September 2008 Archives

In grass roots fashion, Pandora, the online music genome project, urged its users (like me) to contact Congress about extending the royalty deadline. The bill passed the House. "Pandora and other Web-based radio services have been negotiating with music-industry groups for more than a year now, hoping to agree on a workable royalty structure before the existing structure bankrupted webcasters." [Dallas Morning News]  Who was the biggest opponent of the bill? NAB. Go figure!

"The leaders of three of Australia's largest ISP's have declared the Net neutrality debate as solely a U.S. problem--and further, that the nation that pioneered the Internet might want to study the Australian market for clues as to how to solve the dilemma..... "The (Net neutrality) problem isn't about running out of capacity. It's a business model that's about to explode due to stress." [CNET]

Basically they are saying that someone has to pay for the plumbing, which is exactly what Verizon's Ivan and AT&T's CEO were saying last year (but a lot less diplomatically). As prices start to decline for bundles, DSL, and wholesale IP (down to under $10 per MB), the business models are having a problem catching up. Consumers are using the Internet more, especially for entertainment - whether that means video, music, streaming, or what have you. All of that is taxing the US ISP broadband network. Cablecos want to do preferential network management and the FCC says no. Now there are caps.

Here's where I differ. We in the US pay more than Korea, Japan or France for broadband - and get less of it. (2007 data here or directly from OECD). How come these telcos don't have network issues? 

Here's the problem with caps: No one understands what they mean -- And the ISP's are still advertising it as Unlimited! You can't say Unlimited and then have a cap. That's dishonest.  

People are encouraged to use the web. It's the communications medium - email, VoIP, IM/chat. Companies would prefer to support you via the Internet - web, IM/chat, email or forums. The average page size is over 1MB though. Add interlaced videos, pop-ups, flash intros, animated banners, and the like makes for heavy use just with surfing the web. People will switch back to phone use for support, which will tax the corporations to hire more bodies. It will also tax the cellular network as more folks go all cellular.

How about Apple TV, TiVo, and iTunes automatically downloading podcasts and shows in the background? Or Microsoft updates? Those are 300MB a pop at times. If you have more than one PC, that's a GB per update.

In these tough economic times, families getting hit with overage charges will have problems - as will the ISP's with bad debt collection.

I don't think consumers want something for free. I think consumers want what we pay for - and what is advertised to us.

Jon Arnold makes a point: "Voice is a double-edged sword for service providers - most of their businesses are built around it, but with the advent of VoIP, it's become a commodity, and in many cases, a race to zero."

One point I make is that voice is just one app that we sell. Voice and email together are the key killer apps. But why isn't VoIP making more inroads?

I talk to many VoIP Providers and few are anywhere near where they want their numbers to be. And they are in a quandary to figure out how to increase sales. 

One reason is that their isn't really a problem to fix for some people. Landlines are declining for consumers as people switch to cellular only, but not many businesses have gone all cellular. (Plus you still need to fax -- and VoIP has not solved that issue for the most part).

Cable is making progress based on selling bundles to consumers. We will soon see how they do selling digital phone service to small business. Notice that MSO's do not mention VoIP?

I think the other reason is that it isn't a transactional sale. To sell Hosted PBX is a long sales cycle. Selling SIP trunking is easier (as a PRI replacement), but it is declining ARPU. To an agent that means less commission. To the carrier, it is less revenue (or new revenue).  So what agent set wants to spend the 7 contacts to sell 7 handsets and Hosted PBX to a small business for less than $400 in billing to see $40 per month?  

When you are basically offering landline replacement, it is easier for the agents to sell landlines (and get paid more).

Jon Arnold also mentions that some VoIP Providers are morphing - like Jajah and Mobivox - to incorporate VoIP into a tool.  Another example would be FreedomVoice with their Newber app.

The problem will still be transitioning the sales force (read channel agents) from a transactional model to a Trusted Advisor or Solution Selling model. To do that, agents would need to make points on the hardware and the install as well as the monthly billing. The Channel isn't ready, but some companies - like Level3, XO, and Adtran - are working on it. (And so will the TCA in 2009).

"Global Wireless Penetration to Hit 80% in 2013, Says Portio Research" [via teleclick]  If all the growth will be in Africa, China, and India, what does that mean for European and US carriers? Cellular penetration is now more than 50%.

Looking at the ARPU stat: "Average Revenue Per User (ARPU) declines to $15.80 in 2013, down from $23.20 in 2005." With debt piling up from building out 3G and now 4G networks, how do you pay it back with declining ARPU? As more folks use the network (and use more of it), upgrades are needed to meet capacity demand, including in tower backhaul. Not to mention that the cellular folks have to pay inter-carrier comp for dropping traffic on the ILEC networks. I just don't know how this will work out, specifically for the US Cellcos. 

VZW will be adding debt if (when) it buys Alltel. Add in LTE roll-outs as well as FiOS construction, where does all this money come from? (DSL adds are down).

Growth is not the end all. ARPU and profit (earnings) are. (According to Dan Caruso, the end all is cash flow).

The first presidential debate was streamed live, which just shows you that the Internet is becoming a mainstream news and entertainment outlet. YouTube has channels for both candidates. Both parties are working the websites, forums, "social networks", etc. to get the message out and spread the word.

All of this to hit the Undecideds, because the people that HAVE decided who to vote for will not be changing their minds. All persuasion is targeted at the Undecided.

Following the first debate, T. Boone Pickens was having a web event about his Energy Plan for America. The PickensPlan website was clogged 15 minutes after the debate ended. Are people engaged about the issues facing America right now?

I think in 4 years the Internet will be even more important for politicians. I caveat that with the fact that metered broadband may affect that since people won't be streaming video if they have to pay for it. They'll watch TV.

Jazinga launched its entry into the SMB PBX space after winning the Best of Show Award at Internet Telephony Conference & EXPO.  Jazinga's box is about the size of a D-Link router, but is more that a wireless access point and QOS router. It is a full fledged, SIP-capable  IP-PBX that can use IP Phones or Plain old RJ11 phones. (You know those ugly ones on your desk now).

One big selling point is the easy configuration, which comes from a consumer focus that means you don't need an IT gal or a PBX guy to set it up or manage it. Jazinga claims that the DIY set-up time is about 10 minutes after you plug your IP or PSTN phones in.

It's a space-saver too. Router and wireless access point rolled into the PBX. (The router even prioritizes voice traffic).  Other features include an auto-attendant, voice mail, conferencing, call forwarding, on-hold music - all for 20 or less users. The Jazinga system is available directly from the company and its channel partners for a $1,095.

As businesses increasingly rely on technology to store and maintain data, including customer records, the risk of identity theft also is increasing. The Federal Trade Commission ("FTC"), together with federal banking regulatory agencies and the National Credit Union Administration, has adopted new regulations intended to combat identity theft. Known as the Red Flag Rules, these new regulations require financial institutions and creditors to develop and implement a written identity theft prevention program to identify and combat identity theft in connection with new and existing customer accounts.

If you are an operator that provides service in advance of payment, then your company is a "creditor" because your company regularly extends, renews or continues credit or defers payment for goods or services. The Red Flag Rules apply to each "covered account," which is a customer account involving multiple payments or transactions for which there is a foreseeable risk of identity theft. By contrast, a single, non-continuing transaction, where no ongoing relationship exists, is not a covered account. The Red Flag Rules may also apply to some of your business customers.

All companies subject to the Red Flag Rules are required to implement a written customer protection program by November 1, 2008. This program must be designed to detect a "red flag", which is a pattern, practice or specific activity that indicates the possible existence of identity theft. The FTC has identified five categories of Red Flags and provided a list of examples of the types of red flags that fall under each category. If you are providing interconnected voice or VoIP services, the Red Flag compliance program can be combined with your CPNI program required by the Federal Communications Commission's rules.

The customer protection program must include policies and procedures for: (i) detecting warning signs or "Red Flags" of identify theft, (ii) responding to any such Red Flags in a manner that will prevent or mitigate the identify theft, and (iii) updating the Program. The customer protection program must be managed by the Board of Directors or senior employees of the company if there is no Board of Directors. Also, the customer protection program must provide for staff training and oversight of your company's service providers.

Thank to Attorney Stephen E. Coran of Rini Coran, PC for providing this info.

I'll be in Ft. Lauderdale on Oct. 21 Oct. 23 to keynote a partner luncheon for ADTRAN and XO. The content is based on where the indirect channel is heading in the next couple of years and what the value proposition is for both kinds of resellers - telecom agents and hardware VAR's. How many times will I say Converged? XO is giving every attendee a copy of my book, SELLECOM.

 Jeff Dworkin, Enterprise Segment Manager at Dialogic, sat down with me at IT Expo West to talk about Dialogic's re-focus on the channel. There are two groups that Dialogic is reaching out to: the system integrators and the development community.

Dialogic is launching a new Reseller Program in January 2009, which they will build a community around (in the social media sense with blogs). I guess you could say that the partner event on Oct. 20-21, 2008 at The Hotel Coronado near San Diego will be the start of the launch. The company will use the event to explain its strategy going forward including its acquisition of  NMS; its video series;  and how ISV's and application developers can work with Dialogic.

A final note: Dialogic is holding a tele-seminar: Reliable Fax over your VoIP Network on Sept. 30 at 2 PM Eastern.

I don't know how many of you are on LinkedIn or Facebook but it has been a strange couple of weeks. Before I left for IT Expo West, I was getting duplicate invites from several people that I did not know. The unusual part was the duplicates. So I replied to each invite asking for information about what list my email address was on. No reply from the 7 or so folks. Flying back from LA, it's a week later, still no reply. Why invite me to your network, if you don't use it or check it?

Also, LinkedIn has started allowing anyone to create a group. And they have. 494 groups when you search telecom. Ridiculous. That's like buying a new screwdriver and hammer at Sears each time you assemble Saunders furniture. Use the tools that are there and stop creating excess noise.

It would be great if one invite would say something like: "Peter, I joined GotchaNetworks. The discussion about LTE was great and I have discovered one or two prospects." Then I can understand the invite. But the canned invite because every time someone joins a group or network they upload the whole contact list is patently absurd.  And another lazy thing is the newsletter. You join networks and people add you to their newsletter. It would be fine if there was any value to these "communications" but they come off as marketing fluff. Tell me what you are up to. What topic are you following or finding interest in (or scaring you - no politics or religion please). How about what you get from the network we are both in?

While this is some ranting, the lesson is about Marketing and Persuasion. If you want people to read your stuff, to not think that you are just interrupting them like an email tele-marketer, Respect their time. How to do that? Give value. Think about the message you are sending.

Here's something to do: surf over to Sprint.com and try to find any wireline services. After 5 minutes of searching Business Services, navigation takes you to Nextel.com for Sprint's MPLS offering. On that page, you can find info about MPLS, VPN, IP Convergence, and Internet Access. Yesterday, Sprint gave a presentation to re-affirm to agents that Sprint was still in the wireline game. Of course, Sprint still has a robust backbone, it is what the cellular network runs on. It is also the backbone for Sprint's MSO partners for voice termination. The problem I see (that I expressed to the Sprint team present) is that during a 45 minute presentation about Wireline, 20 minutes of it was about Wireless Convergence, so the message that Sprint is a Wireline company is not very clear. And if you can't convince the agent, how do you convince Enterprise CIO's who have been trouble choosing Sprint for WAN options due to its lack of focus on wireline and its shaking financial situation. It's an uphill road for Sprint.

In 2007, Cisco integrated Jabber components into its conferencing platform. Today, Cisco buys Jabber, "an open-source IM and presence protocol used by Google Talk and Gizmo, for an undisclosed sum".  On our panel at IT Expo, The Role of Apps in VoIP, we talked about Gen Y not liking to talk on the phone. My conclusion is that you will need to incorporate XMPP and XML to enable chat, instant messaging, SMS messaging to IP phone - all to communicate with employees, customers, vendors - without talking on a phone.

Thomas Howe has been wandering around IT Expo. Last night he won the Broadsoft Xtended Voice Mashup Contest with Disaster Dispatcher, "a voice mashup that integrates Twitter, BroadWorks and RSS feeds to provide a one-window communications tool for emergency operators. By keeping all data in one window, emergency personnel can analyze the collection of information after the emergency to optimize response procedures."  Congrats, Thomas!

When I wrote about peering breaking down back in April,  Dan Golding at Tier1 gave me a beat down in his newsletter. I chose not to respond at the time. Ars points us to a white paper on the Art of Peering written by Mr. Norton of Equinix. Dan Caruso reminded me to mention it.

At Andy's wine dinner at Roy's last night, the first wine was a 1999 Pinot Gris that was Excellent! And the first Pinot Noir (2001 Siltstone Oregon Pinot Noir from Oregon) was very good. Even the chardonnay was nice (and I am not a Chard guy).

My panel this morning with Unity Business Networks, Telesphere Networks, and Aptela had a full room as we discussed deploying hosted PBX. The pitfalls and pain of the deployment. The stickiness too.