After spending much of 2H09 campaigning for ILEC Forbearance because he claims that the CLEC model has failed in the US, American Fiber Systems' Dave Rusin is interviewed by TMC's Rich Tehrani (video).
My problem with Dave is that he acts like he is CEO of a major telecom company. But according to Inc., AFS is only a $40M company with about 150 employees. It's a fiber only company. No voice. Transport and re-sold IP. No copper. Nothing complicated at all. (He sticks to his knitting, which is good). It's a high-asset, large CAPEX network operation, meaning it costs a lot to get a customer lit with fiber, long ROI, low cash flow, but fiber is an asset once trenched (which is what he often blogs about). Fiber is the diet of telecom kings. (pun intended)
AFS is more like Looking Glass, Progress Telecom, and OnFiber - all companies that were swallowed up a couple of years ago. It is nothing like his first company Frontier, which has more in common with PAETEC than just the city of Rochester.
AFS has network in 9 cities - Atlanta, Boise, Cleveland, Kansas City, Minneapolis, Nashville, Reno, Salt Lake City and Vegas. A press release states, "AFS has deployed over 90,000 miles of high-capacity, high-bandwidth metropolitan fiber optic cable since 2000....AFS has over 400 capacity enabled on-net buildings." That's 44 buildings and 10,000 route miles per metro. Many of the lit buildings are Central Offices and data centers. So I am guessing that AFS has about 500 customers.
In 2006, AFS received $25M in financing. That's $25M to get to $40M in revenue. I told you it was capital intensive. But the claim is that "AFS' unique metropolitan fiber optic network footprint supports an addressable market tele-density of over $9 billion in annualized telecommunications services." It's a $9B market and you have $40M of it? And you pick on Paetec and XO? That's like RC Cola debunking Dr. Pepper.
Rusin states (in the video) that he prices below the ILEC rates. From my experience that isn't the case, but if the plan is to price below the ILEC, then how is your marketing and sales approach different than PAETEC? That isn't selling on the value of being a focused, single minded network operator; it's taking orders on price.
After that interview, I have to wonder (again) what the campaign for forbearance is all about. Two thoughts: it is messing up his capital market and AFS needs capital to grow and add buildings to its network OR AFS is looking for an exit strategy (i.e., PR to get bought).
All in all, I do like reading his blog because it usually makes me write something. Thanks, Dave!