Wholesale DSL dilemma

What do you do when ATT decides to raise the wholesale rate of DSL to the ISP? If you have a counter-signed commercial agreement, you can try to fight it, but to what end? (You would likely need to go to arbitration since the FCC and the PUC do not handle private commercial agreements).

On a list for (mainly) BellSouth ISP's, a post was made that stated:

Personally I have no problem with ATT raising their wholesale rate provided they are raising their end price they charge their customer a proportional price increase. Everyone needs to raise their prices and increase their margins the market is selling services too cheap.
Having said that, I would like to inquire again if AT&T has made any decision to make the 6 and 12 Meg products available to members. Many people may not know but AT&T is rolling out a bundled product called “Universal” where they bundle vice, Internet and cable television. Just like the cable company. All this service will be running on their IP high speed home connection.. Why would any customer buy DSL from an ISP when they can get a 12 Meg connection with their voice and television service? Independent ISP’s not offering bundled service will have to sell it so cheap there will be absolutely no margins in it. AT&T’s bundled triple play is the absolute beginning of the end of the ISP wire line model. So it’s my opinion that having some speed higher than 3 Megs is crucial for many of our member’s existence.

Let me tackle this point by point:

1. It is not the mandate of the PUC or FCC to ensure that ISP's are viable business concerns. (As the owner of said business, that is YOUR job).
2. U-Verse is triple-play to compete with cable triple play. Why would you even WANT to play in this space? (And don't tell me that there aren't enough businesses, because if you have an office supply store, a printer, and a chammber of commerce, you have enough business.)
3. Since the consumer space is a hyper-competitive blood bath, what is your Value Proposition to your marketplace? (Even better who is your target market and why should they buy from YOU?)
4. It is not "your people", unless you have super friendly employess who are fanatical about the customers, follow up on everything, and love what they do. Look around you. Does that look like your office?
5. The other track would be to deliver services ON TOP of the broadband like security, apps, monitoring, backup, et al.
6. But businesses pay more; support calls usually stop at 6 PM; and the value adds are unlimited like Hosted Secured Email, push email, unified messaging, managed firewall, backup, SAAS, and more.

But this is nothing new. I have been telling you for years. I wrote it up in a book. And still everyone hitches their star to the benevolence of the telco. I get that providing access and humping your box (instead of outsourcing and pooling resources) is in your blood. But as a business man you have to have a plan and you have to design your future.

What do you do if on January 2009 you get a disconnect notice from the ILEC for your DSL???? It's less than a year away and you should have a contingency plan. (I know many of you like to gamble in casinos, but do you gamble your whole business? Or just a fixed amount of spending cash?)

Rant over. It's 2008. We should be past the point where we are still fighting for table scraps from the ILECs. Your destiny is in your own hand.

Go to ISPCON. See what others are doing successfully. Go home and do it.

Wi-Fi makes a Virtual Office

NPRG has an article that tries to wrap around the Wi-Fi / WLAN in the office idea. The idea is that support costs decrease on a WLAN. I don't know if that is true. You save on cabling and the office is less cluttered, but cat5 is EXTREMELY more reliable and secure than wi-fi. Where I see WLAN working is at Starbucks and the library. People have a quiet place to go to meet or work, especially if they are tele-workers or SOHO owners. You go stir crazy, so go work from a wi-fi enabled store or library for a while. (I'm told that it is highly insecure to use public wi-fi. Thoughts?)

No Glut in Space

Even though Google, Ask, Y! and Micosoft are building data centers aplenty, there won't be a glut in the market. The new bottleneck for data centers is not space. Boxes have gotten smaller and smaller - and Virtualization has added to maximizing space usage. But all of this has actually compounded the other limit: POWER.

Power is the limiting factor because each data center can only draw so much power. And as we saw in South Florida today when FP&L had to bring down to nuke plants, brownouts and blackouts. Power is the limiting factor.

"Last summer, the thought that we were headed for a datacenter glut was all the rage. It was sagely repeated by Wall Street analysts and other industry luminaries. That glut, however, has largely failed to materialize: we're as short of high-quality datacenter space as we were last summer." [t1r]

FCC Looking at Net Management Regs

The agency that cannot come to grips with inter-carrier compensation; cannot clean up the mess that is the USF; and thinks it should define indecency; now wants to tackle network management for the ISP's. Oh, this should be good, because as I watch Kevin Martin's Harry Potter impersonation at these meetings, I have to wonder how much technology he really understands.

I can't say I didn't see this coming. In fact, if Comcast and company had just reacted properly after the public outcry and if they had sent someone to the Boston hearing that could actually explain what they were doing and why in an authentic voice, well, this too would be swept into the pile of stuff to get to later at the FCC.

FreePress.com did a great job of beating the drum on this issue. I think they must be bored over there, because this will undoubtedly lead to messy regulations and extended court battles, without any real improvement to network management, bandwidth improvement or broadband issues in the US.

UPDATE: Sue Crawford points to some good stuff from the FCC meting in Boston (HERE). But the key would be the statement by Dr. David Reed from MIT:

"Internet Access Providers do not create the Internet for their customers, instead they provide access to a larger collective system, of which they are a small part. The Internet itself is the “network of networks” that results from voluntary interoperability among a wide variety of Autonomous Systems – networks that are not owned by each other, and which do not even have contractual obligations to each other in most cases. All it takes to be part of the Internet as an Autonomous System is to agree to participate according to the very simple ground rules of the Internet."

As it turns out "The core ground rules were laid out in the original design begun in 1975 by Vint Cerf and Bob Kahn. On this panel, Dr. Clark and I each participated in the original development of, and have written extensively about, these Internet ground rules." [Dr. Reed]

I get the points that this argument makes, but I also see that bandwidth inside a network is finite and, if 5% is eating up 40% as most research points to, well, a standard procedure should be established for dealing with it. Federal Regulation by the FCC is NOT the way to go. Look at what they did to the TA96?

The VoIP Top 50

VoIP-news has The Top 25 VoIP Innovations of 2007. Number 1 is Microsoft's OCS. Huh? Switchvox hosted solution was 3. FMC hardware from Avaya and others. The ability to use a Desk Phone was big this year. Also, disposable numbers beat disposable email addresses (unless you consider that many Y! and Hotmail email addresses are disposable).

This list of Top 50 Open Source VoIP Apps from virtualhosting.com includes SIP Proxies, SIP Clients, H.323 clients, IAX clients, PBX and IVR Platforms, Stacks and Libraries, and Developers. Most of this list has been around for a long while, like OpenSER and VOCAL.

Check out both lists to see if you missed anything.

tidbits this week

Jaxtr, a web widget based embedded VoIP calling service, has left beta with 10M users and has launched an advertising platform. [gigaom]

For those challenged by VoIP Faxing: PIKA Fax Adds Faxing to Asterisk

The last PUC caves in to give VZ its Fairpoint deal - which provides VZ with a $600M tax write off and eliminates $1.7B in debt. [dslreports]

C-beyond Amazing Numbers

Rich Tehrani pointed out the Cbeyond 4Q07 financials. WOW!

4th quarter net EARNINGS of $12.5 million due to quarterly sales rising 31% to $76.9 million!

Cbeyond now has 35,041 customers in the 9 markets it has operations in; that's net 1754 customer adds this quarter, which is about 65 clients per metro per month!

ARPU is $750, up a dollar.

"mobile penetration of our customer base reached 24 percent."

Geiger states, "In order to limit the growth in receivables, we have tightened our credit policies, which has resulted in our disconnecting approximately 300 more customers for non-payment in the fourth quarter than we typically see and caused an increase in monthly customer churn to 1.4 percent during the quarter." "Our San Francisco Bay Area market installed its first customers during the fourth quarter, our Miami operation will launch service later in the first quarter of 2008, and we are announcing today that our eleventh market will be Minneapolis, which we expect to launch in the third quarter of 2008." [tmcnet]

Cbeyond did give a warning about the economy:

"The Atlanta-based provider of communications services to businesses said the deteriorating economic environment has increased the number of customers who are unable to pay. As a result, the company has tightened its credit policies and disconnected 300 more customers than usual.... The company said it expects 2008 adjusted EBITDA of $60 million to $62 million, and sales of $355 million to $360 million. Capital expenditures are expected to be $65 million to $70 million." [cnn money]

BTW, did I mention I am blogging over at TMCnet now? On RAD's RADAR!

Qwest Residential DSL

I don't know how many of you are looking to resell Qwest DSL (and other services), but I have found 3 companies that you should look at: Mammoth Networks, CTG3 and Bandwidth Builders.

CTG3 is an example. "CTG3 provides business technology service providers like ISPs and CLECs to connect to both Qwest retail and wholesale business services such as ATM, Metro Ethernet, DSL, DSL Host, and private line in order to provide internet based services to their customers."

Copyright is Not Property

TechDirt has a great analogy argument about Copyright as it is Not property. Read it here.

Boingo, Wayport Team Up

From a Wayport PR: "Boingo Wireless Inc., which provides access to the world’s largest network of Wi-Fi hotspots, and Wayport, Inc., a leader in enabling breakthrough network applications, announced today a new strategic agreement between the two companies. This agreement will enable Boingo subscribers to access Wayport’s entire North American network of Wi-Fi hotspots, including over 9,000 WiFi-enabled McDonald’s US restaurants."

If you are a broadband provider, why wouldn't you do a deal with Wayport or Boingo so that your roadwarrior customers have the same access as AT&T Business DSL customers? (ATT Biz DSL customers get 2 free hours at Starbucks as well as access at Wayport locations like McD's).

15M Dial-Up Base for sale

According to Gary Kim, EarthLink, AOL and Juno/NetZero have a combined 15.3 million dial-up customers. It is a declining cash cow that is probably for sale. But who would buy it?

Microsoft Cutting Deals

Microsoft has a deal with Comcast and Cox to offer small businesses Hosted Exchnage and Sharepoint. Now Cbeyond has struck a deal for Hosted Microsoft Exchnage as well. Now, either Microsoft is telling these providers that Hosted Exchange is huge or they have realized it themselves. Either way, as I have cited before, email is the killer app and if you are not offering best-of-breed and reliable email service, you may lose out to someone who is.

BTW, everyone.net has launched a new AJAX webmail client. You can Outsource your Hosted Exchange servcie to lots of other people including GroupSpark and Intermedia.Net - both ISPCON perennials. But at least offer it.

TechDirt is pointing out that the Palm Centro is the start of the inexpensive smartphone ($99). By the end of the year, everyone who wants a smartphone will be able to buy one for around $100. That means lots of folks who will need Blackberry, Goodmail, and Exchange services - hosted to avoid the Sync issues.

Ideas for the CLEC's 2008

Last week I had scheduled a tele-seminar (titled Ideas for the CLEC's 2008). It was designed to answer some of the repeat questions I get, because consistently, I get the most pings from CLEC's. Regional CLEC's. The pings all center around what to do. For example,

1. What services to focus on or start researching?
2. How do I market to consumers?
3. What should I do about VoIP?
4. Wireless or not?

What is most surprising is that these same folks can't find the time to get on a tele-seminar or get to any show. It just doesn't work that way. If you can't take 3 days to think about and work ON your business, well, that's a problem in itself.

Today, if you are a regional CLEC and you are not Involved with your client base, you better be the lowest priced guy in town. The most successful regional CLEC's are B2B, not B2C (we'll get to why in a minute). They know who they target, with what set of services, and why. Focus.

Can you answer this: What is your USP?

What sets you apart? Why should people buy from you? What do you offer that Embarq, VZ, or ATT offer? (And don't say our service unless you have testimonials).

Why not B2C? Many reasons.

1. The steady migration to cellular.
2. If you re-sell ILEC DSL, in many cases, VoIP is redundant. They have to have POTS any way to get DSL.
3. If you sell your own DSL, you have a limited radius around the CO and likely cannot hit customers beyond remotes.
4. Tom Peters says that you cannot beat Wal-Mart on price. I add you can't beat the ILEC on price - and remain profitable.

The key isn't to market to everyone. It is to market to qualified prospects who need and want your services and can afford to pay for them. And you don't need tens of thousands, you only need a couple of thousand.

Metro Ethernet Ain't Easy

Telecommunications magazine has an case study on Southern Light's experience with Metro Ethernet (over fiber):

While Ethernet is a core part of Southern Light’s metro services offering, Daniels holds no punches in saying Ethernet has been nothing but easy to deploy in a carrier network. “You know, Ethernet is the ugly sister that shouldn’t have made it to the prom, but she did,” he said. “Ethernet was not designed for metro transport [but with] creativity and lack of available resources, we, as an industry, have made it work.” At issue were a series of technical gremlins, particularly Spanning Tree Protocol (STP), which, while not necessarily an issue in the Ethernet-based LAN, were quite problematic in a Layer-2 carrier metro network. In fact, spanning tree issues were a major contributor to outages on its VoIP LEC (Local Exchange Carrier) customer’s networks. Traditionally, Southern Light used to run a Layer-2 network off two core switches to provide Ethernet services, but when that began to have issues, it switched to using Layer-2 switching off a single core switch. The operator has now found its savior in Provider Backbone Transport (PBT), a technology that enhances Ethernet transport with SONET-like deterministic qualities. [using Nortel MERS 8600s]

Video Email

Skype has video and so does AIM and Y! IM. There is SightSpeed for video conferencing and recording. Webcams are cheap. Broadband is available. So why hasn't video email taken off?

GotVMail has been around a long time. Now there's Talk Fusion, the MLM video email service. But even though I get upwards of 500 email per day - from some of the most tech savvy people around - none are a video email request (unless it is a Talk Fusion agent). Why is that?

Why haven't ISP's added video email as another revenue stream? It could be that it is challenging enough to keep email servers, spam filters and anti-virus running without taking calls about video email issues.

Let me know your thoughts. Leave a comment or email me.

ELN Muni links

1. ELN selling Muni - but who will buy? [1, 2-NOLA]
2. ELN is obligated to fulfill its ten-year contract with Phillie [dslreports]

Tech Rumors and News

• Toshiba giving up HD-DVD; Blu-Ray Wins
• Comcast is buying Plaxo
• Nvidia may buy AMD
• Google looking at CNET
• Yahoo talking to News Corp and AOL
• Best Buy Loses Laptop: Owner Sues... for $54 Million
• VZ unlimited calls & data plans rumored
• VZ's billing added to her grief
• SCO Plans Rebound Thanks to $100M Lifeline
• Use of Rogue DNS Servers on Rise (Have you tried using NEUSTAR for DNS?)

Tech Data Adds More VoIP

Tampa-based VoIP Provider, Telovations, partnered with Tech Data.

Telovations Inc. and Tech Data Corporation today announced a strategic partnership designed to extend Telovations’ Managed Voice Services to select Tech Data resellers in 16 U.S. markets. Tech Data will offer its resellers the ability to promote Telovations’ Managed Voice Services to their customer base. [pr]

Telovations follows XO to Tech Data. (XO announced in December that "Tech Data's resellers will now be able to offer XO SIP, a converged voice and data service for businesses with IP-PBX systems delivered over a single, high-speed connection. A bundled solution combining XO SIP service with Cisco Unified Communications solutions will also be available." [inc]

As I mentioned then, I don't see how this helps either firm. Many (most?) of the Tech Data resellers use the API to sell hardware virtually via the web. All sales are drop shipped from a Tech Data warehouse directly to the end user without any reseller intervention.

For one thing, it's one thing for a reseller to ship the PC's, laptops, LAN gear, but it is another to also sell the Voice and Data Network. Way different sales processes and skill sets. Perhaps a few Cisco VAR's would have the competence, but wouldn't they have an agreement with a telecom master agent already?

For another, there is an extensive look at the ability of agents to sell VoIP on Phone+. At issue is the sales skills and technical know-how to do a proper analysis to determine if the small business needs Hosted PBX, SIP Trunks on premise equipment or a hybrid model.

"SMBs are confused as to which flavor of VoIP to go with. In the survey, the companies that have already bought VoIP are evenly split between trunking, hosted solutions and premises-based options. About 60 percent of SMBs with fewer than 50 employees say they don’t know what they want. The remaining 40 percent is evenly split. However, Macario says most large companies that have a holistic portfolio of hosted and on-premises solutions are incapable of leveraging that. "Inevitably, you end up being directed to a sales force that sells only one of those, not all," he explains. "So the pitch for the SMB is on a product, instead of the salesperson sitting down to talk about what the right product would be for the business at hand. They’re very much stuck in sales silos." [phone+]

Final thought: How much margin is in there? The carrier has to make money; the VAR wants a margin; and Tech Data has to make something. Not much different than the Master Agency model, but it would seem to require more management and training. And it will require man-hours in lead management (quoting, collateral generation, coaching and follow-up).

Will Vonage Survive?

One VoIP VP buys into the rumor mill that Sprint will buy Vonage. (I'm not sure Sprint won't get bought before it gets around to it). Ike Elliott has an analysis of Vonage's debt issue:

"If Vonage can refinance their $253M in convertible debt before December, 2008, then it looks like the company can avoid bankruptcy... in these markets ... The more worrisome scenario is if the debt cannot be refinanced, in which case the company may need an injection of capital from wealthy founder Jeffrey Citron, or may need to declare bankruptcy."

Ike also has the snapshot of Vonage's 4Q07 numbers:

1. Subscriber growth declined, with only 56,000 net subscriber lines added, compared to 78,000 net subscribers added last quarter.
2. Customer churn remained high, at 3% per month, same as last quarter.
3. ARPU declined to $28.19 from $28.25 last quarter.
4. Customer Acquisition cost is up to $223, from $206 last quarter. (Vonage calls it Marketing cost per gross subscriber addition).
5. Overall spending was reduced.
6. Reduced SG&A to $77M, compared to $84M last quarter.
7. Vonage had about $800M in revenue in 2007.

Ike thinks the 3% churn is the big worry. TWTC has theirs at 1.1%. I don't see how a consumer commodity can get the churn to 2.3%, especially when it rides on top of a network that it has no control of. A network (called the Internet) that is increasingly moving towards an Exaflood due to video and voice streams in place of the original non-real-time, bursty nature of email and web surfing.

TWTC Joins the Billionaires Club

TWTC climbs to $1B in annual revenue in 2007. Up 33%.

Unfortunately, the year Netted a loss of $40.8M.

TWTC completed its acquisition of Xspedius Communications, LLC on October 31, 2006.

Highlights for 2007 include:

"TWTC Exceeded a one billion dollar milestone with revenue of $1.084 billion. Grew total revenue $271.3 million or 33% for the year. ... "The company also narrowed its 2007 losses to $40.3 million " [from company report]

"In 2007 the company turned over half of its sales people and sales engineers". [phone+]

"Time Warner Telecom also announced plans to change its name this year. It has the right to use the current name until June. It will spend between $6 million and $7 million on branding when it announces its new name." [bizjournals]

TWTC now has more than 25,000 route miles of fiber and lit 10 new buildings in Nashville.

Key stat: 71% of its revenue comes from Enterprise with its carrier segment at 25% of revenue. (The last 4% of revenue comes from inter-carrier comp). (I'd like them to explain the term Enterprise; I think, they mean SME).

TWTC CEO Herda talks about M-EBITDA too much. Who cares about that term? We are bottom line folks here. We want raw numbers.

TWTC spent $624,000 in Lobbying in 2007.

Qwest Made Money

Phone+ reports that "Qwest Communications International Inc. reported Tuesday that its fourth quarter 2007 earnings were up 89 percent."

1. Qwest's 4Q Net income is $366 Million on revenue of $3.4B, which is down 1.5%.
2. Bundles are up to 62%! (CLEC's + cable hate that, since bundle means contract)
3. Consumer ARPU Expands by $4 to $55

Year end totals for Dec. 31, 2007

• Operating Revenue $13,778,000
• Operating Expenses $12,022,000
• Net Income (loss) $2,917,000 = normalized to $1.1B, according to its SEC filing.
• Qwest lost about 1M access lines in 2007, a 7% decrease to total 11.5M retail lines.
• Qwest added 238,000 TV subs in 2007 to end with 649,000 - through Qwest’s own ChoiceTV or its partnership with DIRECTV, Inc.
• Qwest ends 2007 with 2.6M Broadband subs, up 500K from 4Q06.

"Total data, Internet and video revenue – which now represents 39 percent of Qwest’s total revenue – grew 8.7% year over year", according to its report.

"The telcom saw a 22 % increase in total broadband subscribers, although subscribership was down to 95,000 from 165,000 during the fourth quarter 2006." BB subs are getting harder to come by.

Much of the income is due to the fact that Qwest spent $739 million less in 2007 than it did in 2006. (It also does count the $300M+ for Nacchio's litigation fees). But now that it is rolling out FTTN, it will have to spend - and that means losses will mount. The company operates with abouta 10% income margin ($366M on $3,400M). That's not a lot of room for error. But it is all just accounting and numbers.

Almost forgot to talk about Debt. Total Liabilities is $22B, of which $13.65B is long-term. Total Annual Revenue is $13.8B (and declining).

Dell Adds Bro's Email

GigaOm touches on the nepotism favor of Dell buying MessageOne:

Is Michael Dell rescuing his little brother, or does Dell spending $165 million to buy email continuity firm MessageOne make sense? MessageOne has a good product, but without the sexy security component offered by Postini or FrontBridge, buyers never picked up the 10-year-old company. So the deal has more than a hint of nepotism.

This is just one move in Dell's plans to offer managed services. It seems Dell and software companies want to move away from one-time buy and deep in to recurring revenue.

Jim Crowe plays Futurist again

Jim Crowe, CEO of Level3, stopped by the Silicon Flatirons confab to speak about "long-term trends in communications that had several key takeaways, among them":

• Internet video use is here to stay, and will only increase going forward.
• Bundling services with devices is yesterday’s strategy.
• Legislators and regulators are right to be concerned about the potential for monopolistic practices by AT&T, Verizon and cable companies.
• Net Neutrality violations could be handled better by the FTC than the FCC. [GigaOm]

The thing that amazes me is how people in telecom still revere this guy. If he is such a futurist, why hasn't L3 had a better record? As far as I can recall, L3 had one black quarter (and that was obviously a fluke).

I have seen Crowe speak at a Comptel event in Orlando. There are many much better speakers. And his "trends" aren't exactly A-Ha's. Read any trade journal to see pages on internet video and the coming exaflood. You have read here many times that "Truth in Advertising" enforcement (at the FTC) would be sufficient for NN.

Bundling is not going away. ATT's SIM Card only offering may seem like the start, Bell-Heads want ALL of your money and to lock you down. It is a marketing strategy that has survived for a long time. In Seth Godin's book, Meatball Sundae, he explains that bundling is nothing new:

1. What is the Yelow Pages but a bundle of ads and fliers?
2. What is the mall but a bundle of stores?

Bundling is around to subsidize loss leaders. If Bundling goes away, so would loss leaders. That means everyone would pay full price for a phone. I doubt it, but we'll see. First, let's see if Jim Crowe gets this prediction right, "Our second objective is to achieve sustainable, positive free cash flow as soon as reasonably possible. As such, we expect to be free cash flow positive for the full year 2009." [cnnmoney]

VoIP Inc. Closing

VoIP Inc. closes its doors on Feb. 6 per thier SEC filing:

On February 5, 2008 VoIP, Inc. (the "Company") decided to reorganize its operations to focus primarily on business opportunities associated with its patented technology including "click-to-call" and "pay-per-click" applications. Associated with that decision, on February 5, 2008 the Company suspended all of its telecommunications network operations including all current revenue generating operations. The Company also reduced its workforce by 25 persons, eliminating most of its network operations and software engineering staff. The Company is currently entertaining offers on the sale of its network, and has not yet evaluated the potential financial statement impact of related impairments of its tangible and intangible assets. However, a material noncash asset impairment charge ranging up to $23.9 million to the Company's consolidated 2007 results of operations is likely.

FierceVoIP broke the story.

VoIP Inc. has closed down its call termination and network operations laying off 25 engineering staff and has told the SEC it is expecting to have to write off $24 million in losses associated with the network. The Florida based company said it would focus on its patented pay-per-call ad software. The announcement comes only a day after the company announced deals with Google and eBay for its pay-per-call ad software.

VoIP Inc is listed on the OTC market and only recently refinanced through a $2.5 million private placement . In a statement December 27 CEO Tony Cataldo, said: "We are pleased that the existing investor group recognized the significant progress we have made over the past year, and elected to provide additional capital to support our growth."

RUMORS: The CTO, Shawn Lewis, resigned and rumors swirl about his alleged felony convictions.

Dial-UP value by ELN

Ali Mokerabi

Thanks. Actually, to follow-up on the first question, I was wondering, in considering acquisitions of access subs, can you give us an idea of how you value those? What lifetime value are you looking for and how much you might be willing to spend on each subscriber?

Rolla P. Huff, CEO, EarthLink

Sure. Well, let me just spend a few seconds talking to you about how we think about it. I probably won’t get into any specific valuations but as we said in our opening comments, the tenure matters in this business and so we’ve had, as you can imagine, over the years we’ve got quite an amount of information about how various cohort groups tend to churn, based on tenure, based on geography -- we have more data than you can shake a stick at here. And so as we look at any base of customers, we look at those customers against our knowledge base of what they are likely to do and we look at what cash we think we’ll generate and then any offers that we have made in the past are based on how we value that set of cash flows.

Ali Mokerabi

I see. So again, based on that first question, then I’m assuming that you would not be open to acquiring the entire AOL, what they have, over 7 million or 8 million subscribers currently. You would probably look at each different region that they serve and as you said, based on -- make your decision based on tenure and how much cash they’ll bring in?

Rolla Huff

Well, I’m not prepared to say that we will or won’t consider anything. I’m prepared to say that we’re not going to do anything that we believe isn’t going to provide some sort of return to our shareholders.

source = seeking alpha's transcript of ELN's 4Q07 call

SAVVIS Lost More than Pres

Jonathan Crane, President of SAVVIS, will resign March 1. His company narrowed its losses to $2.5M. Revenue for 4Q07 was down, only $197.8 million with earnings of $39.4M. Projections for 2008 are $910M.

Management attributed the decline to the sale of data-center assets to Microsoft at the end of June 2007 and the sale of CDN assets in January 2007. [cnnmoney]

Big Fourth Quarter for L3

Fourth Quarter Financial Highlights for Level3 [via CNNMoney pr]

1. Consolidated Revenue of $1.10 billion for 4Q07.
2. Net loss of $91 million.
3. Positive Free Cash Flow of $41 million.
4. Total Communications Revenue for 2007 was $4.20 billion.
5. Core Communications Services revenue, which includes transport and infrastructure, IP and Data, Voice and Vyvx, increased quarter over quarter by 5 percent.
6. Wholesale Markets Group accounts for 56% of revenue.
7. Communications cost of revenue for the fourth quarter 2007 increased to $444M ($1.77B for year)

SBC Contract Services increased by 3 percent to $73 million from the previous quarter, and includes a final $16 million quality of service performance bonus. This is the last such bonus for which the company is eligible. As previously disclosed, SBC intends to migrate the services provided under the agreement to its own network facilities in accordance with terms previously negotiated by WilTel, a company subsequently acquired by Level 3. Under the terms of this agreement, SBC agreed to pay WilTel a minimum amount of gross margin regardless of the actual revenue generated under the agreement. The agreement, which continues through 2009, has $36 million in gross margin commitment remaining. [CNNMoney]

This quote is hard to believe considering the amount of email I get from Service Providers asking for quotes to replace (or at least back-up) their Level3 bandwidth:

"During the quarter, we improved our provisioning capability by both increasing resources and through process improvement," said Kevin O'Hara, president and COO of Level 3. "Our customer experience has improved, and we are continuing to make process and organizational changes to further improve our capabilities."

The sentiment I am getting based on the earnings transcript and the 2008 Kick-Off call is that unless you are billing $25K, you should start looking for new collocation. (Call if you need co-lo! 813-963-5884). Rumor is that 80% of the L3 collocation spaces are out of power. So tenants can't add any more equipment. Going forward, power WILL be the bottleneck for collocation, not space or conduit.

While not putting a fixed number on the account, it seems like the $8k to $10k space is where L3 wants monthly billing. So after 2 years and lots of smaller customers being purchased in the mergers, L3 will go back to its "Wholesale Customer Approach". This might work out well for the larger clients, like one of mine billing $1M from L3, who has been waiting months for cabinet vents and cross-connects. Maybe with less clients, they can give better service to the Big Fish. (Or maybe $1M in annual billing isn't a big enough fish.)

Despite the negative buzz swirling around L3 for provisioning, customer support, and IP issues, the Indirect Channel (my side of the house) is headed by a terrific guy who really owns any problems that come his way: Craig Schlagbaum. There are quite a few other people in the Channel that are customer focused, but Craig certainly leads the band. That said, if you need Level3 services, give me a shout, because the one-throat-to-choke is mine and I stand by that.

The ELN New Edge Strategy

Rolla spent time covering the New Edge strategy on the analyst call for 4Q07. He did not rule out an acquisition, but has not seen one that makes sense yet. And the sense has to be a cash and debt sale, not a stock dilution deal, since ELN has been tirelessly shoring up the stock price for a sale.

New Edge chases after Multi-Location small and medium business -- the same market that every Hosted PBX vendor chases and the next market segment that the CLEC's like PAETEC and XO will be chasing.

NEN has 2 factors in its favor: a wide DSL footprint and VISA/Mastercard/PCI Cert.

So retail operations are the focus. Convenience stores; jewelry chains; Quiznos; Subway.

A business focus for Service Providers to leverage the New Edge Network: security cameras, secure WLAN, and managed Router. Also, using NEN for Hosted PBX vendors now that DSL comes with QOS

If I was Rolla, I would be pushing Helio smartphones to NEN clients and looking for an FMC strategy. (Heck, if

ELN: 4Sale

I think ditching the Phillie meeting was the first balloon that ELN was getting out of the Muni Wi-Fi Business. (ELN lost $32M during the last three months of 2007 on its Muni ventures. OUCH!) By exiting Helio and Muni, ELN hopes to have positive cash flow this year (better to sell with cash than Money Pits in your portfolio like Helio and Muni Wi-Fi).

"We ended the fourth quarter of 2007 with $289 million of cash and marketable securities, a decrease of $106 million compared to the fourth quarter of 2006." [seekingalpha]

"We’re accounting for our WiFi assets as a discontinued operation. We’ll continue to provide service to people currently on the networks until disposition of the assets in the various communities has been accomplished."

"Dial access is not an organic growth business and we no longer try to run it like it is. It’s a mature business that if run correctly will generate meaningful cash flow for many years to come, so we run it around contribution margin."

ELN is actively looking to buy subscriber base in access lines (dial-up and DSL). Asked point blank about AOL and Rolla side stepped. So maybe they will buy the AOL sub base (IF they have enough cash).(I'll post about this later).

CHURN: ELN puts out churn numbers based on how long the subscribe has been a subscriber. The longer they are with ELN, the lower the churn. DUH! No kidding, wunderkind!

EarthLink narrowband subscriber base declined by 235,000 subscribers in the quarter while the consumer broadband subscriber base declined 21,000 during the quarter. .... EarthLink ended the quarter with 1.1M broadband subscribers, 2.6M narrowband subscribers split evenly between premium and value, and 100,000 web hosting subs. ... Consequently, the annualized revenue contribution from the premium subscriber base is almost $210 million while the value subscriber base annualized revenue is almost $120M.[seekingalpha]

One point made by an analyst is that dial-up modems are not standard issue on PC's and laptops any more. Rolla said they had agreements with Dell and others and the analyst should go check. But I have been shopping for a new laptop -- most do NOT come with modems. 56k Modems went the way of the floppy.

Rolla's plan is more cost-cutting, although even he acknowledges that you can't cut payroll forever with out adverse effects. I guess, he is plotting where the Tipping Point is, since there were more layoffs prior to the 4Q07 earnings call.

So where else did they cut costs? "EarthLink has greatly reduced sales and marketing activities." Customer Acquisition costs for dial-up, VoIP, and broadband were too high.

Line Powered Voice (powered by Covad) was being re-worked. Now ELN is in a marketing test-and-measure approach with one NFL city as the market. Provisioning problems and LNP issues made LPV difficult.

BTW, ELN stands to get a check for $60M when Covad is bought by Platinum Equity. And ELN is still using Covad LPV. When asked, Rolla answered:

We are. We are. Donna, as you know, part of our investment in them was to build out a co-lo infrastructure in the NFL cities with a technology that allowed us to do this. So that is a partnership that if we can get line-powered voice where we want it to be, we’ll leverage. But in any case, we’re not going to roll out line-powered voice aggressively until we know our business model works on it.

"New Edge became EBITDA positive in December and more importantly, we expect New Edge to contribute $4 million to $7 million in positive EBITDA in 2008." Rolla was questioned about New Edge growth. He didn't rule out acquisitions, but he has not found any in 7 months that make any sense to the shareholders.

"the sweet spot for New Edge is our multi-location customers that are on the small to medium size level, so for example, we’ve just signed a recent deal -- I don’t know that it’s been announced so I’m not going to give you the name, but it’s 450 locations across the country and what they are looking for is combinations of DSL and T1 connectivity" ... As far as broadband growth, you know, most of our broadband growth comes from helping our current customers migrate to higher speed platforms. We’re not out aggressively trying to stimulate growth on the broadband side. For us, it’s part of our -- what we try to do for our customers and we try to make their experience with the web a good experience. So if our customer tells us that it’s time for them to move to high-speed, we try to help them with it as opposed to giving them a hard time about it. So I think our growth in our core business will be through strategic acquisitions. I think the business model today, unless we can sort out how to bring in customers with a different acquisition cost model, what you’ve been hearing all along is that the churn profile, the early life churn profile of new customers in this category make it very difficult for us to get returns on what we were historically paying to acquire new subs. So to the extent that we can get that model changed, and we’re certainly -- we think about that but the fact that we are not spending a lot of money suggest that we haven’t figured out how to bring a lot more new customers in and get a pay-back before they churn off. [seekingalpha]

This is an IMPORTANT lesson. They don't grow the market -- they take from others.

Some 4Q07 financials:

• EarthLink's income from continuing operations was $23 million.
• EarthLink generated a net quarterly loss of $9 million
• EarthLink lost $9.5 million on revenues of $22.6 million
• Helio: ARPU = $85; 180,000 subscribers by end of 4Q07; $56M in quarterly revenue.

Shore up Rolla's stock: "During the fourth quarter, the company repurchased a record 10 million shares of its outstanding common stock for $69 million. ... Since the initiation of our repurchase program, the company has purchased 77 million shares for $611 million at an average price of $7.92 and we ended the quarter with 110 million shares outstanding." Also, Helio and Muni Wi-Fi losses are off the books, so their stock and numbers will look better ever quarter.

What Happened to Z-Tel?

Z-Tel was a UNE-P CLEC based in Tampa that re-named into Trinsic, then filed for BK. In the fire sale, Platinum Equity (the billionaire that owns Covad now as well) bought them. PE also owns Matrix Telecom. And not one peep since th epurchase, until today: "COMPTEL Welcomes Matrix Telecom".

Matrix Telecom, Inc., operating as Matrix Business Technologies and Trinsic Powered by Matrix, is an integrated telecommunications provider serving consumers and small and medium size businesses nationwide. Matrix is licensed as a facilities-based CLEC and Long Distance Provider in 49 states plus DC. It has 230 employees with headquarters in Dallas and operations in Rochester, N.Y., Atmore, Ala. and Tampa, Fla.
Matrix is owned by Platinum Equity, a firm specializing in the merger, acquisition and operation of companies that provide services and solutions to customers in a broad range of business markets, including information technology, telecommunications, industrials, logistics, manufacturing, and entertainment distribution. Since its founding in 1995 by Tom Gores, Platinum Equity has completed more than 70 acquisitions with more than $16 billion in aggregate annual revenue at the time of acquisition.

Rumors...

Psst... Nortel and MOTO might merge their wireless divisions. [telecomweb]

Even better, an Islamic Investment firm is going to buy Sprint. Sprint will be writing down $30B (no idea why until Feb. 29).

ATT: Get 2 Hours at Starbucks

ATT is giving its current broadband customers (including iPhone payers) 2 hours at Starbucks. This relationship with Starbucks is an extension of the iPhone deal, since Starbucks has an iTunes deal for music. This pits ATT directly in competition with T-Mobile, the current hotspot provider at Fedex-Kinkos, Borders, and Starbucks.

When I suggested last week to my clients on a seminar call that they should add iPass and/or Boingo to their bundle for road warriors, ATT must have tapped that line and heard me.

The deployment will be provided by Wayport, which has provided Wi-Fi deployment services for AT&T, including several thousand AT&T hotspots at McDonald's restaurants.[infoweek]

Best headline for this: "AT&T Drinks T-Mobile's Latte"

First Books Arrived Today!

SELLECOM

AOL to Spin Off of TW

"For the year, AOL's revenue slid to $5.18 billion, vs. $7.79 billion in 2006. The results were due to a 52% slide in subscription revenue, though advertising revenue gained 18%. The company last year sold its Internet access business in the U.K., Germany and France, contributing to the decline, and saw domestic revenue decrease as it offered email and other products to consumers for free." [source]

"AOL reported operating income of $274 million on revenue of $1.25 billion. That’s down from operating income of $910 million on revenue of $1.84 billion. ... Nevertheless, it is still amazing that AOL still has 9.3 million access subscribers. Who are these people? And why are they paying for what they could get for free?" [zdnet]

"Time Warner will separate the AOL access and advertising businesses. That needs to happen anyway. We need to judge AOL on the advertising business and Time Warner needs to sell its access business. The problem: AOL’s ad business still may not look so hot. Display ad revenue in the quarter was up only up 3 percent." [zdnet]

Time Warner will separate the AOL access and advertising businesses. That needs to happen anyway. We need to judge AOL on the advertising business and Time Warner needs to sell its access business. The problem: AOL’s ad business still may not look so hot. Display ad revenue in the quarter was up only up 3 percent.

Media conglomerate Time Warner plans to separate its struggling AOL unit's Internet access business from its Web portal and online advertising components, CEO Jeff Bewkes said Wednesday. ... The CEO also suggested the company may reduce its stake in Time Warner Cable. [thestreet]

Rumors abound about what will happen with AOL. Some say ErathLink. Some say Google. More likely it will whither and decay without a buyer, much like ELN.

When Selling Managed IT

SAVVIS just inked a 3-year managed IT services deal with Perfect Commerce. NetworkWorld has the headline: "Why Perfect Commerce is mothballing its data center", then the sub-title: "Web site’s shift to utility computing means less IT equipment, staff". This is the reason it is a challenge to sell managed IT services to medium and large businesses -- the current IT staff fears losing jobs.

"Perfect Commerce says the utility computing model allows it to grow its Web site as needed while reaping significant savings. Perfect Commerce is replacing its own IT infrastructure with one operated by Savvis." (Straight outsource deal).

The decision maker can see the ROI (return on investment), if it is demonstrated.

"We’ll probably save around 25% for the people who run the data center," says Del Putnam, vice president of technology at Perfect Commerce.

Cut out expensive consultants:

"We had our own data center. We had our own IT people. But a lot of the software and hardware that we use is very specialized, and so you can’t always find the depth of expertise across all of those systems on staff,"

Virtulaization will save on hardware (CAPEX). Money can be used elsewhere. So can human resources. Most IT staff time is spent in maintenance mode. Now some can move to more interesting (and challenging) projects.

Putnam "recommends IT professionals focus their energy on mission-critical applications rather than hardware or operating systems, which are likely to be replaced by utility computing... Application knowledge "is something we’re not going to outsource."

In a tight economic situation, companies will be looking for ways to cut expenses. In many cases, IT like HR is looked at as overhead, instead of as Resources that keep the company going. When pitching Virtualization or Managed IT remember to demonstrate the ROI -- where is the savings? What's in it for the CXO?

Keep in mind that the IT department will be against this move.

ROI comes from labor savings, CAPEX (hardware), consulting expenses, power, rent, hiring, and admin overhead.

Customer Care is Marketing, Part II

All from Christine.net's blog the last couple of days.

"Recognize that everything is Advertising!" I would say that Everything is Marketing. Brian Tracy says that Everything Counts.

Zappos.com is the Nordstom's of online shoe stores. Why? As Christine writes: "These 10 core values are what Zappos adheres to religiously in both hiring and performance reviews:"

1. Deliver "WOW" through service.
2. Embrace and drive change.
3. Create fun and a little weirdness.
4. Be adventurous, creative, and open-minded.
5. Pursue growth and learning.
6. Build open and honest relationships with communication.
7. Build a positive team and family spirit.
8. Do more with less.
9. Be passionate and determined.
10. Be humble.

"Rackspace recently discovered that full disclosure can result in higher revenues." See the story here.

"GeekSquad actively converts disgruntled customers into loyal brand advocates. “Customers will forgive anything if they know you’re trying."" Read the rest of the story here.

AOL?

Lots of noise about AOL this week. I guess, since the MS-Y! deal, bankers see blood in the water and want to make more deals (like these). Some speculate that TW-Y! makes more sense than MS-Y!. It would probably be less anti-trust, too.

Apparently, AOL is facing the same issue as EarthLink (and presumably NetZero) - AOL lost 800K+ subscribers last quarter. In this NYT piece, speculation includes NewsCorp and Comcast as potential suitors.

BTW, AOL "bought Goowy, a personalized portal company and widget maker,....validating an uncertain market, and AOL has apparently bought into the widget-as-advertising-vehicle concept enough to give a small acquisition a whirl." [gigaom]

Email Remains the Killer App

InfoWeek announces that "Google Debuts E-mail Security Services For Business. The software bundle includes Google Message Filtering, Google Message Security, and Google Message Discovery".

"Google's new security and compliance offerings -- Google Message Filtering, Google Message Security, and Google Message Discovery -- will be made available to users of Google Apps and to users of other e-mail systems, including Lotus Notes, Microsoft Exchange, and Novell's Groupwise."

In another article on InfoWeek, about Microsoft buying Yahoo, the question of Zimbra comes up. Zimbra is the open-source email and collaboration platform that Yahoo bought last year. The article says, "Zimbra mail poses too much of a challenge to Exchange to stay alive if Microsoft succeeds in acquiring Yahoo."

Microsoft knows that there is big money in email (Think Exchange, OCS, Hotmail, and a host of Microsoft VARs), but so does Google (Apps), Yahoo (Y! mail and Zimbra), Everyone.net, and many ISP's.

Sonic.Net just rolled out IMAP to replace POP email. There are companies doing email to voicemail, so travelers can listen to their email. There's plenty of money left in email.

Resi VoIP Idea

If you are selling Resi VoIP, why sell low-end? Why not take a page from the Vertu Racetrack Legend phone? "The phone also comes with a “magic key” that gives the user exclusive access to a global concierge service that can make reservations, book lodging, etc., around the clock and in several languages."

I can think of a couple of verticals, like the Dating Line that has disposable numbers, a party line, a chat room, a celebrity news hotline, and the like.

Concierge features would be easy to add, since Tim Ferriss lists tons of cheap virtual assistant (VA) sites, like Workaholics for Hire, Ask Sunday, ODesk, Get Friday (Your Man in India), Do My Stuff, Brickwork India, iFreelance and AssistU. The busy exec might not mind a phone that integrates with a VA to be valuable. The telcos make money on 411 and DA (directory assistance) do you? Even Google is in the game with 800-GOOG-411.

Satellite Internet

Embarq just entered into agreement as a reseller of HughesNet Internet service. "HughesNet service has download speeds ranging from 700 Kb/s to 2Mb/s and a price range of $59.99 per month (USD) to $179.99 per month." [source] In case you don't want to call Embarq for satellite internet from HughesNet, you can call RAD-INFO, Inc. at 813-963-5884. (We are now a sub-agent).

Embarq wasn't the first. Ma Bell has a deal with Wild Blue to resell their service. KYISPA also is a reseller of Wild Blue Internet.

Satellite Internet is a great compliment to any Wireless ISP. Let's face it: You can't be every where. And you have installers, so why not offer DBS (satellite TV and Internet)? Cut the Customer Cable as often as possible.

Must Protect Old Business

Embarq is looking to protect its legacy minute-billing business. On Jan. 8, 2008, it filed a petition with the FCC to Forbear on the ESP Exemption. Ultimately, this results in IP-to-PSTN becoming toll charges. [Pulver has details]. And GigaOm has the perspective:

As with efforts to unwind net neutrality, competition represents a last resort for most telcos. Net neutrality keeps the dream of counting bits like minutes on hold, because as long as a voice bit costs the same as a video bit or a Facebook bit, metering bits doesn’t offer much promise. Club telco enjoys near monopoly control of Internet backbones. Cogent Communications is the only operator of a top ten Internet backbone without a legacy telecom business to protect. The hand-wringing about video-congested Internet backbones represents the precursor of a campaign to unwind settlement-free peering and increase transit pricing. Embarq recently petitioned the FCC to increase the rates associated with terminating VoIP traffic even as Vonage gets nothing to terminate traffic arriving from Embarq.

Leveraging Managed Hosting

Webcast: Strategies for Leveraging Managed Hosting in Your IT Environment is presented by Peak 10 on Feb. 20 @ 11:30 AM. "The webcast will provide business leaders real-world approaches to evaluating their hosting requirements and determining a viable path to leveraging managed hosting services. Click here to register for this free webcast.

Valuable lessons can be learned from webinars and tele-seminars. Sign up for one now!

2008 Bang!

DSL Reports has it right:

Looks like 2008 is starting off with a bang or two. First is the news that Motorola may spin off its wireless division, then we hear that Microsoft has finally made a serious move to acquire Yahoo. Not to mention the C-Block auction action. There's also the rumors of Sprint finally paying the piper for its Nextel blunder. Qwest and chip maker AMD also have rumors swirling around their possible demises.

Yep. A lot of changes already. (Not that last year didn't have many twists and turns as well. We started 2007 off with the ATT-BST merger. The minimum bid was hit for the C-block in the 700 MHz spectrum auction.

Speculation:

Sprint may see some significant changes this year. EarthLink too. (ELN just named Rolla as Chairman for his great job so far. Huh?!)

One More Thing to Think About: IPv6

Saunders writes that 2008 means companies will be converting to IPv6.

With just 14% of the IPv4 address pool remaining, there is some urgency to getting this started. The entire pool of addresses is expected to be exhausted by 2011.

A whole generation of consumer routers will become obsolete at some point as the requirement to maintain a public WAN address goes away.

Not to mention, a whole generation of business routers. Word is that Cisco is not going to make the EOL (end-of-line) routers upgradeable. We don't yet know which routers will be an easy upgrade. (Look here at Cisco's page). ISP-Planet has some tidbits about Cisco, Juniper and GX and IPv6. WV Fiber, Verio/NTT, Telia, Telefonica, Level3 (L3) and Global Crossing (GX) - are IPv6. SAVVIS, ATT, VZ, and others are working on it this year.

Even IPv6 on Vista isn't easy. Networld World explains.

It'sYourNet Scam

Tom Keating has a total breakdown on the hype that is It'sYourNet. Tom breaks down all the hype.

The $13 Billion that it has "raised". The coming IPO that was SEC approved in 2004. (They are still in the quiet period). The lack of any background or PR available. Affiliate sites include yourwifiinternet.com that claims to offer wireless T1's for $19.95; and T3wirelessinternet.com. Can you say MLM?

CEO Checklist

Colo Ad Dissection

1. Obviously the colors take away from the text.
2. Also, maybe too much text.
3. The picture makes no sense.

Keys to ads: Clear, Concise, Repetitive measure with a call to action.

Need help with this stuff? Join the Tele-Seminar this Thursday. Planning Your Marketing 2008, February 7, 2008 at 3 PM Eastern. Register now.

Customer Care is Marketing

Customer Service is the New Marketing is a one day summit in San Francisco, February 4, 2008. It is also one of the themes of Seth Godin's Meatball Marketing. "Every touch of a customer and prospect is a chance to win or lose their business," writes Peter Radizeski in his new book, SELLECOM.

At DEMO 2008, support was a theme as well. As Christine.net reports, "During today's DEMO presentations, it became evident the lines between consumer and enterprise support are blurring. Business IT tools are becoming more granular, and consumers are realizing more transparent access to experts while gaining control over rules-based systems for the home. Given that the average household spends one weekend day per month fixing home computer issues (per Support.com), the need is compelling."

Christine Herron follows this up with a list of companies in the Customer Service & Support side, including Support.com; Support Space; Symantec; Aternity; HelpStream; and Get Satisfaction.

It seems that ISPCON exhibitor, BobCares, is up to the task as well.

If you are handling lots of hard drive issues as well as malware and virus crap, my own suggestions include the following:

1. PCVive - a PCI card for desktops to create an image of the hard drive as backup.
2. Persystent Systems is software I used to market. (They just got more VC money as they burn through lots of cash in that cluster mess.) The patents and underlying O/S, Rembo, were purchased by IBM in 2006. So why wouldn't you buy Big Blue's solution instead. It is similar to Deep Freeze joined with Ghost. It is a client/server solution and requires server space for images; server access; hard drive re-formatting to add the solution.
3. Geeks in Sneaks and Clean Machine both offer PC Maintenance plans that can be white labeled. Make money without the actual headache. It's called Leverage.

Anti-Trust Case Against ATT

""LinkLine Communications Inc. and three other ISPs sued AT&T Inc., then known as SBC Communications, in 2003 for violating antitrust laws by engaging in a so-called "price squeeze." The price squeeze allegedly occurred when AT&T, which provided the ISPs with wholesale access to its network, left only a slight difference between the wholesale price and its own competing retail Internet service, leaving the ISPs with little room to profit.
AT&T asked a federal district court to dismiss the suit, arguing that antitrust law doesn't require it to assist its competitors by offering access to its network. The company only provided such access because it was required to do so under telecommunications law, AT&T said in court papers.
The district court and an appeals court ruled against AT&T, allowing the suit to proceed, pending the outcome of AT&T's appeal to the Supreme Court."

Reprinted from Yahoo news

Microsoft Wants Yahoo

After layoffs amid slumping revenue (when compared to Google), Microsoft made a bid for Yahoo for $44.6B this week. Many analysts had predicted such a move coming. No one predicted it would happen so fast (or at a 60% permium). Everyone is analyzing the deal - as it affects Google, tech in general, Silivon Valley, start-ups, and advertising. Mainly, it is about Microsoft. Period. They have been unable to mount anything against Google, so now its time to buy some.

Help is on the way

Ideas for the CLEC's 2008 CLEC's are facing a tough year of competition from the Duopoly. We will go over a couple of case studies to show what could be done. February 12, 2008 at 3 PM Eastern Register by email or by calling 813-963-5884. Just $49.95 per executive

What Can a Resi ISP Owner Do? The Duopoly is squeezing you. How do you get sticky? How do you increase ARPU? Is there Marketing that works? February 15, 2008 at 3 PM Eastern Register by email or by calling 813-963-5884. Just $39.95 per executive

How to Sell SAAS Software as a Service can be a new revenue stream for your company. Join HyperOffice and RAD-INFO, Inc. as we discuss SAAS and the ways to offer it to your client base. PowerPoint February 19, 2008 at 3 PM Register by email or by calling 813-963-5884. Just $19.95 per company

Now Available!!

SELLECOM: 101 Ideas for Marketing in the Telecom Jungle

by Peter Radizeski

February already!

Ah, February 1, 2008. We are already into month 2 of 1Q08 and fiscal year 2008. How many resolutions have already fallen by the wayside? You may be wondering where to start on improving things for 2008. Or you may be wondering how a month went by so fast and not much got done.

My goals for 2008 are to help 10 companies achieve their goals. To market myself to my prospects, I am speaking at and attending conferences; writing this and other blogs; publishing my book; interacting with prospects in online forums; and holding tele-seminars and webinars.

Speaking last night with a prospect, it is clear that many people want revenue, but want easy revenue to come in at a steady trickle. That's not how it works. It comes in waves, if at all.

Both sales and marketing require constant feeding or the funnel runs dry. Marketing is getting the attention of your target marketplace. It consists of Branding, PR (Public Relations which includes PR (press releases), Advertising, and Operations. That's right, Customer Care is as much about Marketing as Ads. Every touch by your organization to your marketplace is a chance to win or lose a chance. Even your truck with your logo driving on the highway, while advertising your business, could also be sending a bad message if the driver is a jerk. Every touch. And in a crowded space, it is difficult to get attention. The key is to spend your effort on the correct marketplace. That would be your targeted field of qualified prospects. What makes them qualified?

1. They have a need for your service.
2. They want to buy your service.
3. They can afford your service.

Wanting it is more important than needing it. And being able to pay for it is even more important. But if they want it bad enough, they will find a way to buy it.

Guerrilla Marketing is one way to get attention in a non-traditional manner. Tactics may create buzz or WOM (word-of-mouth). WOM requires that you have an interesting story to tell that is easily repeatable. Not a paragraph out of a business book, but a concise, memorable story.

Affiliates, Referral agents, and Testimonials are all ways to get others talking about your company. However, Customer Evangelists, Sneezers, Buzz Agents, bloggers are even better. That's the 80/20 rule. 20% of your customers and agents will result in 80% of your results. You need a system or process to get there. Do you have one in place? Or is Hope your Strategy? It likely won't happen on its own or by accident.

Final thought: If you don't control the message about your company, someone else will.

There are 4 P's in Marketing. Product, Price, Promotion and Position. Let's work on those. Next Friday, we have the first of many seminars to help you jump start 2008's revenues. Who is your Chief Revenue Officer? Sign him up!

Planning Your Marketing 2008 Chances are if you don't plan to market, you won't. In 45 minutes we will run thorugh the Guerrila Marketing Plan and discuss the use of a Marketing Calendar. Register by email or by calling 813-963-5884. February 7, 2008 at 3 PM Eastern Just $29.95 per executive

Resellers Moving to Facilities

When Access Integrated bought Birch, it was the merger of two switchless resellers. Basically, a UNE-P type program. At the merger, it was announced they would begin moving to facilities.

In an interview in Phone+ with executives at 6 reseller CLEC's, the execs hint at a move to facilities in the works.

Smart idea. With forbearance petitions scattered throughout the FCC, it's time to hedge your bets. It will be a challenge though. All the execs complain about working with their carriers - from Level(3) to Qwest and about 20 others in the mix. Easy to complain about integration and execution when you are not a facilities based CLEC. We'll see how the move goes.

What does this have to do with you?

I'm glad you asked. Many ISP's resell ILEC DSL. The book on that could end January 9, 2010. What's your strategy for that?

In the same interview, the execs talk about the impossible MVNO environment. Only PNG has a cellular program running. And PNG hates it. It is not profitable and a huge challenge. I notice that XO never gave that a try. Qwest and Embarq are not MVNO - it's straight rebill.