February 2009 Archives

IBM

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has a study out about how Social networking has co-opted many minutes of traditional talking.

 

People are communicating more things to more people than ever before, and not just by phone anymore. Internet-enabled communication models are gaining audience, attention and market share at the expense of traditional telecommunication providers (Telcos). Can Telcos fight back and find new growth opportunities in this rapidly changing ecosystem? The challenge is not just in understanding the technology, but also the unfolding fundamental shifts in human communication behavior.

Facebook, SMS, twitter, LinkedIn, Ning, YouTube, Ustream, and all the rest of the social media strata are where people are communicating. IM/chat like Skype, Google Talk, Yahoo, and MSN also have taken some minutes out of the system.

If you look at usage of cell phone minutes on the youth, you will see very little talking but lots of texting and web access. (Maybe charging per minute caused that). The primary communication method is social networks not telephony.

Telcos are losing landlines, mainly to cellular replacement. Certainly, cableco bundles have taken some landlines, but studies show that in this economic mess folks choose the mobile phone over a static line. Add in the fact that the next generation doesn't eat up minutes means that long distance revenue will be dipping as well as landline counts.
 

This presents a problem for telcos because the content folks don't want to share the revenue, which in many cases they don't have. Twitter, Facebook and Hulu are all having a challenging time monetizing a rapidly growing platform.

People are communicating in new ways -- and none of these innovations came to you from Ma or Pa Bell. Surprised? I'm not.

The first SAAS vendor I remember seeing at Channel Partners was nGenX, a subsidiary  of Lightwave Group. nGenX was offering Microsoft Office on-demand as a white label product for agents to sell for commission.

Next up for agents and VARs is GreenAppx.

With branded SaaS marketplaces, telecom agents and VARs can help small to mid-size customers eliminate capital expenditures and licensing agreements. SMBs can access critical business applications such as Microsoft Hosted Exchange Server, BlackBerry Enterprise Server, GoodLink Mobile Email, McAfee Security, WebEx Conferencing, and IBM Data Back Up and Recovery. In addition to hosting and network infrastructure, GreenAppX manages all transactions, application licensing, and software updates.[thomasnet]

Lots of ways to add streams of income to your traditional telecom catalog. More agents should be selling data storage/back-up/email archiving, it's like AFLAC for your business.

Stanford International Bank is the other Madoff. While Madoff burned people to the tune of $50B in his Ponzi Scheme, Stanford wiped out $8B in its investors money. In its wake, it has erased the credit line of Reignmaker Communications. It is reported that Reignmaker laid off 19 of 25 employees. It looks like this Broadsoft based VoIP provider will be closing.

Reignmaker is an Atlanta based ITSP that purchased a CLEC with a Broadsoft switch. It back-ended into Tampa-based CommX, a wholesale Broadsoft ITSP. A good dose of its employees came from Cbeyond, down the street.

In a follow-up to this article, National Emergency Number Association (NENA) announces model legislation for Multi-Line Telephone Systems  (in MTUs, like hotels, offices, etc., where the internal PBX has to add 911 info to the call about what room or suite number).

"On Thursday, February 19, 2009, the Executive Board of the National Emergency Number Association (NENA) approved an updated version of model legislation designed to help states develop statutes and rules requiring sufficiently precise caller location information for 9-1-1 calls made using Multi-Line Telephone Systems (MLTS). The model legislation would ensure that 9-1-1 callers can be located when dialing from a business, shared tenant facility, hotel, or similar enterprise environment. Reflected in the language of the model legislation are technological advancements made in recent years that enable the implementation of Enhanced 9-1-1 (E9-1-1) MLTS capabilities without imposing undue burdens on MLTS manufacturers, providers, and operators.

Currently, there is no federal E9-1-1 requirement for MLTS, and only sixteen states have taken on the issue, each with substantively varied prescriptions to the problem. "It is NENA's mission to ensure that all Americans have the best access to 9-1-1 possible, regardless of where they live, work, or travel," said NENA Chief Executive Officer Brian Fontes. "This model legislation will provide critical guidance for state legislatures across the country to enact measures that will improve the safety of all Americans."

Although recent years have seen significant progress made towards improving 9-1-1 for most consumer telecommunications technologies, little attention has been paid by lawmakers to E9-1-1 for MLTS users. While most MLTS enable the digits "9-1-1" to be dialed and routed to a public safety answering point (PSAP), the vast majority of these systems only provide physical street addresses, not the more granular location information (e.g. building number, floor number, suite) needed by responders to know the actual location of emergencies occurring on academic or business campuses or in high-rise office buildings. This has left millions of Americans exposed to unnecessary risk should they be unaware of, or unable to convey, their exact location to 9-1-1 telecommunicators.

The model legislation was authored by NENA's MLTS Model Legislation Working Group, which brought together MLTS vendors and users, public safety experts, and telecommunications representatives to facilitate a cost-effective and technologically viable solution. "The Working Group has been active since 2000, when the original model legislation was developed, but recent technological advances necessitated the creation of an updated model," said Working Group Leader, and NENA Past President, Mary Boyd, ENP. "By taking into account industry standards; newly available E9-1-1 MLTS technical solutions for all devices, including VoIP; and increasingly affordable implementation options, the newly revised model legislation will serve as an actionable blueprint that states can use to better protect their citizens," added Boyd.

In addition to the Model Legislation, a companion document was developed highlighting location discovery strategies for VoIP telephones. This Technical Information Document supports the model legislation and educates both legislators and the MLTS administrators on the various techniques that can be deployed to solve the user mobility issue. "A key initiative of the Work Group was to assess industry standard, commonly available, and affordable technology for all devices, including VoIP. Significant advances have been made as recently as the last 12 months that easily solve location resolution behind an MLTS," said Mark Fletcher, ENP, Working Group Technical Subcommittee Chair.

The full text of the MLTS E9-1-1 Model Legislation and the companion Technical Information Document, as well as a list of existing state statutes, can be viewed on the NENA website at: http://www.nena.org/pages/ContentList.asp?CTID=41.

About the National Emergency Number Association:  NENA is The Voice of 9-1-1™. NENA promotes implementation and awareness of 9-1-1 as North America's universal emergency number. NENA is the leading professional non-profit organization dedicated solely to 9-1-1 emergency communications issues. NENA serves its nearly 7,000 members in 48 chapters across the U.S., Canada and Mexico through policy advocacy, establishment of technical and operational standards, certification programs and a broad spectrum of educational offerings. Find out more at www.nena.org.

Acting FCC chief Michael Copps celebrated the 75th anniversary of both the FCC and the Communications Act of 1934 that birthed the agency. In a speech, Copps said, "How do we take this 75 year old agency, charged with implementing our formative communications law, and make sure it is up to the challenges of the 21st century? Born in the world of primitive radio sets, raised on plain old telephone service, now trying to manage high-speed broadband and orbiting satellites, can we make it an agency for all seasons? I'm glad you're thinking about this."

After that Copps kind of digs at Martin's feral grasp on the communications and free flow of information. (In other words, there was none).

I do think it's time for our agency to take a good hard look at our mission. Indeed, I think every independent agency ought to be required to do this. I have always believed that our government's independent regulatory agencies were set up to serve the public interest. But many of them, my own included, have sometimes strayed-- strayed pretty far -- from that purpose. At the FCC -- and I single out no specific regime or individual -- our processes over time have become opaque rather than transparent. Too often we spend our days refereeing disputes between powerful interests, with consumers and other non-traditional stakeholders pretty much left outside the loop of discussion and decision. Even the public record is difficult for the public to access.
The new Administration's Open Government Initiative is music to my ears and offers a wonderful opportunity to make this happen. At this 75th Anniversary, we should be revisiting the vows and obligations we took back at the beginning. What I'm talking about today is not rocket science. To a large degree, it's just having our goals clear in our mind, and then creating the process and management to achieve them in an open and transparent way. Or, as my old boss, the legendary Fritz Hollings, used to say: "On the way through life make this your goal--keep your eye on the doughnut and not the hole."
"...the Commission has just been charged with a truly important job. With enactment of the Stimulus bill, we are called upon by Congress and our new President to develop a national strategy to get high-speed, opportunity-creating broadband out to all our citizens. This is a very big deal -- the Commission has seldom if ever had a greater summons to action.... How we do on this will have a lot to do with how we fare in future years -- both the country and the Commission." [at least He gets this.]
We must start thinking more rigorously -- and I mean all of us -- about the profound impact of so much of our communications moving to the Internet in the years ahead. How to keep that Internet open and dynamic is an important part of this dialogue. But so is how to ensure that as the Internet becomes our primary vehicle for communicating with one another, it protects the public interest and informs the civic dialogue that America depends upon for its democracy? That's a huge question."

Now here's where a niche really pays off. 

"Rivulet Communications, whose technology enables flawless HD medical video on the hospital IP network, has raised an $11.5 million round from ATA Ventures, Menlo Ventures, Performance Equity Management and Scorpion Capital Partners... The company won several patents for its technologies, which include its wide-area network Internet Protocol quality of service technology in 2008. ... Its technology helps high priority network traffic avoid bottlenecks, speeding real-time traffic and maintaining video quality. It can be used on existing networks."[TechJournal South]

Tele-Presence and Video Conferencing and HD Voice are services on the growth path, but certainly HD Medical Video is a specialization.

"SMB Nation is a community of over 35,000 small and medium business (SMB) technology consultants, channel partners, sponsors and resellers. With an impressive 10-year history serving as a trusted advisor and mentor to the SMB consulting and  reseller channel, SMB Nation has been able to consistently reinvent itself based upon changing market conditions." SMB Nation did a VoIP survey with NGT. 260 responded (results here).

These are the services they currently provide:

• Networking infrastructure (91.1%)
• Mobility sales, services, support (52.7%)
• VoIP-specific sales, services, support (44.2%)
• Telephony sales, services, and support (35.3%)
• Line of business applications (35.7%)
• Database development/programming/development (32.6%)
• Web hosting (27.5%)
• Host e-mail (26.7%)

These are the services they will add:

• VoIP sales, service, support (56.2%)
• Security (36.6%)
• Telephony sales, services, and support (28.1%)
• Web hosting, hosted services (25.5%)

It's interesting that Telecom Agents sell circuits and very few want to sell non-telecom services, but VAR's and MSP's are marching in to take over the Agent Arena.

CircleID takes a look at America's Broadband Score

"Leonard Waverman, the dean of the Haskayne School of Business at the University of Calgary, describe a measure he developed called the 'Connectivity Scorecard.' It's meant to compare countries on the extent that consumers, businesses and government put communication technology to economically productive use. Even after deducting the untold unproductive hours spent on Facebook and YouTube, the United States comes out on top..."

What's interesting to me is the comments. How no one can find the US Broadband score is funny. (Heard of Google much?) It isn't so much the score as what the score represents.

We have a few problems to fix:

(1) ISP Competition for one. Many places only have one choice for broadband. Many have two - cable or telco. Few have three. It makes download caps and Net Neutrality a hot button that true competition would eliminate. (And please don't give me that 3G is the third rail because guess who owns that - Ma and Pa Bell in the majority just like they own the Internet backbone and the PSTN structure in more than 70% of the country).

(2) A definition of broadband. Is it 256k one way as the FCC has defined it for years? Is it now the new FCC definition of 768k? Or is it 1M x 1M minimum? Or is it 100Mbps? This would certainly help.

(3) Deployment versus Penetration. "When you look at the 2008 ITIF Broadband Rankings report ...the U.S. ranked 15th among industrial nations at a composite score of 10.25. The U.S. is reported to have an average download speed of 4.9 Mbps, which is a far distant behind Japan's 63.6 Mbps. In addition, the report states that the US broadband penetration comes in at 0.57%." [source] Here's the detail: "Composite Score: Each nation's overall score is the sum of its standard deviation score for each of the three indicators: Household penetration or subscribers per household, average download speed in Mbps and price at the lowest monthly cost per Mbps." 

We may have "broadband" deployed in a large swath of America, but the speed is low compared to other countries. Because we are a suburban and rural country, it takes more infrastructure to hit everywhere with broadband, especially very high-speed Internet Access (greater than 3Mbps). And because most places hit are single family homes - we do live in suburban sprawl consisting of McMansions filled with Yuppies and 2.2 kids - it also affects our score at the ITIF.  According to a CWA study, the speed in the US is just over 2Mbps.

(4) Cost! We probably pay more per MB than any other G8 country. We get less speed and pay more for it. That hurts us. Surprisedly, in Wilson NC, the Muni fiber sells 100MB symmetric while TWCable and Embarq just gape at the speed and price. Well, not gape, so much as sue that it's unfair that a city would provide services it refuses to.

So we have cost, penetration, subscriber per household (density), and speed. Can't do much about density, but you can improve speed and cost. Also, there is a Digital Divide in America. Poorer families do not have computers, so do not have a need (or a budget) to buy broadband. It poses a problem that funding broadband for libraries and schools is supposed to throw a rope at. The Pew Report reflects this chasm.

BTW, the Connectivity Scorecard study has been analyzed here and by my favorite snarky blog, TechDirt.

If you are a channel agent or a VAR or a service provider looking for a VoIP Provider to be your VoIP provider, there are 6 questions to think about:

1. Do you want to White Label, wholesale or a retail package?
2. Will you be serving consumers or businesses?
3. Will it be POTS replacement or Hosted PBX?
4. Will you be selling PBX, phones and other hardware?
5. Do you want to do Tier 1 support?
6. How will you sell it? (Or do you have a sales team?)

While many ITSP's (Internet Telephony Service Providers) can do all of it - white label, wholesale, retail, hosted PBX, analog replacement - it is difficult for each to excel at all of that. And you don't want to get half way down the road to have your vendor shift gears and the wheels fall off.

Support is key because "the blinking light" syndrome means that you will be getting calls about "how do I do that?" or "why can't I dial long distance?" So it's good to define responsibilities (and what is Tier 1 support).

Why know your market? Because most ITSP's have not designed an offering to compete against Vonage, Magic Jack or the cable companies. (And besides B2B is way more profitable).

The last question is real: How will you sell it? If you have 100 clients, only 10-20% are going to convert without some type of sales effort. And that doesn't amount to many lines for all of the effort that both you and your vendor will be expending to get this partnership moving forward.

I have seen far too many ITSP's bring on numerous agents/resellers/VAR's/partners, only to see lots of start up activity that never converts to enough sales activity to account for the effort.

Should an agent's commission get dinged when the carrier issues a credit over an outage or SLA issue? I have two cases of this happening right now.

In good faith, I sold a circuit that the carrier gave me permission to sell. But on a performance issue - months post-sale - the carriers ding my commission when they have to issue a credit for SLA violations.

Do they do this to their direct people? Unlikely.

Here's the other issue: because these sales were made through a Master Agent, I don't even know how the contract reads between the Master Agency and the Carrier. Nor can I take the carrier to court without taking the Master Agency to court (and destroying that relationship along with the revenue stream).

It was bad enough when I had to act as collections for carriers. If the carrier  wasn't getting paid by the customer, I would get dinged and then pinged to go collect the money. The carriers have a collections process and departments for this. It just seems like more and more is heaped on the indirect agent with less and less money. (Let's not even talk about the risk increasing as reward decreases).

Is anyone else having this issue? Please let me know.

It's amazing the news feed you can get from Twitter.

Broadband Stimulus Plan: High-Speed Access coming to Rural America

Ask our CIO about our UC implementation at Aspect on a Frost & Sullivan webinar tomorrow:

Telefonica, Microsoft Offer Windows Live Services to Latin America

AboveNet is connecting 4 Telx facilities in NY/NJ

Recession is slowing the Death of Dial-Up.

RackSpace is using the Green label to market its hosting service. (IPO's will do that to you).

Apparently, BPL is still a viable option. Go figure.

This is all in about an hour. There's a lot going on. How are you keeping up with the Industry?

L3 released 4Q08 numbers last week. Remember at Christmas, rumors swirled about a possible bankruptcy. Now it rings up a profit.

Level 3 Communications has recorded its first quarterly profit in six years for the fourth quarter of 2008. The operator reported a $44M profit for the three months to 31 December; although it also reported lower revenue at $1.05 billion for the quarter than it did for the same period in 2007. Level 3 had a $290M net loss for the full year but this was considerably less than the $1.1B loss incurred in 2007. Full year 2008 revenue was $4.3B [about the same as 2007][.telegeographyg]

Even when you hit some numbers, The Street kicks your ass. But when you say, "For 2009, the company said it expects continued revenue weakness over the short term but is also working to cut costs" in Forbes, your stock is taking a hit.

Full disclosure: I rep for 20+ carriers and Level3 happens to be my biggest carrier. Pricing pressures are driving rates down on everything from Transit to Transport. Not everywhere mind you, but in the top 10 Metro areas, where L3 competes with Cogent, HE, and NTT/Verio, it is pressured to lower rates.

XO competes with it in many markets because XO has IRU's on L3's cable, so about 60% of where L3 is, there's XO. Surprisedly, pricing pressure is also coming from Qwest on longhaul routes, especially on Waves. (I rep for XO and Qwest as well, but not Cogent, HE or Verio). But the real competition comes from its own Resellers, like WBS Connect. Lately, Scott's company has gone underwater to take a deal from me, I mean, from L3 directly. I don't know where all this ends but I do expect HE, Cogent, WBS and others to start seeing more bad debt and late payments. The people who fight for price the most are also usually (not always) the ones who pay late. We'll keep watching.

Time Warner has received approval from the FCC to spin off TW Cable.

"The separation of Time Warner Cable Inc. gets Time Warner out of the media distribution business altogether, something investors had been clamoring for. The company announced its decision to split up last month and said Wednesday that the boards of the two companies had agreed to financial terms.

Time Warner Cable is the second-largest cable provider in the country after Comcast Corp. with about 13.3 million video subscribers. It has been a public company for more than a year, but Time Warner had held on to an 84 percent stake. [CBS]

Here's something you may not have seen:

Time Warner owns 85 percent of Time Warner Cable shares. Just before separation, Time Warner Cable plans to pay out a dividend of $10.27 per share, which will result in $9.25 billion going to the parent company. [BusinessWeek]

Nuvox says that they are all set for this economy. It looks like they have $30M in the bank, re-financed their debt, and are looking for a possible acquisition.

Nuvox is now offering Google Apps to its customers.

NuVox business customers can now access Google's popular Web applications on their own domain such as Google Docs to create, share, and collaborate on documents, presentations, and spreadsheets in real-time and can even gather a variety of business information in one place from Google Sites which brings forth videos, calendars, presentations, attachments, and text -- and easily share it for viewing or editing with teams or as a company intranet. NuVox's customers can also get access to Gmail with up to 25GB of storage per user, mail search tools, and integrated chat. Gmail also interfaces seamlessly with popular email clients. And also Google Calendar, which helps to coordinate meetings and company events with sharable calendars that work with your company's directory. Schedule meetings, manage conference rooms, and receive "large company" services for small to medium enterprises. Google videos for business and Google Message Filtering are also part of the deal which NuVox's customers can take advantage of.

It seems that when they mention Google Apps comes with the T1 service, Nuvox gets more appointments.

"The power of Google standing behind email and other essential applications gives our customers a bold edge in the marketplace. Additionally, this is a major advance in NuVox's strategy of offering innovative managed services that are not currently available through other providers." [TMCnet]

Nuvox is a Sylantro shop that is now making a push into SIP trunking, but I just don't see why. Nuvox is one of the most inexpensive CLEC's, selling T1's in many markets for sub-$400. I don't see where its customers would migrate to SIP trunking as a cost savings. As with any SIP trunk, interoperability with the PBX is essential.

"NuVox SIP Trunking is compatible with a variety of premise-based IP-PBX systems including Cisco, Avaya, Ingate, and Digium to date." [TMCnet]

If you are a carrier or a Master Agent, do you need more agents or do you need to give a lift to the ones you have?

There's a sales management theorem that when you use Pareto's Principle, you should spend you time with the Top 20% of your sales force not the bottom 20%. Why? Because the people bringing 80% of your sales are the ones you want to keep happy. Also, the more efficient and less bumpy you can make the sales process for them, the better for all the sales team, but especially the top dogs.

If you have a bunch of agents who signed up, what are you doing with them? Is your Channel Manager talking with them? What's he saying? The more you know about their business, the bigger the opportunity for you to actually work together.

Knowing the goals and strategy of your agents can help you target training, leads, case studies, white papers, and tips to them. The more relevant, the better.

Right now, I would be looking to add value to my agent channel. How?

1. Seminar with a tax specialist right now.
2. Seminar with a Financial Planner about IRA and the market
3. Seminar with a sales trainer for improvement in Consultative Selling

What? None of this has to do with telecom, you say? No kidding. But it shows that you value them as business people and want them to be successful. Sure. You could give them more webinars on MPLS or whatever the new acronymn is for cloud-based WAN connections, but are you really adding value? Do you know the Kawasaki 10-20-30 Rule? Do you survey your channel anonymously to get feedback on any training you give -

• one week later what do they remember;
• was it valuable time spent;
• what can they directly apply;
• any clients in the database that might be a fit now?
• do you know how to pitch the service/product?
• do you know who we target? and why?
• have you looked at your notes since the call?
• is working with you "easy & enjoyable"?

A couple of years ago, one carrier asked me what they could do to make working with them easier. Since I am rather direct, I answered explaining about the poor follow up. Sadly, it was never addressed. If you are going to drop the coin on a channel, don't set it up for failure.

As we head into Channel Partners Expo in Vegas, carriers and master agents will be looking for new agents and visiting with old ones.

• What are you specifically looking for in your next agent?
• What questions will I ask a prospective agent?
• Are we a quoting machine or lowest priced carrier?
• Does the agent already have a carrier like us? If so, why is he looking?

And I know some of you are thinking, "We just want to sign up agents!" Sure, but it isn't about numbers. It's about Enrolling partners into your Program." (or maybe it is just a Numbers Game - lots of agents, thousands of quotes, hope for the best, why aren't they selling my stuff?).

Right now, wholesale VoIP providers are looking for me to help them train their customers to sell more SIP trunking and Hosted PBX. They want their client ITSP's to be more successful. If you are a VOIP company and you have 75+ partners, is that a successful channel? Not unless 15 of those partners are selling a deal every week.

I'm not saying don't add new agents. I'm saying look at your current agents and figure out how to make them more successful so that they can create more revenue for you. It is a partnership after all.