On Rad's Radar? - bandwidth Archives

Some Interesting Reads

2013-03-13T13:58:17Z

Zayo CEO Dan Caruso wrote a good blog titled "Is Bandwidth Production Lucrative?". In the wake of Jim Crowe stepping down at Level3, Caruso's analysis of the fiber players in an interesting read.

Personally, I think these CEOs - Crowe, Hesse, and others - have to take more responsibility for revenue, integration, value and culture. The role of CEO is more than just setting some ambiguous vision that your reports then have to crystallize and execute on.

Best quote from Mobile World Congress:

"Openness is not something to be afraid of. There are lots of business models available. But openness is also about being open to innovate." - Jolla CEO Marc Dillion (launched Sailfish at MWC)

FCC and FTC gave the green light for T-Mobile to merge with MetroPCS. To VZW and ATT, this is a yawner. To the consumer, it will just eliminate one of the all-you-can-eat players.

This news comes as Gary Kim writes about the spectrum crunch that never came. Please note that all of the Top 5 cellcos still have a bunch of spectrum that they have not deployed yet. It bears repeating: there is plenty of spectrum that they have not deployed yet! (Despite what Hesse spouts to the press. He likes being in the spotlight, which is fine, if someone else was running Sprint.)

Susan Crawford wrote an article about the lack of wireless competition. Every flavor of broadband - terrestrial or wireless - has clear winners and losers, but mostly losers, who we call customers.

I have beat this drum before but all the value in the US economy is in knowledge and innovation -- it is the Internet Economy. Stifling that due to profits for a few companies is not going to make the US competitive in a global race.

Nice blog about small business, Obamacare and the opportunity for channel partners.

In SAAS, the secret sauce is data integration - which fails almost 20% of the time!

Predictions for 2013

2012-12-19T19:15:00Z

CenturyLink Biz has an ebook out with predictions for 2013 and beyond. M2M, mobility, cloud - all just mind blowing stuff . It's prediction time obviously. Let me say that 2013 can go a couple of ways - DC gets its collective act together to improve the financial situation or it doesn't. The economy will swing with either path - good or bad. We have already seen layoffs and threats of more. The only positive I see is bankers actually being penalize for fraud. That said what is in store for 2013?

Well, the FCC's pace for any case is slow and slower, so they will likely not get to the copper clipping and IP transition until 3Q2013 at the earliest. meanwhile, CLEC's have to be vigilante to document cases of copper clipping, because all the money that they - Integra, Megapath, TelePacific, XO, Windstream - have invested in EoC doesn't work without said copper. I think they will be fine until 2014 on this.

That said, CLEC's have to accelerate their plans for OTT services like cloud and Managed IT. When the copper plant disappears, wholesale (from fiber providers and cablecos) will get expensive. The money will be in Layer 7. I have often said that it was going to be Layer 1 or Layer 7. Without a network that you own, it will be a fight for apps and services. Everything will look like Office 365 - where 42,000 Microsoft partners are selling it for very little margin.

Here's the thing: more businesses are moving to the cloud for so many reasons - mobility just being one of them. Some CLEC's, VARs and even Agents will migrate to a cloud services brokerage model. That will work for slinging Hosted Exchange, SharePoint, CRM, simple backup, even VPS. Network will become a separate sale and negotiation.

I'm still shocked that no one has rolled out vertically based integrated bundles yet.

So mobility will still be huge in 2013, but with the new shared data plans, the monthly bill will be increasing, so businesses (and consumers) will be looking for alternatives. Wi-fi will be significant. When you add in mobile data caps and consumer cable caps - and metering - there will be a net effect on cloud services and OTT services.

When you examine the backlash yesterday on the Instagram privacy gaff (right after Facebook finished acquiring them for $715M), you have to wonder how much longer the online phenomenon continues. Privacy is non-existent. You have to be off-the-grid and paying with cash to be beyond corporate and government spying. I think we will see a little more backlash in 2013 - enough that FB and other companies see a dip in usage and corresponding advertising sales. Have FB and twitter peaked?

The companies to watch in 2013:

RIM and Alcatel because they are re-inventing;
Avaya because of its crushing debt;
Bright House due to its Telovations acquisition and to see if it is the first cableco to chase business outside of its region;
8x8 and similar OTT Hosted PBX players like FreedomIQ;
the Cloud Communications Alliance, especially the members who have not been acquired yet. If Hosted PBX doesn't explode in 2013, it never will;
Sprint because Clearwire+DISH+Softbank = a big ugly mess with Hesse;
Verizon but specifically its OTT hosted PBX service, VCE;
Dell as it continues its shift to cloud services from hardware;
Tech Data - between TDmobility and the Microcorp deal - 2013 will be telling;
AirWatch since MDM is huge and they are being sued;
Master Agencies that have to figure out relevancy in 2013.

For Agents and VARs, 2013 is the year they have to put a plan together. No more waiting. Too many VAR's are already jumping on the telecom/network bandwagon and not nearly enough Agents are jumping into the Managed Services and Cloud space. For Agents, 2 resolutions for 2013 would be (1) partner with a VAR or two; and (2) cross-sell services to grab more of the total wallet share of your customers. Look to revenue per customer and lifetime value of each customer as the most important metrics. (Mainly because they are.)

For VAR's, they have seen some big changes from Microsoft - Small Business Server's end of life as well as the way Office 365 was sold. VAR's also witnessed CLEC's - like Cbeyond and EarthLink - make a big splash in launching managed services and cloud offerings. In 2013, VARs will need network/telecom to make up for the revenue dips. Locally in Tampa, we have seen some Microsoft partners go to programming and integration services in place of the old model of SBS and Exchange. For all of cloud adoption, Integration is the key to any business process outcomes. There aren't nearly enough programmers to do all the necessary integration.

In the Google world, there are companies making money supporting and integrating Google Apps. Backupify, Batchbook, Insightly are just 3 companies that integrate with Google Apps for CRM and backup. As this ecosystem becomes more complete, Microcorp's deal with NeoNova could prove brilliant.

It is this type of package or bundle that most businesses want. Do they want stand-alone Hosted Exchange? Notsomuch. They want a complete package of inter-working software - the Hosted PBX integrated with Outlook and the browser - like they have on their smartphone!! It confuses me that the smartphone is more integrated than a laptop, Mac or desktop.

They want their CRM to integrate with all of it too. If Xobni can pull in all that social data, why can't a plug-in for CRM?

It's this complete solution that is needed. No idea what company will roll it out first or if it will be in 2013.

Cloudy Math

2012-12-11T03:10:14Z

There is a lot of talk about the big money that Agents and VAR's can make if they just switch over to sell Managed Services and Cloud Services. Here are some facts about cloud.

M5 had the highest ARPU (average invoice per customer) when ShoreTel bought them - at $2000. Most other cloud communications providers hint at lower ARPU - maybe around $1000 per customer. However, 8x8 and Cbeyond are public and their cloud ARPU sits at between $200 and $250.

When you examine the "cloud services" of many carriers, it is just Hosted Exchange, Sharepoint and maybe some backup. That's $9 + $10 + $20 = $39 per user per month. Add in a Hosted PBX seat at $30 and you are now at $69 per month. For 20 employees, that's not a bad billing invoice for Agents, but it is also an unlikely sale. What small business will pay $1380 per month for phone and email? A PRI at $550 plus maybe $100 for the PBX lease and $50 per YEAR for Google has you covered. Add in some Dropbox and Bingo!

This isn't to discourage you. It's to put a pin in the hype balloon, which is starting to annoy me.

You will have to sell upmarket. There are 83K businesses in the US with 100-499 employees, according to the 2009 US Census (the last year data is available). With 1000 cloud service providers in the US that will be a fun Red Ocean to swim in.

There are only 17,500 business with more than 500 employees. That 's the spot you would like to sell in but you would need to be connected or a white elephant hunter.

That leaves Agents chasing 20-99 employees - since that is a majority of the businesses in the US. Let's call the average 40. If you sell that business the full boat: Internet, Hosted voice, email and backup - the ARPU is worth it. The sales cycle will be longer. The deployment will require more input and project management than Agents are used to. (In fact, it is more than most carriers have ever had to do!!!) Post-sales support will also be required. So overall, it is a lot more work for a stickier client with more ARPU than you are used to. Are you up for that challenge?

Let's go back to the 8x8 example at $256 of ARPU. That's about a 9 employee shop. So you sell them 8x8 voice, cable modem AND another broadband service (like DSL or 4G or fixed wireless). You offer them Google Apps for SMB via NeoNova for some small change. Add in some Mozy Pro back-up (or Carbonite or other backup service that pays you). Next you try to get the cell phones - there has to be a couple that are corporate owned -- for a few more dollars. Don't forget the 4G data plan.

So you wrapped up the Internet Access, mobility, voice, some DR (disaster recovery), backup, email and office suite. After that, what software do they use? How about Conferencing? Do you see? You have to grab the whole wallet (or you can't make much money).

It has to become a lot like McD's. What do they do? A call center hits you first in the drive-thru with, "Would you like to try our ______ special today?" No. "okay. Order when you are ready." But don't forget "Do you want fries with that? or can we Super Size that for you?" It sounds cheesy but you are going to have to do it.

CenturyLink, XO, MegaPath and quite a few other carriers offer transit, Hosted voice and cloud services. It will all be on one bill, with one carrier to blame, with one throat to choke. It makes it easier to sell --- check boxes on an order form or site survey.

You better hurry because the MSP's like MindShift and others are already out there doing this.

When you consider that Parallels AS platform allows hosting companies - like Intermedia.Net - to sell, bill and deploy these services (Hosted PBX, email, storage, office) with a click on an online order page, spend this month - the last month of 2012 - deciding what your plan is going to be for 2013. While I hate the hype, many of your competitors are already targeting your customers. Selling them a T1 will be easy after they sell them VDI or backup or Hosted PBX. Then what do you do?

Again, you have to do it but I wanted you to have a realistic view of what it was going to be like. You have vacuum up the services - all of them - heck, sell them office supplies if someone will pay you for it! Managed Print anyone ;)

Data Tsunami

2012-08-08T18:36:08Z

Cisco's blog writes that we are in a data tsunami due to broadband Internet demand from consumers and their devices. Holy Hype, Batman! This is the same hype that Cisco's Global Consumer Internet Traffic Forecast started in 2009 with the Exabyte Tsunami. I get it: buy more Cisco gear.

It is behind that hype - and in the blog - that the Duopoly justifies metering, throttling and caps. It's kind of a load of bull to hide their flat ARPU. When you consider that VZ DSL costs about $30 and Road Runner cable service is $60 in Tampa Bay, I think that there is plenty of profit on the cable side. Caps, metering and throttling are for finite resources like satellite and cellular. Cellular reminds me of the auto industry: zero to 60 in WOW! But actually do that and you get a ticket. Why talk about 10MB up and down if you don't want people to use it?

Cisco talks about how bottled water pricing can be a model for broadband pricing. Two reasons that doesn't work: Branding and competition. In broadband, there is no competition. None. And What brand? FiOS? Lightning?

Short marketing lesson: if you keep changing the rules (pricing plans) for your customers, you deflower your brand. Change rates while diluting support - or having low support scores - makes your customers mad. Luckily, though, in many areas, you are the only choice. Ah, the monopoly.

So often the messaging is mixed. Watch video on your phone. Watch TV from anywhere in your house on your iPad. So video is front and center in ads but then punish the user for using it???

And has data really gone up? With video, probably. Shouldn't the Duopoly have expected that and planned accordingly? "Poor planning on your part does not constitute an emergency on mine."

Some stats:

Telogical Systems on slide 24 shows broadband standard rates increased by almost $1 in 2010. From 2010 to 2012 pricing stayed about the same, which is the problem for consumers who would like to see shrinking pricing and for ISP's who want to see more money.

"5 out of the 7 top ISPs already have, or will soon have, data usage caps," Telogical.

Lot of hype over data usage but I have been streaming the Olympics all week without too many buffering delays. So it isn't really a capacity issue. It's a Wall Street/stock price/debt issue.

What does caps, throttling, and metering do to cloud usage?

What Will Happen to the Gear Vendors?

2012-08-07T18:15:29Z

There used to be a class 4 switch called Coppercom. It was a decent switch and reasonably priced. The company couldn't make a go of it because the ISP and CLEC market was shrinking at the time.

Yesterday there was an announcemnet that telecom CAPEX (capital expenditures) have shrunk. Credit Suisse says the two remaining RBOC's account for nearly 60% of U.S. telecom gear spending. Both companies have diminished spending, especially on the copper plant and DSL. VZ isn't rolling out any more DSL or FiOS - instead they are co-marketing cable!

Ripples in the pond or butterfly wings - no matter how you want to look at it. What will happen to the gear vendors? Tellabs, Ditech Networks, Sonus Networks, Ciena, Adtran, Alcatel-Lucent, Westell Technologies, and Acme Packet are all exposed to the CAPEX plans of the RBOCs.

I see four factors exacerbating this situation:

ZTE and Huawei are creeping in to the US market either.
Consolidation results in less customers for these vendors.
With 60+% of RBOC revenue from cellular, spending will lean to wireless, backhaul.
The move to cloud services means CAPEX is going to a new set of vendors.

Telecom is looking gloomy not cloudy.

Snarky News Bits

2012-08-06T17:38:31Z

Just so many things to comment on in telecom, but just do not have the time to hit each one. So here are some snarky news bits.

The VZW-SpectrumCo deal in for "tough remedy", Reuters is reporting. Yeah, conditions that will never be enforced. Public Knowledge is pounding on the FCC about Comcast caps, declaring that the caps violate the merger agreement with NBCU. Will any action occur? Probably not. The issue with the spectrum deal is the joint venture. "Anti-trust regulators have sought strict limits on controversial side deals." We'll see how that goes. I hear that VZW stores are already marketing cable deals.

VZW is also in the news because the FCC forced them to allow tethering apps on Android phones. VZW says that they never blocked apps or functions on any smartphones. CNET has a long FAQ about what the tethering settlement means to the end user.

Fake AT&T Bills Direct Users to Blackhole, Zeus.

How "Toggle" Worked Its Way Through AT&T's Innovation Pipeline And Into Cell Phones.

AT&T plunked down $650M for Nextwave Wireless - well, really for the spectrum, hoping that the FCC will allow its use for LTE despite its proximity to satellite spectrum. Didn't Lightsquared just go down this path?

Nashville is lucky enough to be the trail market for Comcast's metering plan. "Comcast Starts Billing Bandwidth Hogs, But Exempts Its Own VOD Apps". In other words, Netflix goes towards usage but not anything from Comcast servers. The pipe for on-demand is probably a separate channel. The meter is on the Internet pipe. Also, VOD is part of the TV service and is On-Net. Netflix is off-net. Why meter? Increase ARPU and save your TV franchise.

Comcast Hits 300MB

2012-07-25T19:34:32Z

Comcast rolled out Xfinity Platinum service with speeds of 305Mbps down and 65Mbps up for about $295. It was designed to compete with VZ Quantum FiOS, which is 300Mbps down, 65Mbps up, and $205 per month in the Northeast. Xfinity Platinum will include free Xfinity Signature Support (27/4 tech support and a personal consultant), a secure wireless gateway, and the Constant Guard Security Suite.

In some areas Comcast is doubling the speed for its existing tiers. This will make selling T1's - and in some cases Metro Ethernet - very challenging for agents and sales folks. 300x65 is less than $300 - a T1 is a measly 1.5x1.5 for $300-$600. Talking about "Dedicated bandwidth" will only work if the cable system (or FiOS) in that area experiences congestion and/or outages.

Even if the customer only had throughput of 100x15 for that $300, a 10x10 Metro E costs three times that. Certainly, business class, SLA and other factors can be contributing to the negotiation, but it is getting more difficult.

Broadband has cannibalized DIA (dedicated Internet access) offerings. No wonder all the talk is about MPLS and private cloud; these services have not commoditized YET. Coming soon though.

You Can't Win on Price

2012-07-24T20:11:10Z

Another call today about a cable company stealing the deal because they are giving away the network. You can not compete on price!

The RBOC's have ceded the sub-$500 wireline market to the cablecos. VZ wants to clip the copper, which would destroy the DSL market - what there is it of it.

So stop trying! Selling means providing Value. It means offering a package of servcies that is so attractive to the prospect that they will buy it despite it costing 25% more.

Clearly, straight transport or transit comes down to commodity pricing, but when it is a bundle of services, you have to out market the cablecos. You have to Out SELL them. If not, you clearly suck at selling or don't understand your job. Offering transport or transit at the low price is order taking, not selling.

Want to learn how to Compete? Go here and purchase the MP3.

Where Will the Revenue Come From?

2012-03-02T16:00:45Z

The screaming you hear is coming from execs at the global cellcos. For years we have been hearing how voice will be free. (Hasn't happened yet, but it has flat rated.) Now it seems the text messaging revenue arm is decreasing - 9% from last year globally.

According to this article, "Pinger and an explosion of smartphone messaging services -- like iMessage, BlackBerry Messenger, WhatsApp, Viber Media, Facebook Messenger and KakaoTalk -- have managed in just a few years to slash away at the important revenue that cell phone companies get from text messaging. Analysts say there's no end in sight to the financial blood letting."

This explains all the metering and bandwidth caps. Revenue is flat for cellular so they need to make it up in data revenue. When you are spending $7-9 Billion per year on the network, plus paying for roaming and having to buy spectrum, you want ARPU and revenue to go up.

There is also all this envy to Apple, Google and other cloud companies that are making money from apps, shopping and usage that the cellcos are not getting a piece of.

I think it is also why a good many cell phones do not have wi-fi. That tends to work two ways though: wi-fi is capacity offload while the customer is still paying you a monthly rate. Wi-fi upload may be how they save some money on capacity upgrades. Wi-fi capability in teh handset would also be a way to appease the folks who get throttled or capped. However, that doesn't help the carrier revenues. They just don't want to be a dump pipe, but every move they make seems dumb.

What About Selling Cloud?

2012-02-21T15:55:02Z

At The CPZ, the rest of the panel were cloud guys (VAR's and Hosted UC). This is a snippet of the conversation where the panel is talking about how transactional telecom sales are dead, long live the Cloud!

People deemed LD dead years ago (like when MCI went BK), too, but there are still a large number of agents and resellers making money on LD and pre-paid calling cards.

Until TDM is retired, agents will still be selling POTS, DSL and T1 - and making a living doing so.

Here's the problem with selling Cloud (other than the fact that cloud providers keep screwing commissions to agents):

The sales process is different! Selling replacement telecom services is not the same as selling managed services (like cloud and IT). How different? The conversation, script, questions and prospecting for IT is distinct. The buyers may not be the same. Sales triggers are dissimilar. It requires sales and product training.

I worked for a Novell VAR from 1996-1999. The sales trigger was when something broke. In telecom, the sales trigger is usually the end of the contract, because the penalties for leaving early are huge. Other sales triggers for telecom: expansion, moving, or a shift in IT (i.e., more bandwidth needed because of VoIP, Citrix or backup).

Dave makes a point about "do you want to be in that cheap stuff or do you want to do good by your customer". Do agents want to be in "the cheap stuff"? No. Our commissions are based on MRR. We would like it to be as high as possible. However, we don't make the prices, the carriers do, so why blame the sales force?

In some cases - like government agencies -- the prospect is looking to reduce the telecom spend due to budget constraints. If I don't do it, someone will.

Back to being mad about the prices falling:

Agents didn't commoditize telecom, CLEC's did. It started with the LD penny wars and has continued every since. In 1999, when Covad, Rhythms and Northpoint all IPO'ed, all 3 selling DSL nationwide against each other without any differentiation was another hit. DSL (broadband) created pricing pressure on the T1 business, which continues to erode to this day. Moreover, the Integrated T1 became a commodity long ago, again due to a lack of CLEC differentiation (branding, innovation, product design and marketing). SIP trunking came along as a "cheaper" alternative to a PRI. See how that goes?

Today, we have $200 Covad T1's and $2 per MB Cogent bandwidth adding to the price compression. So who's fault is it? (I won't even get into the companies that went through BK and really screwed up telecom with that arbitrage mindset or the fact that even as revenue diminishes debt is increasing.)

When you look at the Hosted VoIP space, there isn't a whole lot of differentiation either. There are so many players, it is confusing to the buyers and sellers. It doesn't help that so many of the providers don't know what they want to be or who they want to target. "Wholesale, white-label, retail - whatever! Just sell something!"

In the video, I make a point that no sales person is going to walk away from revenue. Well, most carriers don't walk away from revenue either - even bad revenue (no margin revenue).

Let me give you an example: there is a Hosted UC shop that really only wants UC customers, but doesn't really say that to its Channel. When an Agent brings them "small" hosted PBX deals, it is frowned upon -- but they don't say No (to the revenue).

If the carrier doesn't have a target market - like AboveNet and Smoothstone do - then it is selling against everyone everywhere. That's just stupid. Service Providers need to start thinking like fiber and cablecos: ON-Net is Good. Type II is bad.

As we get into Cloud services, we are talking bloody red ocean - everyone and their brother is a player: web hosts, data centers, MSP, VAR, telcos, cablecos, CLEC, ITSP. Yeah, that will make it easy to sell. How would an agent even do a competitive analysis?

If you want an Agent to sell your stuff, answer these questions:

Who is buying your stuff right now? (Be specific: vertical, NAICS code, buyer title)
Why are they buying it?
Why are they buying it from you?
What's your special sauce? Or where's the beef?
What questions are you asking to get the conversation going?
What was the sales trigger for the buyer? (in other words, what made them want to buy?)

If you can't answer these questions (or want to give me BS answers), this is your problem! Don't blame the Channel.

3 Things Agents Need to Look at in 2012

2011-12-30T21:14:19Z

It will be a busy year in 2012 as all the carriers try to synergize their mega-mergers and get their back-office in order so that we can actually place orders.

Besides selling the traditional circuits - POTS, T1, SIP, PRI - there are some interesting things for an Agent to look at in 2012.

M2M is growing. We are seeing that the 3G/4G system is creeping in everywhere - from broadband backup systems to surveillance systems to fleet management to home healthcare monitoring to security monitoring. There are an unlimited number of ways that devices and the wireless network can interact. Think about the Kindle. There is money to be made in M2M.

More wireless but mixed with TEM. If you haven't moved your big accounts to TEM, 2012 may be the year you think about it. Auditing has increased in the last two years as governments (local, county, state) and medium businesses look for ways to reduce the ever-increasing telecom bills. (Cellular/3G/4G is big and growing, which is increasing the total cost of telecom spending.) Telecom Expense Management (TEM) can help accounts that spend more than $5K per month. It also makes the Agent the point person all the total telecom spend. It's a great way to become vital to the organization.

In addition, you can add Mobile Device Management. If a company has more than 250 employees, it likely needs help tracking laptops, data cards, cellphones and the like. There are software platforms for this to make an Agents life easy. This is yet another way to become integral to a clients business. Notice I'm not suggesting selling cellphones, but manage those assets for the business.

Lastly, there is Cloud and Managed Services. I'm going to skip cloud unless you want to sell apps to businesses. If you sell within a vertical, I would suggest that you certainly start selling apps into that vertical, because it will add revenue for you and make you the go-to person for all things IT and Telecom for that Vertical!

In Managed Services, we are seeing a few trends: hacking is increasing; security is lax; IT is pervasive in today's business environment but there is not enough money or staff to handle it all. That's where managed servcies comes in. If the company has a lot of empployees and a small IT staff, managed servcies would be a fit. Things to ask:

"What task would you like to relieve yourself of?"
"What routine task could we outsource to your ISP to free up your staff's time?
"You are consuming a lot more bandwidth, what are you doing about firewall and other security?"
"How are you tracking wireless spending and devices?"
"What would you do if a company laptop was stolen or lost?"
"How much private company data is on a smartphone or laptop? How much access does either device have to your network?"
"Do you backup your data regularly and off-site?"

You have to adjust for the changing times, unless you just want to push pipes. But your customers are under a strain to handle devices, billing, auditing, tracking as well as security and more. You can make some extra money -- and become more than just a sales guy -- if you move beyond the pipes and help your customers with the rest of the story. HUH? They buy those pipes from you for a reason. Help them with that.

Happy New Year!

How Good is BYOB VoIP?

2011-12-12T16:15:13Z

One of my coaching clients has had some issues with BYOB (bring your own broadband) ITSP's (VoIP providers) over the last couple of months. I have too. My Aastra IP phone died and I moved to an ATA, which has added an incredible amount of echo and tin to the line. He says that he has one way calls and the two of us have experienced garbled calls.

All that makes it difficult to sell VoIP to businesses.

Some of it - like the echo - is the CPE. Some of it is the configuration by the ITSP. Some of it is the broadband.

The ITSP should correct all issues with the CPE and the configuration - without doing finger pointing to the broadband. If you deliver BYOB VoIP, you can't spend all your time blaming the ISP.

If you buy and use BYOB VoIP, you can't expect POTS quality service either. Seriously. VoIP isn't POTS. And Voice over the Internet (which is what BYOB VoIP is) is going to have quality issues. Period.

My ISP has been giving me indigestion over congestion issues for a while, but what can you do?

The Duopoly – cable and telco – want to meter broadband because they want more revenue. They don’t want to upgrade the networks any more unless they can make more $$. They need the ARPU to go up, which in the current economic climate is just not going to happen. So the result is to decrease CAPEX spending on network upgrades. We see this on cellular networks. Despite spending $7-9B per year on the cell network, the cell networks still experience congestion and that is after the cellcos have capped consumer usage too! What happens when the wi-fi offload to broadband hits the point of congestion? Metering. (We already have capping in place on consumer broadband.)

How is this going to affect business down the road?

More and more workers are working from home. That means day time broadband networks are being used like never before. (It used to be around 3 PM when the broadband would get hit as kids came home from school.)

Smartphone users are switching to wi-fi when they can to save dollars and the broadband networks - more than 60% cable today - are congesting - at a few points. The bottlenecks are in the neighborhoods and in the peering points.

When David Byrd was talking about BYOB in his blog and stated, " For the most part, 90-95% of the time, this works out very well and an overwhelming majority of our customers are very happy," I believe he was talking about DIA not broadband. Big difference. A business broadband circuit of 10MB x 2MB is not the same as a T1. The numbers look better but broadband is best effort, shared bandwidth and DIA is a dedicated circuit. The quality of bandwidth is degrees different.

Many ITSP's have moved to looking for bigger deals where the business will buy DIA or MPLS or a dedicated VoIP circuit. Converged is a nice idea for a network, but at the end of the day, it is about quality, ease and of course price. With the cost of customer acquisition increasing, no company wants to lose a customer over quality. (Besides that churn number makes Wall Street unhappy. 2.8% is not a friendly number.)

For businesses with less than 25 handsets, BYOB VoIP may be the way to go, but think about having two broadband circuits - something to alleviate the VoIP quality issues that may arise.

Look for an ITSP that is connected to your ISP as that can alleviate some of the path quality issues.

Try a demo phone for a day or two to see what it will be like.

Fax, alarm circuits and other special needs lines will still have to be POTS for now, but that's okay - you'll have a back-up line in case something happens to the VoIP or the Internet or the power.

Is All Broadband Going Metered?

2011-12-05T20:56:30Z

Many rural fixed wireless ISP's meter their service for network management and costs reasons. The spectrum is finite, which means that wireless ISP subscribers can only get a set amount of bandwidth from that tower. The backhaul from the tower would be the other limiting factor.

In cable systems, the backhaul to the neighborhood is the bottleneck. The next bottleneck is the Internet gateway - how big is the pipe to the Internet that the cable system uses locally (and just how congested is it).

The DSLAM is the bottleneck for most neighborhoods. And the backhaul is the next bottleneck. It's tough to backhaul a 48 port mini-DSLAM with 2xT1, but it is done. Often.

As you have seen on the commercials, VZW and Ma Bell limit your mobile data to 2GB and 5GB. Sprint does too, except on your smartphone, but according to reports today, will be stopping that practice and moving to caps as well. T-Mobile has caps.

Ma Bell and TWC both trialed caps on consumer broadband. Supposedly this bombed but we know that Comcast and others have bandwidth caps for consumer broadband.

Now CenturyLink is capping DSL. CenturyLink is announcing the following Excessive Usage Policy (EUP), which will become effective in February 2012:

CenturyLink's EUP applies to all residential high speed Internet customers and is only enforced in the downstream (from Internet to customer) direction. Video services provided by CenturyLink PRISM™ TV are not subject to the usage limits. The policy has the following usage limits per calendar month:

• Customers purchasing service at speeds of 1.5Mbps and below, have a usage limit of 150 Gigabytes (GB) of download volume per month.
• Customers purchasing service at speeds greater than 1.5Mbps, have a limit of 250GB in download volume per month.

This will be one more pinch point for the consumer. Consumers are streaming music, movies, TV, living on social media, and sharing media with their friends. Stores this holiday season are selling TV's and DVD players that are all Internet-enabled to stream GoogleTV, Netflix, HuluPlus, Pandora, YouTube, CinemaNow and more. (Heck, you probably read my rant about all the buffering I go through with BHN.)

Not only that, so many tele-workers are using consumer broadband from home, working in The Cloud (so to speak).

VoIP, web/video conferencing, Skype, Citrix and virtual desktop, VPN and security wrappers, CRM, backup, virus and software updates - that cap will be hit quick in 2012.

The funny thing is that most of it was poor planning on the network operators part. And because they are a slave to The Street, who still see telcos as rate-of-return dividend checks, the consumers will get pinched. So too will providers, when the consumers find out that the backup or the VDI app or whatever is costing them $10 extra a month, it's out. Watch.

Well That Was Unsatisfying

2011-12-02T16:47:51Z

Tuesday night was kind of the last straw. While watching CinemaNow through my LG Blu-Ray player, the movie - 30 Minutes or Less - must have stopped to buffer 10 times and actually stopped 3 times - in 90 minutes!

I called my ISP, BHN of Tampa Bay, which is always interesting. First, they remotely re-boot the modem. Then you call back if that didn't fix anything. Then they make you do a speed test from their local site, which showed 8 MB x 0.8 MB. As I explained to tech support, that test doesn't mean anything except that last mile is good. I'm testing from Tampa servers that are On-Net! Then I tested with the FCC speed test site and DSL Reports test, which all gave different answers. Natch.

So the tech sets an appointment for today. "Maybe it's the modem." The tech shows up, looks at the modem and my router, and has me run a speed test from BHN. It comes back at almost 10MB x 1MB. "We're good here," he says and starts to leave. "What?!" I said. "I'm just the middle man here. The test shows you are getting your speed." with that he left.

The speed test only tests last mile - the controlled loop that is On-Net. The Internet is off net! My issues are that I have congestion to most streaming sites, which means that BHN network management is pretty poor. I don't know if they peer with YouTube or Level3 or Limelight or if they purchase transit from Level3, but that pipe is maxed out.

I get a mailer from VZ thrice a week to move to FiOS.

I pay $141 for triple-play plus an extra IP and the HD DVR. Granted the VZ price will be over $100 with fees, but I will get the NFL Network just in time (BHN doesn't carry it) and maybe an a better Internet experience. Who knows? The downside is that it will take VZ two days, a lot of holes in my walls and 4 pieces of equipment to install it.

Without a bundle, like buying DirecTV and Internet separate, the consumer gets raped. Way more than $100 per month.

I don't mind paying the money --- just give me what I pay for! BHN in 2 years has replaced the set-top box twice and visited 3 other times now. That's expensive for BHN and no fun for me. BHN didn't even try to upsell me to wideband or lightning or anything.

Anyway!

Today, VZW announced that it will buy SpectrumCo.'s 122 advanced wireless services (AWS) spectrum licenses, covering 259 million users, for $3.6 Billion. SpectrumCo. is a joint venture between Comcast Corporation, Time Warner Cable, and Bright House Networks. This deal needs FCC approval.

Does this mean that cable is giving up on 4G? No. According to the BizJournal, the cablecos will become authorized agents to sell VZW products -- and at a future date become wholesale customers (MVNO).

FYI, ISP's are going about data caps the wrong way. Nice article.

Ethernet is Spreading

2011-07-18T15:59:55Z

So many notices this week about Ethernet. It's the preferred protocol for most businesses. (No one wants to buy a DS3 card and configure it, I guess). Ethernet is becoming more and more available as the delivery protocol for Internet bandwidth, MPLS, IP/VPN, and Private Line.

The M&A targets are all fiber guys like FiberLight, AboveNet, Zayo, Sidera, Fibertower, Fibertech and XO. All are Ethernet players.

AT&T announced that come August 1st it is almost doubling the Metro Ethernet rates in the 9-state BLS region. What a bonus for customers.

Sprint launched Ethernet access in 25 new markets and expanded offerings in five existing markets. Ethernet is available for MPLS and IP products. Sprint finally leveraging their pin-drop network. [Don't want to play with Sprint directly, TNCI resells Sprint.]

FiberLight released a new IP network architecture based on Ethernet for governemnet and enterprise customers. Juniper and IBM are technology partners in this new IP platform.

In a similar fasion, Comcast and Ciena went on the road to train salespeople on how to sell Comcast Metro E. "Ciena's Carrier Ethernet Service Delivery (CESD) platforms are being deployed by Comcast as customer premise equipment for business services and wireless backhaul."

Media reports that wireless backhaul is a huge market - and it is slowly migrating to Ethernet. I think physics determines that wireless tower backhaul is a finite market - - you can only get so many bits into X amount of spectrum, no matter how many radios you use. So with everyone spouting off about backhaul opportunities, I don't know how many players will actually make a huge dent in revenue from it. I have seen figures that VZW pays less than $1000 per tower backhaul. That would take a lot of towers to move the revenue meter. And let's not forget that it is a competitive market -- RFQ and bidding war anyone? Especially after you told Wall Street how much the backhaul market would bring in. DUH!

In other Ethernet news in July that affects the Channel:

Netwolves announced that they can put multiple Ethernet providers with managed services on 1 invoice. NetWolves has relationships with over 50 different providers that sell Ethernet services. This allows us to find the provider that is best suited to deliver the service for you. We also have the ability to bundle multiple Ethernet providers onto a single bill for your customers.

Also, Airespring uses the lowest cost provider per area to build an inter-connected MPLS network. (Can you say NNI?)

NITEL is another carrier that can help Agents expand their product offering to with nationwide MPLS, Ethernet, dedicated Internet (DIA) and private line services.

EarthLink Business has nationwide MPLS, formerly sold under the New Edge brand. Since adding Deltacom, Ethernet should be available extensively in the Southeast.

All this Ethernet talk makes me think of the numerous Carrier Ethernet Exchanges that have evolved - from TELX and Equinix to Neutral Tandem and CENX. It's a lot of spots popping up to inter-connect using Ethernet. Basically, it's a meet-me-room with carrier ethernet switching gear (usually from Cisco) that allows the exchange of traffic at 100MB or higher. It is a cost-effective way to pay for peering (sort of), as you exchange traffic of HD voice, video, SAAS, mobile data, CDN and tele-presence packets. Carrier Ethernet Exchanges mean Ethernet sales and in many cases collocation sales for agents.

US Signal deploys Cisco ASR 9000 Series for enhanced Carrier Ethernet and a new managed Data Center service. The ASR will allow US Signal, a TCA vendor member, to scale its Ethernet offerings in the Midwest. "US Signal Managed Data Center service is built with dedicated resource pools designed to rapidly provision and host Virtual Private Servers accessible through the upgraded US Signal IP NGN." So we go from Ethernet to Cloud just like that.