Seth's Triiibe

Seth Godin has a new book coming out (Tribes) as well as a social networking site to accompany it. Here is Seth's idea:

"One of the ideas I talk about briefly in the book is that powerful tribes aren't open to everyone. The exclusivity makes it work. .... Even with just a few people in the pre-beta tribe we've built, I can already see how powerful it can be to have a safe, well-lit place on line where like-minded people can connect."

Which is exactly why people want to connect and new social networks pop up weekly.

Guidelines for the triiibe

• Everything on the triiibe, stays there. We agree not to cross post or to quote without permission.
• The best triiibe members are active posters in the forum and generous with advice and counsel. Lurkers... wake up!
• It's not a promotional platform. The goal is to learn and to help, not to sell.
• The site is by invitation only, and our moderators are free to disinvite anyone who's not making the site a powerful resource.
• It won't work without you. Thanks for joining.

This sounds exactly like BarCamp. Everyone needs to share for it to work. No lurkers.

This same concept of "It's not a promotional platform. The goal is to learn and to help, not to sell." is a great rule for Conference Speakers. People want to learn from Peers. What works. What doesn't. We are looking for speakers for ISPCON in San Jose in Nov. If you have something to share, let us know.

XO Gets Out of Debt

XO eliminated all of its debt by issuing senior shares to Carl Icahn and his buddies to the tune of $780M. It probably dilutes other shareholders, but debt-free is good - even for a confused company like XO. [TJS]

Dolly Sells DR

This is a reminder about BC/DR Planning.

Hurricane Dolly, a tropical cyclone that hit Southern Texas last week is a tragic reminder of the need to consider disaster recovery and business continuity planning.... The storm caused no deaths in Texas, but caused an estimated $1.2 billion dollars in damage and left thousands without power. Unfortunately, this storm was not an isolated incident. Dolly was the fourth tropical cyclone and second hurricane to form during the 2008 Atlantic hurricane season. To add even greater perspective, in 2007, there were 399 natural disasters impacting nearly 200 million people across the globe and with an economic impact of more than $60 billion dollars, according to the 2008 Edwards Disaster Recovery Directory. [phone+]

It is very difficult to sell Business Continuity Plans or Disaster Recovery. You have to have great questions, measure lost productivity, and put in the time with follow up, answers, case studies, and more questions. Another way to do it is to hold seminars about DR or BC. Bring in a Hurricane specialist, a data center, an Insurance adjuster, etc. You end up being th expert. The Chamber would probably help you. WISP's especially should be selling back-up broadband, redundancy, DR.

ISP Support Poll

PC Mag has a poll on Tech Support by ISP's. VZ, Optimum, and ATT won.

Satellite service, represented only by HughesNet, again comes in with a paltry 5.4 for overall score, and the worst numbers for fees (3.2) and speed (4.5). People obviously don't feel as if they're getting what they pay for with the dish.

When nothing else is available, people will take Satellite - HughesNet, WIld Blue, or other - over dial-up, but they will complain anyway.

PC Mag also polled about VOIP Providers. Cablevision won again for OptimumVoice and Vonage is tops for cheap voice. Only about 1000 people voted in any category so it's not much of a sampling.

Are you polling your customers to see how YOU are doing?

C2C

"IntellaTALK is a state of the art click to call service that connects customers visiting your website to your phone. It is the next generation sales and support tool for e-commerce." Yeah. That's really original. Anyone that uses the BroadsoftWorks platform can do this. Plus there are quite a few free VOIP 2.0 companies that give you this capability.

A Productive Salesforce

Ike Elliott was discussing Level3's numbers and Sales plays a big role.

Business Markets Group isn't growing at the expected rate. When questioned about this on the conference call, Neil Hobbs pointed to the fact that they have had quite a bit of turnover among Business Markets salespeople, and as a result many new salespeople are ramping toward productivity now. That's great if the salespeople ramping toward productivity don't also churn themselves out. Growing a productive salesforce is one of the more difficult tricks to pull off in telecom, requiring selectivity in hiring, diligence in monitoring sales performance, discipline in enforcing standards, and iteration when salespeople don't make the grade. It's apparent that Level 3 is in the middle of that process right now in the Business Markets Group and the jury is still out on whether they will be successful. This one certainly bears watching over the next two quarters.

As I posted on TMC's On RAD's Radar, Sales is Key right now and many of my clients have turned their focus to Selling and Making Sales. This is Job 1 now.

I have a book, SELLECOM, that can help. I have calls about sales tips (How to SELLECOM). There are countless books written, webinars, seminars and coaches. (Jeffrey Gitomer is in Orlando in Sept.) Get some help making some sales team as productive as possible. Take a look at Landslide.com too. You get a Virtual Assistant that will input some data for the sales folks, which is a huge boost for those older sales types who don't like CRM.

Vonage Survives ... for now

Ike Elliott, TMC and Telecomweb have articles about Vonage this week. They refinanced the debt and are looking for a new CEO. (How Citron has been able to hold his office this long is beyond me. He was sanctioned by the SEC years ago and supposedly was not allowed to hold office in a public company. The federal agencies do NOT perform their enforcement roles well at all, which explains the state of the union.)

The Re-Fi was done through what we call a Loanshark, I mean, Private Equity with 15% vig that will increase. Telecomweb has all th edetails and Ike expands on it, but basically the re-fi screws the pooch too.

"Vonage has some $253 million in convertible notes that can be put to the company right before the holidays [Dec. '08] and, if it doesn't pay up, no more Vonage. However, in order to win a loan to re-finance that debt, the carrier had to swallow terms that include issuing senior secured debt, paying a variable-interest rate that looks like it will start in the neighborhood of 15 percent with no upward limit, and spending between $21 million and $24 million in fees and expenses. Vonage had announced a financing deal months ago, but the deadline passed with no commitment.
Here's the problem in a nutshell: Vonage doesn't have anywhere near $253 million left in the piggy bank. As of the end of the first quarter, it had only $189.8 million in cash, cash equivalents and marketable securities; only $148.3 million of that was readily available (TelecomWeb news break, May 8). Its current cash position should be known in another couple of weeks, when it reports its next quarter. And unless it's staged a magic turnaround, it will be even deeper in hock. Vonage may have to use some of whatever cash it still has - or find additional debt. Its new financing, Vonage says, won't even cover all $253 million, so the question is: What happens next? [telecomweb]

Could be worse... Have you seen the Infomercials for MagicJack? Jon Price saw David Isenberg hawking MagicJack on one of them!

VZ Road Blocks on T3

On LinkedIn this morning:

Hi All, We are a CLEC looking for a contact at Verizon to expedite orders connecting our CO to theirs. We need this to be an executive contact who can remove roadblocks as the VZ field seems to be in turmoil.

I don't understand what he is ordering because the only CO is the ILEC CO. CLEC's have POP's. Connecting them can be Special Access (especially in VZ-Land because they have forbearance on just about everything except UNE). If you have some insight (or a contact at VZ), please sign in to LinkedIn and let them know. (I don't know of anyone at VZ that would want to help any CLEC do anything).

WiMax Gear

KYISPA has 2 posts that run down basically a list of gear available for people looking to do WiMax or 3650 MHz. Take a look. It includes AirSpan, Redline, NextPhase, GigaBeam, Alvarion and others plus links and answers to 3650 questions.

The FCC’s 3650-3700 MHz band requires fixed and base stations be at least 150 km from 86 grandfathered earth stations without consent, or within 80 km of three federal radar facilities without successful coordination. The rules give the locations of these facilities. Last week’s public notice is available here (pdf).
Applicants can access the Universal Licensing System web site at http://wireless.fcc.gov/uls. In order to file an application for a license and to register fixed and base stations in ULS, applicants must have an FCC Registration Number (FRN). If the applicant does not have an existing FRN, they must register and obtain an FRN prior to filing the license application. To register a station, the licensee will need to provide specific technical details, including whether the equipment uses a restricted (RS) or unrestricted (UR) protocol, the FCC Equipment Identification number (FCC ID number), the base or fixed station’s location (latitude and longitude), and other technical parameters, e.g., EIRP, and antenna height above ground.

There is no direct link to the posts, you need to go to the front page and scroll down.

CALEA Compliance

I ran across this article this morning from VoIP-News about 4 ways to comply with CALEA. Basically, it is DIY (do-it-yourself), Outsource it, get part-time help, or get government help. I don't understand the last two. KYISPA members are sharing a CALEA box, which I think is a great idea (and just one reason to join KYISPA. The other being networking with other ISP's and the deals with vendors like WildBlue). There is one more way to comply. WISPA has an FBI approved method. (The WISPA CALEA FAQ is here. The WISPA CALEA Standard is here, which is just one reason to join WISPA.)

Corporate Helps Broadband Demand

As Talent Retention and Management increases in challenge, corporate managers are going to be pushing remote broadband usage. In WebWorkerDaily's article, 14 Things Corporations Can Learn from Seasoned Web Workers, the author explains that workers want a life balance, less commute, less travel and less cube. (Been there, done that, totally understand). It is a huge lever to get corporate to let workers be remote, but as gas prices, commercial real estate, and health benefits increase, corporate will have to think of new ways to do business. All of those ways require a big fat unmetered pipe to the tele-worker. Broadband is a requirement for workers, especially remote ones.

The Weak in News

Ma Bell made 30% more profit this past quarter (2Q08).

Sprint sold all 3300 towers for $670M to pay down debt. Looks like Nextel iDen is on the block.

NextWave (in Canada) sold off its AWS spectrum.

Pittsburgh Cancer Institute director says cell phones cause cancer, especially in children and maybe, like cigarette smoke, second hand EM can kill you.

Equinix earnings says that collocation is going strong.

Level3 has finally solved its integration issues and loses $33M.

Host.Net adding Fiber

After buying WebUnited / expedient and then WV Fiber, it was announced last week that Host.Net will be using FiberLight to add some metro fiber in the South Florida LATA. FiberLight is the old Xspedius Fiber Group (and even older ASCI) that runs a fair sized fiber network in Florida.

"The metro fiber connections provided by FiberLight will enhance Host.net's reach within South Florida allowing it to deliver enhanced services. Host.net, a leading technology company in South Florida wants to create a 10G network with the lowest possible latency from Miami to West Palm Beach that will connect major data centers, commercial buildings and POPs to the Host.net facility in Boca Raton. [source]

Disclosure: I am a referral agent for FiberLight and have done some work for Host.Net.

Selling, Prospecting and Lead Generation

I have not been blogging as often here, largely due to too many time commitments with consulting gigs, speaking, organizing ISPCON with Jupiter Media and WISPA, planning BarCamp Tampa Bay, and putting together a Sales Training System for clients.

Many of my clients have the technical knowledge, but lack some of the sales skills necessary to increase revenue. Putting up towers is fine, but you need to fill those AP's to pay for it and to get cash flow for the next tower build. It goes the same for collocation at a CO; you need to fill the DSLAM with 100 customers as fats as possible.

Since my book as come out, I have been working with service providers (CLEC's, cablecos, ISP's, WISP's, VOIP and hosting companies) to train their non-sales staff on ways to upsell and cross-sell as well as helping the sales staff develop both a Sales Plan and a Sales Process. I have been writing about these items at Marketing Idea Guy.

I have also been working with Agents on sales skills (like next week when we host How to SELLECOM: Collocation with Host.Net.

Next up will be a launch in September of a training package for your business that includes developing a Sales Plan and a Sales Process as well as a USP for your sales team.

VMware Free?

Via CNET news and the VMware press site comes notice that the beta server software is available to download for free:

VMware, Inc., the global leader in virtual infrastructure software for industry-standard systems, today introduced VMware Server, a free new entry-level hosted virtualization product for Linux and Windows servers. The product is available as a beta download at www.vmware.com/products/server/.

DNS Money

DSLReports writes that OpenDNS is making about $20K per day from Yahoo/Overture search ads on its DNS Re-direct service. Granted tha's from 7B queries and 2M searches, but there's money in re-direct. (I tried to tell people that when I was hawking for Bare Fruit, who now works with ELN and other ISP's of that size).

The Cash Flow Game

Dan Caruso is CEO of Zayo. He was at ICG and L3. In his blog he writes about Rolla taking over EarthLink.

"Earthlink is a classic telecom story. Their core business was end of life. This was clear prior to Rolla taking on the CEO position. The company he inherited didn’t feel too kindly about managing their business downward. The reality of a shrinking business isn’t innovation it is all about squeezing cash flows out of a declining revenue base. RIFs, minimal product development, no investment in new technologies, etc. is the game."

He makes good points and so does Rob Powell. Rob wrote about EarthLink's cash flow. It has settled the stock at $10 now that it has dropped every business gambit - Helio, Muni, BPL, etc. What happens now, though?

Caruso talks about the strategic thinking being clouded by the dial-up success. As I have pointed out before ELN was a Marketing company, then tried to be a Network Operator and forgot how to market.

"Earthink tried to do two things. One, it tried to deal with the realities of a permanently declining core business. Two, it also aggressively invested in highly speculative new businesses. ... Their passion for the Earthlink brand would have been an emotional roadblock to hard harvesting their declining core business. ... It is so important to understand how the emotions of an organization play into decision-making. If not properly understood, strategic thinking becomes clouded. Confidence that arose from past successes could lead to sloppy investments in speculative new businesses. Cultural tendencies–in Earthlink’s case, their dial up success was due to marketing prowess–could impede a company if its strategic challenge shifts dramatically."

Are you still reselling DSL because your strategic thinking is cloudy?

E-Rate Training

There is upcoming one-and-a-half day Schools and Libraries Fall Applicant Training sessions, “What We Do and Why We Do It,” for presentations on key topics for applicants including tips for success, audits, and eligible services.

Dates and Locations

• Mid-Atlantic Training (Washington, DC Area) on Sept. 11-12, 2008 at the Crystal Gateway Marriott in Arlington, VA
• Northwest Training (Seattle) on Sept. 16-17, 2008 at the Red Lion on Fifth Ave. in Seattle, WA
• Western Training (Denver) on Sept. 23-24, 2008 at the Doubletree Hotel Denver
• Midwest Training (Chicago Area) on Oct. 2-3, 2008 at the Crowne Plaza Chicago O'Hare in Rosemont, IL
• Northeast Training (Newark Area) on Oct. 6-7, 2008 at the Renaissance Newark Airport Hotel in Elizabeth, NJ
• West Coast Training (Los Angeles) on Oct. 15-16, 2008 at the Renaissance Montura Hotel Los Angeles Airport in Los Angeles, CA
• Southeast Training (Atlanta) on Oct. 21-22, 2008 at the Renaissance Concourse Hotel in Atlanta, GA

Agenda

Training Times

Day 1 - 9:00 a.m. to 5:00 p.m.

Concurrent Beginners and Advanced Sessions ( 9:00 a.m. to 11:30 a.m.)

On the morning of Day 1, there will be two concurrent training sessions—one for beginners (individuals with less than two years' experience in the program) and one for advanced program participants (two or more years' experience in the program)—focusing on topics relevant to each audience. To help us allocate meeting space appropriately, please indicate your preference on the training registration form when you register. However, you can change your mind on the day of the training.

Day 2 - 8:30 a.m. to 12:00 p.m.

Please note that all seven training sessions will cover the same information. A detailed agenda will be available later this summer.

How to Register

Registration for the training sessions is complimentary. Space is limited to the first 250 registrants per training. To register: Click on the regional training links above in the Dates and Locations section or visit www.usac.org/sl.

BackUp Idea from Iomega

Imagine selling an external hard drive for back-up storage and adding a Web 2.0 component. You don't have to, Iomega is now doing that.

Beginning today, those who purchase an Iomega eternal hard drive can choose a version of Retrospect Express, and will get 2GB of MozyHome online backup for free or unlimited Mozy backup for $4.95 a month. If you already own an Iomega drive and have downloaded Retrospect, you can upgrade to the latest version, free of charge. [pcmag via y!]

Backup is Peace of Mind, Insurance, and necessary. Unfortunately, like Insurance, it has to actually be sold. Are you selling it?

Speaking of Insurance:

You can purchase accident insurance that covers cracked laptop screens, find your own online backup system (or build one in-house), and pay separately for faster warranty response, of course. [pcworld via y!]

What a great idea!

Refer Away

From Phone+ mag:

Managed services provider Whaleback Systems introduced a new referral program that pays $500 for referring new SMB customers to Whaleback’s Crystal Blue Voice Service with new customers receiving $500 off their first phone bill. There is no cap to the program; the referrer is paid for every referral that becomes an active Whaleback customer. .... Whaleback said its referral program is ideal for independent sales agents already serving the SMB or enterprise marketplace, such as commercial real estate agents, commercial equipment representatives, business services, offices administrators .... "The referral program is designed with flexibility and simplicity in mind - there are no sales quotas or sales responsibilities," said said Mark Galvin, founder, president and CEO of Whaleback Systems.

Simple enough. Are you using a referral system? I don't mean do you have one sitting there passively. I mean, do you actively use a Referral System to generate sales?

VoIP Pricing

Magicjack.com is now using Infomercials on TV to sell its appliance and service. It's $40 for the first year of service. This makes no sense to me.

Now ViaTalk is offering New customers who purchase one year of the ViaTalk VT_Unlimited Calling Plan for $199 ($17 per month) two lines for the price of one, plus one year of service for free. A $30 activation fee applies, and the Linksys VoIP adapter costs $10 to ship. The plan includes e911, voicemail, caller ID, call waiting, call forwarding, free in-network calls, and more. Other VoIP promotions (from dealnews.com):

• Two years of JoiPhone.com Unlimited Calling for $14.95 per month + free additional line.
• voiceral.com Annual Unlimited Plan for $18.99 per month
• Vonage Premium Unlimited Calling Plan for $24.99 per month + one month for free
• Packet8 Unlimited for $24.99 per month + free Uniden UIP160P VoIP Phone
• AT&T CallVantage Service Plan for $24.99 per month + free month --- which is the strangest since AT&T has decided to take CallVantage out of the affiliate channel, which analysts took as a sign that at 178k users, it was done.

eComm 2008 vids

Lee Dryburgh sent me a link to the videos from Emerging Communications (eComm) 2008. Take a look and let me know what you think.

Are You the Next EarthLink?

EarthLink lost money in Muni Wi-Fi, in BPL, and in Helio. It might be making money in Dial-Up but that shrinks every day. Maybe New Edge Networks is cash flow positive. But as DSL Reports puts it:

I remain morbidly fascinated in seeing what the stumbling corpse of Earthlink (who stopped funding Helio late last year) will do next. They lost $80 million on Muni-Fi last year, BPL is going nowhere, they can't share access to next-generation broadband networks, and their dial-up customers continue to flee in droves. ..... All of these options were supposed to represent Earthlink's multi-pronged approach at countering the incumbent stranglehold on the terrestrial and wireless broadband markets, and all have failed spectacularly. So now what?
What's the latest on the Earthlink death watch pool? Put me down for October of 2008.

Is your company doing any better? Still relying on Dial-up revenue to support your flagging DSL subs? Still think that any day now, the game will change and you will get a real Wholesale rate for ILEC DSL resale?

Well, Hope is not a Strategy. So now what?

Tech Support Hilarity

Have fun watching this movie at thewebsiteisdown.com!

VoIP Dealings

Ike Elliott talks about Vonage's debt problem leading to BK here.

Luca talks about RIBBIT being bought by BT here.

Dallas, Atlanta, Miami Waves

It's summer time, so it is time for surfing on waves. Or as FiberLight likes to put it: Flat Rate Pricing on 10Gig Wavelengths between the following routes for a flat $5,000 per month with no installation charge. The terms are 36 months agreements. Our wavelengths are delivered over our Fujitsu 7420 Platform which is monitored 24 hours a day 7 days a week from redundant NOC facilities in Texas and California. We can offer network protection for an extra $1500.

A Location - Z Location

Dallas

• 2323 Bryan
• 1950 Stemmons
• 400 S Ackard
• 3180 Irving Blvd
• 2020 Live Oak
• 3000 Irving Blvd.

Atlanta

• 56 Marietta
• 55 Marietta St
• 11650 Great Oaks Way
• 250 Williams St.
• 345 Courtland

Miami

• 50 NE 9th St.
• 11300 NW 25th St.
• 36 NE 2nd St.
• 1 NE 1st St.
• 2115 NW 22nd St.
• 100 N Biscayne Blvd

Call RAD-INFO, Inc. for details or to place your orders: 813.963.5884

ISP Cap Problem

This blog post, The ISP Conundrum, is something you would hear at ISPCON in the old days.

"Now that the mom & pop ISPs have been forced out by DSL and cable, the companies are in a sort of ‘mutual detente with disorganized collusion’ mode of operation. That is, they are openly hostile to each other, but at some level they agree to keep rates close to equal, and cooperate on certain aspects of service.

It goes on to talk about caps:

"Now the companies, cable and telco, are complaining about the fact that when we all signed up to unlimited accounts, we actually thought they meant what they said. Amazing concept, that – taking something at face value. Now they want to place caps on us because we have had the temerity to actually use what we have been paying for."

The article on Ars that the blog references is here, "Opinion: Ever feel like cell carriers and ISPs don't like you?" Ars has another article about how we got to BW Caps:

"How did we get into this position? It's a result of cable ISPs essentially doing the equivalent of an airline overbooking a flight. But instead of getting bumped to the next available flight and being given a free roundtrip ticket anywhere in the lower 48, like airline passengers, cable customers get lower speeds and bandwidth caps. Although there's plenty of fine print about actual speed and performance from cable ISPs, they've historically marketed their services as fast and unlimited in scope."

There's an article per day about the caps; about truth in advertising; about how caps will stall the growth of broadband and the economy; and about how there just might be collusion between the cablecos and the ILECs. We need stronger government agency oversight (FTC, FCC, SEC).

Is that a Train Coming?

Dave Rusin, founder of American Fiber Systems, writes in his blog about the light at the end of the tunnel. (Thanks Jason for the nudge!) Rusin was President of Frontier, one of th early CLEC's (1994), so he knows a thing or 2 about the industry. Rusin thinks that DC and the FCC is a vortex of lobbyists and lawyers. We think alike. His other insight is close to my chant, Layer 1 or Layer 7 (own the app or own the network):

"Amongst a host of insights, the one I understood best was this: If you are going to be a long term, innovative, reliable competitor you need to be on your own fiber optic platform to succeed."

Rusin goes on to explain that VZ is now going after businesses with its FiOS offering -- and neither ISP nor CLEC can get access to it!

Rusin thinks that CLEC's won't be able to compete with FTTB (fiber-to-the-building) on copper. Rusin even berates fixed wireless providers as unable to compete with fiber. I think he's wrong. Here's why:

Let's leave out the top 25 cities. CLEC's never got to 15% market share even with UNE-P. Take a CO that has 40,000 lines (medium sized). If you get 400 customers off that CO within 8000 feet of the CO (which is just 1%) you are profitable. You can use not only Ethernet-over-copper, but fixed P2P wireless. (Orthogon and 3650 gear can be your friend if you know RF).
If you only acquired 200 customers at $300 ARPU you would still be doing okay - and that is 0.5% of the lines and Nuvox sized ARPU.

The key is to sell deep within your market. (Milk your own cows.) Expansion is great for Wall Street, but short term stock gains does not make for long term strategy (see Starbucks and Sharper Image).

Historically, CLEC's (all of them combined) did not account for more than 15% of any market, so the numbers still work in their favor. (In the 6 VZ cities for forbearance, it looked like te CLEc's had about 8% of the market). However, they have to stop the stupid stuff they have been doing for 12 years. CLEC's have had 12 years to use the TA96 to acquire a density of clients and convert to facilities, but as Rusin puts it: "If you decided to go wide rather than deep for 12 years in developing a competitive platform, that was a business choice not a government edict."

It isn't just CLEC's. Look at the VOIP Providers. Same thing. (And ITSP's should stop looking at the XO playbook. It hasn't worked for XO, so it likely won't work for you. Pick retail or wholesale and go full bore.)

It becomes about Selling Managed Services. Ma & Pa Bell are already there.

Sell DEEP! The ILEC's do. So does cable. If you are in a MTU (multi-tenant unit also referred to as office building), the second and third customer is cheap. The fourth is gravy.

That light at the end of the tunnel is an ILEC train that is going to wreck your day unless you follow what I have been preaching here for years or what Rusin writes: "I have been very clear why being ILEC indepedent is important over the years."

In The Dark

Last night my wife and I and another couple went Glow in the Dark golfing. For those of you who have playing "Golf" with me, you know that I stink and I lose quite a few balls per 9 holes, so when we only get 2 glow balls, I figured I would be finished by hole 3. Not so. One thing about not being able to see is that you only focus on what is in front of you. So just hit the ball as straight and as far as you can. Then do it again. You can't really see water hazards or anything but the glowing flag and some red boundary markers (made of glow sticks). With no distractions, I was able to hit better than I usually do, which is the lesson for today: remove the distractions and focus on what you are trying to do.

Oh, yeah. The other lesson is do not run in the dark because you can fall in a ditch and really mess up your knee.

Lessons from Ike's VOIP Research

Ike Elliott has surveyed about 10 VOIP Providers. (Many were invited but not many volunteered info). He has a chart detailing the QOS startegies here. Pure retail ITSP's in this list sell Internet bandwidth too - that helps to control the quality of service. The group of Hybrid Wholesale/Retail providers is the interesting group. As Ike explains here, "The main take-away from the chart is that all of the pure retail companies, led by CBeyond, are focused on selected cities or are focused regionally. That makes sense because it often takes a local sales presence for retail sales." The other take-away is that (except for Bandwidth.com which is a Level3 reseller), you have to choose between Wholesale or Retail because trying to do both is ineffective. It is 2 separate strategies. I know why they do it: to grow revenues and hit scale faster. But it rarely works out that way. Better to focus on one strategy and milk your own cows.

ISP-Planet has a review of yet another player, Alianza, that sells on features. Almost every VOIP Provider has a similar feature set. And since you can't tell the quality usually until after you are using the service, it comes down to price and sales. Without a sales force, it is a price driven sale - or you have some really good marketing tactics. As Alex Goldman writes, "It's tough to stand out if you're offering VoIP. You may have a good product, but so do many other companies."

ATT Closing CallVantage?

It seems like AT&T is going to be shuttering its VOIP offering, CallVantage, according to GigaOm and Tom Keating @ TMC. AT&T has told affiliates to stop marketing Call Vantage and start marketing DSL or U-Verse instead (via CJ.com, I think). Many think this doesn't bode well for Stand-Alone VoIP, but AT&T never pushed CallVantage. I use it. It is a good service that I started when it was AT&T, before SBC bought them. Last count I read was about 100,000 folks using it. The call quality is exceptional, but the RBOC's - VZ with VoiceWing and ATT with CV - don't mass market VOIP. Next year, the other VOIP Providers can fight over the 100K subs.

Arizona ISP sued by AG

"Simple.net mailed more than 195,000 solicitations to organizations in Oregon that appeared to be checks for $3.35 or less. Recipients deposited the checks believing that they were a refund or debt repayment. ... However, Oregon investigators say, those who cashed the checks were unwittingly subscribed to Simple.net Internet service costing $16.95 a month. [oregonlive]

8x8 gets Gateway Patent

8x8, parent of Packet8 VoIP, received another patent to its portfolio. This one is U.S. Patent No. 7,394,803 for "Distributed Local Telephony Gateway" - "The patent relates to Internet Protocol (IP) communication systems and, more particularly, to broadband telephony services having distributed local gateways. [earthtimes] This probably means more patent litigation for other VOIP Providers.

VoIP Provider Survey

Ike Elliott has a survey on the state of the VOIP Providers. A few people, including me, tried to line up VoIP Providers to supply the info. Many did not. The results are here.

Google's Web App Scanner

Google is giving away its web app scanner, Ratproxy.

"A semi-automated, largely passive web application security audit tool, optimized for an accurate and sensitive detection, and automatic annotation, of potential problems and security-relevant design patterns based on the observation of existing, user-initiated traffic in complex web 2.0 environments.
Detects and prioritizes broad classes of security problems, such as dynamic cross-site trust model considerations, script inclusion issues, content serving problems, insufficient XSRF and XSS defenses, and much more.
Ratproxy is currently believed to support Linux, FreeBSD, MacOS X, and Windows (Cygwin) environments."

Ratproxy

Managed Services are the Key

I've been saying Layer 1 or Layer 7 for a while. We talked about Managed Services at FISPA in ATL. What Is Managed Services? Phone+ has an article that answers that: "Managed services is proactive performance management of technology (IT, telephony, applications, etc.) assets on behalf of a customer on a subscription basis."

In the article, Do-it-Yourself MSP, one MSP advices:

"Figure out your sweet spot and define it,” he said, noting it’s OK to offer a broad set of services, but each needs to be defined. “I’ve seen several MSPs in my market fail. Each of them in hindsight has communicated that it was a focus problem." ... As customers become more familiar with the managed services delivery model, they will begin to demand more services fall under the subscription model, he said. He cautioned newbies not to take on too many services with limited demand."

Why would you want the Managed Services model? As stated in the article, Mastering Managed Services, (also in Phone+) "Most voice and data VARs are well aware of the imperative to transform their businesses from time-and-materials shops to managed service providers. The annuity revenue model is the obvious lure in an era of slimming hardware margins. Indeed, the managed services model can add value to VARs’ businesses beyond the next sale, but it’s also increasingly used as a competitive strategy for gaining account control in a converging marketplace."

ISP's like the recurring revenue model, but unfortunately the MSP model is labor intensive - skilled labor intensive. But it is a bout leverage. Leverage your understanding and passion for technology to help make other companies more productive. Ka-ching!

IPTV discussed

Over at isp-clec.com we are having a discussion about CLEC's getting into IPTV. (I know I touched on TV this week already). Fred Goldstein says that the opportunity lies in providing access to other video besides cable TV. Fred also talks about trying to do something to capitalize on the huge demand for downloaded video that costs ISP's money and choke their network. Fred makes good points, but I argue that TV is a waste of effort for ISP's. If you have to do it, resell a satellite service (and stop whining about single billing).

From what my cable clients tell me, the high ARPU clients are being poached by DirecTV's HDTV offering. Hard to out-perform that on scale and win them to your service.

Fred also talks about storing video, but the cableco's have already lost the Network DVR fight with Hollywood. No one was able to refute the high expense of just the set-top box. Then there is the copper plant. ADSL2+ is good to about 8000 feet from the CO. These folks probably already have cable, which makes the marketing expensive.

Now let's look at the numbers:

There are NOT that many CLEC's that have 5000 customers in one CO, the magic number to prevent the TV service from being a money pit. VZ only gets 15% penetration on FiOS. So to get 1000 TV subs you would have to have 6667 broadband subs. Since no CLEC has ever gotten as much as 15% of the market, you would need a CO with about 65,000 lines within 8000 feet. There are very few of those. Very few.

So how would TV work for ISP's?

Go the PCO route. Private Cable Operator. Chase the MDU, where you are the dominant provider. Cluster 4 or more 4 MDU projects of 250 or more units per MDU in the same city (preferably off the same CO). Now you have about 1000 subs and the DTV Head-end solution will make some sense and you can now look at the Business case.

Why everyone has to follow the Bell-heads like Lemmings is beyond me. Folks, you don't have their budget, their marketing muscle, their brand, or their captured customer base -- you have to capitalize on High Touch (high profit) services that they will never be good at.

The New CO

Great article in Telephony magazine about what the Next Gen Central Office will look like, what changes are taking place, and how the CO has a power bottleneck as well as a cooling bottleneck. Read here.

Developments at Ma Bell

Apparently subsidizing the iPhone isn't a clear strategy as the WSJ is reporting that ATT will be offering iPhones with no contract. "AT&T said the no-contract iPhones will sell for $599 or $699, depending on storage capacity, and will be available sometime "in the future." That's great for folks that are on T-Mobile. But "in the future" sounds like a ways off.

Ma Bell will drop DISH Network at year's end and just go with DirecTV. SBC used to sell DISH; BellSouth sold DTV. Now everyone will be selling DTV. The BizJournal notes some interesting points:

"Dish Network, founded by Charlie Ergen, is the nation's second largest, with nearly 14 million subscribers [behind DTV w/16M]. The company makes set-top boxes for AT&T's U-verse digital television sold in some areas over the company's broadband connection.
On June 12, AT&T told DISH Network to pay back $500 million plus interest in debt notes held by an AT&T subsidiary. It's not clear if that decision was connected to AT&T's negotiations about the terms of a new satellite TV partnership."

AARP versus Telcos

Florida AG, AARP Take Aim At Phone Service

TALLAHASSEE, FL - Attorney General Bill McCollum, Florida Public Counsel J.R. Kelly and AARP today filed comments with the Public Service Commission (PSC) objecting to the proposed abolishment of service quality rules for local phone companies, including Verizon, AT&T and Embarq.
"Phones often serve as lifelines, particularly for our senior citizens, and phone companies should be required to abide by these standards of service quality,” said McCollum. “If there is a problem with the quality of service being provided, the answer is certainly not lowering the bar or eliminating it altogether."
The document filed demonstrates that Verizon, Embarq and AT&T have repeatedly failed to comply with the service quality standards which they are seeking to abolish. Verizon and other companies argued last month that the service quality rules were no longer necessary because of competition in the industry.

Read the rest of the article here.

Is IPTV an Option?

DailyIPTV has a list of the Top 10 IPTV providers. DailyIPTV also notes this about providers:

""Right now, most of the IPTV offerings out there are really 'me-too' offerings that essentially replicate the cable broadcast model. This is completely understandable since delivering video isn’t a trivial task. However, AT&T’s U-Verse service, which just rolled out HD, is a unique and compelling service. Also, SureWest in CA, which was the first to roll out MPEG-4-based HD, delivers video over both ADSL2+ and FTTH, with VOD and integration with IM clients for messaging and Caller ID screen pops is [another] very intriguing service." It should be noted that while Verizon’s FiOS fiber-to-the-home offering is often referred to as true IPTV, this isn’t really the case since they’re using technology similar to that of regular cable companies."

I thought CavTel also provided TV but it must not be IPTV and it must be for a small community. Note that SureWest is an ILEC in California.

In the US, many MSO's are losing their best customers to satellite offerings because of limitations in cable plant. (For example, it is analig coax or th ehead-end is old). It costs millions to re-build the plant and at least half a million for the head-end. Add in set top boxes at $400 a pop and it is an expensive deal.

Here's some advice from Telephony online:

Be realistic about IPTV: Early rollouts of IPTV missed their targets. Providers need to be realistic about ARPU, profitability and take-up. As IPTV itself is unlikely to generate much, if any, margin, indirect benefits such as broadband price support and churn reduction are likely to be far more important than any direct cashflow benefits. IPTV providers also need to be realistic about which segments they can target--IPTV entrants are unlikely to churn pay-TV subscribers without premium content. Scale matters--many IPTV providers will not survive: IPTV is a scale game--both for acquiring content and for building out infrastructure such as video servers. A large broadband customer base must be a key starting point for IPTV scale.

Then you have the other competitor - not just cable or telco or DBS, but the one that scares the heck out of Big Cable: Internet Video. As networks push episodes online, even Tivo seems redundant. (Although, I still can't get Smallville episodes on the CW website.)

Video encoding for online delivery – keeping an eye on quality: Big changes are afoot in the broadcast business, a fault-line is appearing in the industry as content distribution pushes further online. Major announcements from large media companies backing online video channels and pushing premium ‘TV’ content out without DRM over the internet are shaking up the industry.

There are 5 shows that have IPTV components: CES, NAB, Broadband Properties Summit (every April), the NCTA Cable Show, the FTTH Council (Nashville this Sept.), and IPTV World Forum (July 22-23 in Chicago). One thing to note is how few offer TV over copper.

Some last comments on IPTV from TMC.

Vonage Debt Refi On Hold

Barron's reports that Vonage's attempt at re-financing its $256M in debt has been delayed. Vonage says that due diligence takes time in this uncertain market (or when the company is shaky as heck!). Vonage has a private investor willing to give it $215M in financing to help pay off $253M in convertible notes (?) due this December.