states, "WiMAX is a standards-based technology enabling the delivery of last mile wireless broadband access as an alternative to wired broadband like cable and DSL. WiMAX provides fixed , nomadic, portable and, soon, mobile wireless broadband connectivity without the need for direct line-of-sight with a base station. In a typical cell radius deployment of three to ten kilometers, WiMAX Forum Certified™ systems can be expected to deliver capacity of up to 40 Mbps per channel, for fixed and portable access applications."

Wikipedia claims, "WiMAX, the Worldwide Interoperability for Microwave Access, is a telecommunications technology aimed at providing wireless data over long distances in a variety of ways, from point-to-point links to full mobile cellular type access. It is based on the IEEE 802.16 standard, which is also called WirelessMAN." WiMax is a standard used in technology, not a technology. It will survive because the media doesn't know what it is! (How could it die? They'll just label the next wireless whatever as the new WiMax).

DNS Redirect is moving in

TW Cable, RCN, Embarq, Verizon - the list keeps growing of the ISP's using DNS redirect. There are a few companies encouraging this technology (including Bare Fruit, a company I worked with not too long ago). It was hard to get traction for DNS redirect because of the "defiled user experience". If they all did it -- and it looks like that time is coming -- then no one would care. I'd rather see a 404 blank error page, but the domain squatters who put up misspelled word pages filled with ads, pop-ups, and malware deserve to lose the income. [see story at DSL Reports].

UPDATE: VZ stands by DNS Redirect at PCWorld.

Who's Buying Sprint?

The rumor mill is awash with Google buying Sprint. With the ousting of the CEO, the horrible quarterlies, the Clearwire split, and its underutilized network, many shareholders probably wish it would get purchased. Gary Kim says that this is just bankers floating a balloon (since bankers make out like bandits in these transactions).

1. Spin off the iDEN network - focusing solely on government, schools and public safety;
2. The CDMA division should become a Purple Cow with 4G, lots of apps & BYO handsets;
3. Remember you used to be the # 3 long distance company? You know that pin drop thing?
4. Start utilizing that Tier 1 Internet backbone!
5. Create a better store/portal for all the apps that can run on the handsets on your network.
6. You have Agents that want to sell your stuff --- Help them do that!

But is it worth $50B????

If you are Google, you could:

1. Buy 700 MHz spectrum for $6B
2. Work with MOTO, Intel, Cisco/Navini, Ericcson, Nokia, or Clearwire to build out the network from 2009-2011. (Or any combo of those companies) - $2-3B.
3. Create an open source OSS to allow for open network.
4. Open network to devices and providers and micro-payments.
5. Be up and running in 2012.

It would be cheaper to buy Sprint for $50B and sell off the parts you don't need. By 2012, the landscape will look entirely different as the yokes will be off Ma & Pa Bell (ATT & VZ). You need a foothold now. Cable, DBS, VoIP providers, content companies --- are all looking for a Third Pipe. So is the consumer.

UPDATE: Wired story. Another blog post. zdnet's cranky post. Alley Insider on why Google won't buy Sprint. (I don't think anyone actually thinks it will happens, just that it's fanciful to write about on a dull news day to see if the stock can bump. GOOG was down $32 and S down $0.51.

FCC to add Control to Cable

As the 70/70 rule of the Cable Comm Act of 1984 kicks in for the Big MSO's like Comcast and TW, the FCC has carte blanche authority to what it wants. This makes K-Mart happy since he is anti-cable and highly political as he still tries to appease his masters so he can have that Senate seat. Gordon Cook has Scott Marcus' take on it here.

The 70/70 says that if cable is available to 70% of the households in an MSA and 70% pick cable, then the FCC can adopt rules as it sees fit. If only Congress had some English Professors who could help it tighten up all these ambiguous laws.

Presence: For What?

Cisco is advertising it. Microsoft is pushing it. Presence. For Fortune 1000 companies that already are Microsoft and Cisco shops, the integration of Cisco's Presence and HD Video Conferencing as well as MS Live Comm Server and its IM/Presence and Voice over IM into the workplace works at the F1000 level. Because the vendor-client relationships at the F1000 level are co-mingled. How does that work at the Medium (500 employees and less) or even at the Small (99 and under) business level?

The Productivity gains that Presence is supposed to deliver come from integrated communications. So instead of phone tag, you will see that the person you want to talk with is out of the office with his mobile off. So you send an SMS message and an email. This works if the people you need to communicate with give you that kind of access.

Where this really pays off for the Service Provider is in a Hosted model to increase TCO (total cost of ownership) and ROI (return on investment) gains. Also, if you are providing desktop or server support for a client, Presence may be a way to strengthen ties with the client while providing seemingly better support.

As Dale pointed out this monring, how do you get around being blamed for the SIP / Voice functionality if you are not providing that? Good question. Either you need to very clearly define your service or you need to partner with the SIP Provider. (PBX-Change is waiting for your call at 888.482.6723.

I can see how a campus environment can use Presence. UNC at Charlotte just went Cisco (read PR here). The college controls the IT environ for all its employees and students, so it can dictate what platform.

UNC Charlotte has selected a broad set of Cisco Unified Communications applications to unify workspaces across the campus. Cisco Unified Communications Manager provides protocol interworking between the originating and the terminating sides of a call. Cisco Unified Mobility Manager helps to enable single-number reach to people with mobile phones or multiple offices. Cisco Unified Presence Software delivers real-time presence information so that a caller can determine when others are available as well as what their preferred communications media are. Cisco Unified Personal Communicator helps to enable instant messaging, video, voice and presence information in a single interface for Windows and Macintosh desktops.... The university also intends to deploy Cisco's 7921 wireless phone.

What was th etrigger for UNC@C? "The workspace strategy for UNC Charlotte was enhanced by our ability to support and implement Session Initiation Protocol and integration with third-party endpoints and applications." SIP and the 3rd party system --- and possibly because they didn't want to deal with Nortel.

TMC has a post from Nortel titled What A Microsoft Shop Should Do With Cisco VoIP? Seriously!

Jabber blogs about inter-operability in Presence. (We have to use 3rd party vendors to get IM inter-play).

Green Data Centers

"Server farm goes solar: A data storage company generates all its own power using solar panels." [Entrepreneur mag] Certainly possible in Florida, Arizona, and California.

FYI, the keynote at ISPCON in San Jose was about the Web Hosting industry by The Planet CEO, Doug Erwin. ISP Planet has a review. (He made some good points).

Tech Support Videos

Good way to diminish the tech support calls is to let your customers see videos on how to do it. YouTube has a load of them, including the sexy French maids performing PC help on-site. ComputerWorld has the top 10 funny ones.

AOL VoIP Failure

DSL Prime has a missive about the lesson of VoIp at AOL.

"When SunRocket failed, John McKinley blogged about his experience as CTO and President of Digital Services at AOL. He “was to launch a Vonage-like competitor to the market by 3Q/2005. Luckily, I had a really talented team and a passionate leader (Gil Weigand) running the effort. In an 8 month period, they built a carrier-grade telephony company. This went well beyond the base technology development. It meant establishing a call center, building a fulfillment solution for the product, and navigating a litany of regulatory issues (including the new E911 requirement imposed by the FCC). Lots of 90+ hour weeks and cases of Red Bull. TotalTalk was a really elegant solution and the first fully E911-compliant solution in the market. ... We launched, and several things became immediately apparent [listed below and 3 months after launch, done].

1. Customer acquisition costs were really high ($250-300), and nothing was happening to change that dynamic.
2. The major cable players were beginning to become real juggernauts, acquiring phone customers at low costs through really compelling double and triple play bundles.
3. The regulators were no fans of the alternate carriers (VoIP players), and that attitude was not going to change anytime soon
4. The traditional phone companies were going to fight back, offering their own “all you can drink” calling plans at competitive monthly prices ($39-$49/mo), more to fight the attack by the cable industry than the VoIP industry, but there was material collateral damage to the VoIP sector as well.
5. There was inherent channel conflict in having a cable company and AOL under the same roof wanting to sell alternate versions of primary line service in the market at the same time, and due to the importance of Time Warner Cable’s growth to the stock price, any issues were logically going to go the cable company’s way (a painful but pragmatic reality).

Adding some stats about AOL from Valleywag: "AOL has lost 5.1 million subscribers -- a third of its paying user base -- in a year, according to the latest numbers from Time Warner. AOL is down to 10.1 million subs from its peak of 30 million shortly after the merger between AOL and Time Warner in 2001. This could be why AOL is moving to an advertising-based business. Just a guess."

Neustar and DNS: no-charge

Neustar owns UltraDNS now. They had a busy booth at ISPCON. (I don't know if it was because of Mariana or because of the free offer). Neustar is offering recursive DNS services for free to ISP's and educational institutions. (Limited time offer. Contact me for Mariana's info -- and mention that you heard it here at RAD-INFO!)

What is Recursive DNS? (1) A recursive DNS server means that it can process requests for domains for which it is not authoritative. Some DNS servers have recursion disabled and cannot process requests unless they're for the requested domain. (2) A recursive DNS server is a DNS server which contacts other DNS servers to resolve a given DNS node.

Here are some reasons why Neustar Ultra is providing recursive services for free to ISP's and educational institutions:

1. Brand Awareness - While NeuStar is the leading Authoritative DNS Provider, we have limited awareness in the recursive space (looking to grow that market).
2. Creating a safer Internet - Providing recursive DNS not only gives end users piece of mind, but our Authoritative DNS customers gain peace of mind knowing that their customers are getting to them via a safe and reliable method.

BTW: NeuStar has a DNS re-direct service that is free and pays YOU some $$. Call for details.... 813-963-5884. (If you call Mariana at NeuStar Ultra Services directly, please tell them you heard it from RAD-INFO).

Is BellSouth out to kill the Indie ISP?

It certainly looks like what's left of Southern Bell is out to kill off the Independent ISP. BST is taking $40 to $45 off FastAccess pricing on a 3 year contract for new FastAccess DSL subscribers (who also have BST local and LD). Customer gets a $200 bill credit with a 3 year contract on the local line. Customer must be switching from another high speed provider (DSL) and provide a copy of the ISP bill.

Instead of embracing the independent ISP as a partner to stave off cable competition, the ILEC is giving away the store to take back that LESS THAN 1% market share of DSL that the IISP has. Way to stay focused! I mean, obvously the IISP, even Covad, is the biggest obstacle you face. (If you truly believe that, you have bigger issues in Atlanta, NJ and Texas than even I can fix, cuz delusions require a shrink. But if it just means that you have your head... in the sand or elsewhere, well, that might be fixable.

Digium sets Switchvox Free

Digium released Switchvox Free Edition. "According to Digium, the new product includes the telephony features of the widely used Switchvox SOHO edition, and it can be downloaded and installed in minutes on existing hardware..... Switchvox Free Edition includes such tools as an interactive voice response (IVR) editor that allows system administrators to create auto attendants and menus. It also includes voice mail to e-mail, find me/follow me, unlimited calling queues (automatic call distribution or ACD) and advanced reports on system use."

FonalityCRM

FonalityCRM: Fonality has combined a managed SugarCRM solution with both of its PBX offerings: PBXtra and trixbox Pro. "By combining Insightful's CRM expertise with Fonality's telephony suite, Fonality says small businesses will have "an affordable solution that unifies employees with presence management, instant messaging, fixed and mobile calling, and provides a single 360-degree view of customers and business partners.""

Labor Shortage Coming

"TWO DEMOGRAPHIC TRENDS in the U.S. workforce are converging to create a perfect storm for employers in the coming years..... First, the U.S. workforce is aging. By 2010 nearly one in three American workers will be over the age of 50. .... Second, more than 21 million new jobs are expected to be created in the U.S. economy in the same time frame, but just 17 million new workers will enter the workforce. Labor shortages are projected in a growing number of sectors of the economy, including information technology (IT) and communications." [phone+]

One thing is that I don't believe, with the on-setting recession, we will create 17M new jobs -- or if we do, we will lose 17M jobs and it will be a wash (as it has been the last couple of years).

Second, I belive that enough people believe this (FUD) that it is a chance to sell Managed Services to small businesses. To be able to charge the rate you desire, you will need to be able to demonstrate TCO and ROI. Not easy, I know. But a maintenance agreement is better than trying to collect hourly rates that you are nickel and dimed over.

Voice 3.0 - with video, please

A couple of clients have incorporated SimulScribe into their voice offering. A few have added a fax2email service (props to AstroTel's SmartFax).

Some other nifty things you might want to share with your voice customers:

You don’t need a Blackberry, Treo, iPhone or other high-end phone to use PhoneGnome Mobile Web and Visual Voicemail. And best of all, PhoneGnome Mobile Web is free with PhoneGnome service. [voip watch]

Video is the next wave (of buzz). SightSpeed probably has the best video offering for vid conferencing and video email. Toxbox.com also has a video conferencing offering. Vyew.com has collaboration and live conferencing. FreeConference.com is offering desktop sharing for no-charge for a limited time. And this is just a small sampling. CIO mag has an article on Vid Conf.

SimulScribe is just one of the many in the voice2text genre. SpinVox and Jott are a couple of others.

And as long as I am talking add-ons, how about Zen Desk, a web-based help desk for the agile IT organization of today. Hosted, affordable and offers an intuitive user interface and a no-nonsense feature set.[emily]

VZ Goes after Hispanic market

VZ has billboards around Tampa in Spanish. VZW is chasing after the Hispanic market hard. Here's TradingMarkets.com:

Verizon Wireless is looking out for its Spanish-speaking customers. The company launched a new website today to help Spanish-speakers manage their accounts online. The interactive site offers expanded content and features, said Andy Young, director of consumer Internet sales and marketing for Verizon. Check it out at www.verizonwireless.com/espanol

Copps & Adelstein: POW!

JOINT STATEMENT BY COMMISSIONERS COPPS AND ADELSTEIN ON SEATTLE MEDIA OWNERSHIP HEARING

A hearing with only five days notice is no nirvana for Seattle and the Pacific Northwest.This smells like mean spirit. Clearly, the rush is on to push media consolidation to a quick and ill-considered vote. It shows there is a preordained outcome. Pressure from the public and their elected representatives is ignored. With such short notice, many people will be shut out. We received notice of the hearing just moments before it was announced. This is outrageous and not how important media policy should be made. [fcc pdf]

Another CLEC Merger

So Access Integrated is merging with 2-time, 2-time bankrupt Birch Telecom to create a $200M CLEC. Yawn. Two UNE-P players. Phone+ has the rest of story. At this point, the only "Growth" available to CLEC's is through acquisition or re-invention. Acquisition is easier and makes bankers and lawyers money.

Bandwidth Pricing

Bandwidth pricing is all over the map. Cogent and HE and a couple of others at $10 (depending on the commit). The Tier 1's (Qwest, Sprint, ATT, VZB) are all at about $75 per MB on a full DS3 (although a reseller can get it down to about $58). InterNAP and Savvis are near $50.

The big problem is LOOP. Qwest is offering a bundle at $4200 for a DS3 with loop, full IP port and ADTRAN router in the Green Zone. That means less than a 20 mile loop (or $2000 loop).

With forbearance being granted at the FCC, the special access prices keep increasing. In Omaha, where Qwest was granted forbearance in 2005, loops have increased 72%! More forbearance petitions in the works. So far no one has to sell DSL, Frame, or ATM at a reasonable rate. Dry fiber is off the books and so is lit fiber, unless you want to buy out of the FCC Tariff or through wholesale (private agreement).

So what does this mean? If you have a long loop, get a long contract, because rates WILL be going up. And the IP piece can't make up for it any more. Call today for a bandwidth quote: 800-779-0864.

UPDATE: BellSouth.Net 10MB Metro E DIA for less than $1700! Call for details!

Promo: ATT Internet T1 $403, 3 yr, within 25 miles in 22 states plus LNS. Call for details!

Disclaimers: Your mileage will of course vary. And past performance does not guarantee future performance.

Wi-LAN Sues Everybody!

Reuters has the story here. "Wi-LAN said on Thursday it has initiated litigation against 22 technology companies in two actions claiming patent infringement." Wi-LAN is suing: Acer, Apple, Atheros, Belkin, Best Buy, Broadcom, Buffalo Tech, Circuit City, Dell, D-Link, Gateway, HP, Infineon, Intel, Lenovo, NetGear, Sony, TI, Toshiba, Westell and 2Wire.

This is the profile of Wi-LAN from Reuters:

Wi-LAN Inc. develops, acquires and licenses a range of intellectual property that drives products providing access in wireless and wireline telecommunications markets. Some of its fundamental technologies include code division multiple access (CDMA), wireless fidelity (Wi-Fi), worldwide interoperability for microwave access, Inc. (WiMAX) and asymmetric digital subscriber line (ADSL). During the fiscal year ended October 31, 2006, Wi-LAN restructured its operations into a pure play intellectual property (IP) licensing business, and sold its products and engineering services businesses. The Libra 5800 product line was sold to GIL Technology Co. Ltd.; the Ultima 3, VIP and LIBRA MX product lines were sold to EION Wireless Inc., and the Til-Tek antenna business was sold to a subsidiary of Kavveri Telecom Products Limited.

What's up with IPTV?

VON used to be Voice on the Net now it's Video on the Net (PulverTV). VoiceCon nows has a video component. Most of the bandwidth increase on the Internet is due to video (think YouTube and TV shows). That makes IPTV is all the buzz. Telephony has a whole mini-magazine printed quarterly. The latest issue is about the middleware problem. There are over 20 companies selling "middleware" - however that gets defined. But with a consolidation in the provider space, the customer numbers are dwindling as the number of vendors is increasing. (Apparently, the RBOCs are now on the cutting edge of IPTV, RLEC's are. Read here.)

WiMax is another buzz word. And Telephony has an article about how WiMax can be used for multi-cast and unicast TV (maybe). Read it here.

ISP-Planet has an article about an IPTV provider, NeuLion, who is looking to partner with ISP's. Worth the look.

Do I think spending time on IPTV is worth the ROI? No. Cable and ILEC have locked up almost half the households in multi-year bundles. And reports are in that the revebue and income is down due to the bundling. It makes sense: $99-125 for triple play cuts their margins. In my market, Bright House digital cable just jumped $6/mo to $49.95, the Phone is $35 more and Road Runner makes the package $99.95 for 12 months.

If you own a cable franchise and/or have a large broadband installed base in your market, go for it. If you have less than 3000 Broadband subs, concentrate on one thing and get some market share. Many ISP's I talk too have less than 1000 Broadband subs but want to start focusing on IPTV, VoIP, whatever. How about focusing on one thing, maybe 2 -- do them REALLY well with a Remarkable twist and get to 1000 clients. Typically only 15% of your customers will take an upsell in the beginning. (FiOS only has an 11% penetration so far). So at 1000, that's 150 taking voice or TV. Not enough for the headaches involved.

An aside: Windstream and Comcast have gone with TiVo.

CRM means Relationship

On Tom Peters blog, guest post from Steve, asks: "In an age of interchangeable products and easily duplicated services, customer relationships have become one of the most powerful competitive advantages available to a business. Do you agree?"

"We all want our customers to believe “I can’t get it anywhere else” when they think of us. Relationships between you and a customer are often the best opportunity to create something unique and irreplaceable in your customer’s mind."[source]

It's all about the R-ship. Nordstrom's, Nieman Marcus. Ritz-Carlton. Starbucks. Whole Foods.

In a world where no one can beat Wal-Mart, China, and the ILECs on price and cost, you have to Differentiate. Stand Out. Or it becomes just about price.

One way to differentiate is through innovation. Another way is through Customer Relationship Management (CRM). And I'm not talking about the software. I'm talking about touching your clients in ways that are valuable (high touch).

What are you doing about your R-ships?

1. Hand written thank you, anniversary, birthday cards.
2. Follow up CS calls. After any repair / billing / service call, follow-up with a quick: Did we solve your issue to your satisfaction? Thank you for being our customer."
3. In a Hosted VoIP install, do you follow up to ensure that Mary is able to use the service?
4. Hosting clients: We noticed your website, do you need help with SEO or a designer? We have partners we can suggest or a class / webinar you can attend.
5. We noticed that you have a lot of spam, virus problem
6. Reminder service about MS Updates, security patches, and most important: Did you update and run your anti-virus lately? How about backing up your mail / address book?
7. Best clients need more sales. Invite them to networking & charity evenst with you. They will be a testimonial for you and you can introduce them to prospects. Win-Win.
8. New app or website of the week - shows you as the expert; puts you in front of them.
9. Humor of the week - make them laugh and you make a sale.

These are just a few of the ways to be WAY better than the competition. Most of this can be done by a part-time person from their home with a VoIP phone. (BTw, this will be included in my book for sure :)

Christine gives App Developers Lessons

Venture advisor Christine Herron is one of the 2 top women in technology that knows apps / Web 2.0. (The other is Emily Chang). In her latest post, Christine writes up 5 Key Strategic lessons for App Developers for Facebook (complete with astounding stats).

I'm not a developer (and I don't want to be), but the lessons for me were as follows:

1. Prepare for the worst.
2. Niche.
3. Remarkable or Fun.
4. Make it Easy to Use. Period.

These are universal lessons. Creating a service? These apply. Run a business? These rules apply.

Another Busy Day for the FCC

Today, the FCC was the butt of a Code Pink Prank. (Read the story). But the FCC was able to vote 5-0 to end cable exclusivity contracts in MDU - retroactively. This ruling will clearly be challenged by the NCTA and Comcast. Yet K-Mart thinks that this will increase competition at MDU's for TV. How? There's only one cable operator for most of America. DBS and TelcoTV (where available) makes up the competition. K-Mart still hasn't seen an RBOC request he can say No to. (I'd love to see the pics they have on him).

The exclusive contracts are usually to the benefit of the tenants and without the exclusivity many PCO's and smaller cable companies will not be able to invest the money to build into the MDU, according to Steve Ross, editor-in-chief of Broadband Properties mag.

Today's meeting was really about media ownership. With pressure from Congress and the panel, K-Mart said that he would wait till December to decide on rules.