The Power of Cable

Peter : On Rad's Radar?
Peter
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

The Power of Cable

Agents and VARs want to sell cable - mainly due to demand from small business. The price points and the advertised speeds make cable attractive.

However, the cable guys really only want to sell direct. Period. Everything else is garnish.

At ITEXPO, I heard that a few master agents have had their contracts "re-adjusted" by Comcast and TWC. This means less quota and less points -- and probably less support, but that I can't be sure.

The really troubling thing I heard was that Comcast's GM in Texas wants to go to a buy rate for both carriers and agents. Both will need to mark it up and add value to the sale; yet the buy rate will also be what the direct salesforce retails it for! That's right.

Cable likes selling to CLECs a whole lot less than even Verizon does. There is story after story of direct sales reps going into a wholesale partners' accounts and undercutting the price.

The answer: You don't like it?! Build your own f**** network.

In December, I said that cable was not going to have an agent channel for long. The over/under is two more years -- three at the most.

The ILECs - C-Link, VZ and ATT - struggle to maintain a channel. That recurring commission line item drives the CFO crazy.

Comcast has reiterated that they don't want the Agents to just be salespeople, but should be "adding value" to the sale. (They decline to explain exactly what that means.) So now we will see what that means in Texas if the GM there gets his way.

So if Agents have to sell head-to-head against the direct sales force but with a higher price, how will that go?

Comcast and other cable guys are chasing the VAR market to build out the channel. VARs aren't like Agents, who accept the fact that telcos treat the channel like crap -- they don't like it, but they accept it - since every agent has been shafted by a carrier at least once. VARs aren't really used to that kind of treatment from vendors that call you a "Partner". Cisco, Microsoft, HP, Dell and IBM don't typically try to snake deals from their partners. That's changing a little bit now.

In addition, VARs don't really want to deal with carrier services. The long and uncertain install dates, porting numbers, and other issues that are not in the control of the VAR make the small amount of revenue from carrier services seem radioactive.

Why lose a $1500 per month IT customer over a $200 circuit???

One master told me that he can't believe that pricing even on business broadband has dropped again. He wants it to go up. Of course, when your commission is a percent of the bill, you want the pricing - and the market - to rise (not fall).

We'll see how this plays out.



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