On Rad's Radar? - bandwidth Archives

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.

Alteva Acquired by WVT

2011-07-15T03:02:28Z

Warwick Valley Telephone announced that it is acquiring Hosted UC firm out of Philadelphis, Alteva for cash and stock valued at $17 million - $10M upfront. "At closing the Company will enter into employment agreements with certain of Alteva's key employees." WVT is going to integrate Alteva into its CLEC operation, US Datanet. Alteva is the second Broadsoft client in M&A activity announced this month.

"Pursuant to the Agreement, upon closing, the Company will purchase substantially all of the assets of Alteva, except for Alteva's employee benefit plans, organizational documents and insurance policies. The Company will only assume certain of Alteva's liabilities, including certain of its contracts, debt owed under specified capital leases and certain accounts payable."

It's ironic that telcos are buying into Cloud at the same time that they are also killing the Cloud. How are they killing the cloud? "The problem is that with cloud-based services being more consumer orientated, those bandwidth caps are proving to be useless. High bandwidth will apply to everyone, even if they are not file-sharing." I know that this is a B2B deal, but with all the home workers, tele-workers, solopreneurs, and SOHO, a lot of Cloud apps are accessed via consumer broadband and cellular -- both metered. Should be fun to watch those 2 things smash into each other.

Riding the IPv6 Wave

2011-07-12T21:54:03Z

Correction: Verio is now just the name for the NTT hosting division.

NTT America is looking to make a big splash in the IPv6 space in the Channel. NTTA has run a global IPv6 network for quite a few years. In fact, NTTA sponsored an IPv6 Summit in 2007.

This year is the start of a push to convert over to IPv6, the latest addressing scheme for Internet devices. Why are we switching? This year marks the exhaustion of available addresses in the IPv4 space. The old 192.168.0.1 has basically been used up because every household plugs too many Internet connected devices in: TV, laptop, Xbox, Blu-Ray player, set-top box, OTT video appliance, wireless access points, media servers, and even refridgerators. Of course, most of these do not carrier a live IP address but are numbered via NAT from that broadband router your ISP rented you. The router has a live IP address that looks like this 206.225.20.204. So does every smartphone. And every VoIP phone. So because everything has to be always-on, we exhausted the old numbering system (globally). The ISP's still have numbers to give out to customers, but soon they won't.

At some point, like now, we have to start selling IPv6 Internet bandwidth. The problem is that many devices are not IPv6 capable. That very thought makes Cisco drool.

In the meantime, we will have dual-layer boxes that will run both IPv4 and IPv6 -- just to make it really confusing for the over-worked IT staff. So NTT is pushing that Agents should start selling IPv6 now. In fact, the August TCA agent education webinar will be with me and NTT talking about IPv6 and why anyone should care.

There was a World IPv6 Day on June 8 to "conduct a 24-hour test to demonstrate the ability of selected Web sites around the world to move to a global IPv6-enabled Internet". It faired well. Now we just have to get out and sell a bunch of IPv6 bandwidth.

Tidbits This Week 7-12-11

2011-07-12T19:16:30Z

Masery was bought by ABRY Partners. No word on AboveNet yet.

A group of tech companies - including RIM, Google, Microsoft, EMC, Sony, Ericcson - bought the Nortel patents for $4.5B.

Top ISP's - AT&T, Verizon, Comcast, TWC and others - have joined together to fight piracy by monitoring your online activities. This comes after the announcement that metered bandwidth is coming to both terrestrial and wireless broadband. Can you say DPI? Did you hear that? It was the death cry of any thought you might have of privacy online.

eBay bought mobile payments firm Zong for $240M.

Citrix bought Cloud.com for an estimated $200M.

The Assistant US Attorney General at the DOJ in charge of anti-trust has decided to leave - in the middle of the AT&T/T-Mobile merger review! Looks to me like either someone has been threatened or offered a golden parachute.

Skype works with Facebook, Tom Keating tries it out.

Beth Israel Hospital is suing Verizon for $9M in billing errors.

As TV Slows, The Cloud?

2011-06-13T14:22:12Z

As I have been spouting for a while, telcos are getting into TV (and spending billions to do it) too late. The TV market is saturated - DirecTV, DISH, cable, telco and OTT. The economy isn't helping either as people ditch landlines and TV for mobile and Internet (bundles that the ISP's just don't seem to want to sell for some strange reason).

The cablecos tried wireless, but have dropped that notion in lieu of just partnering with Sprint (and Clearwire) again. (Still no Quad-Bundle actively being advertised.) The mobile and broadband space are both growing slowly (if at all). So where will growth come from?

For MSO's, the SMB space. [Even Bloomberg agrees.] The ILEC's - especially Ma and Pa Bell - have given up on small business. This leaves a great opportunity for regional CLEC's and cablecos to target and win that market. For cable, it's all about delivering cheap bandwidth and cheaper voice. The voice revenue is free money for them. (And money that keeps slipping out of the ILEC pocket.)

TWC made an interesting move in buying Navisite. It opens up the world of hosting, I mean Cloud, to the cableco. It gives them an edge in chasing B2B services, if they train their sales force on how to sell it. Selling transport and transit is easy. It's mainly upgrades and replacement services. But Cloud and managed services are a whole different ball of wax. At least 2 cablecos - Cox and Comcast - have jumped into the Hosted PBX space. The one advantage an MSO has over another cloud comm provider like Packet8 is that the MSO owns the network and can deliver quality of service on hosted PBX (or other cloud apps).

The Bloomberg article mentions that Cox is going to build its own electronic medical records platform. That too is an interesting move.

The article mentions that Ma and Pa Bell have bigger network footprints. Cablecos are inter-connecting. BHN and Comcast have NNI's in Florida. Soon the top 7 MSO's will be inter-networked enough to sell to most of the US.

This gives agents and VAR's a great opportunity to sell to the SMB space again. How Cloud will fit into this, we will just have to wait and see, but things could get interesting in 2012.

Schools and Libraries are Off Limits

2011-05-12T15:51:51Z

Saw this notice today: "AT&T corporate policy prohibits Alliance Channel Solution Providers from selling AT&T services to E-Rate eligible customers (which includes all K-12 schools and public libraries). Do not engage in sales activity of any kind with E-Rate eligible customers."

That's interesting because almost all schools and libraries are E-Rate eligible (if they do the paperwork). So if Agents want to sell to schools and libraries, Agents will need to bring in a different carrier.

Channel Segmentation is a pain. It's a policy whereby there are going to be accounts that Agents can't sell to, but Agents won't know which accounts they are until they register the opportunity and are informed that they can work it. The accounts vary from carrier to carrier. (At least in this case with this carrier, Agents know a whole class of accounts that they can't target.)

For those that are unfamiliar with the E-Rate program, it is funded by USF fees under the auspices of the FCC and managed by the Universal Services Admin Company (USAC). There a fact sheet on the US Dept. of Education website. Basically, it provides for the USAC to subsidize Internet Access for schools and libraries. And of course there is a lot of paperwork for both the schools and libraries and the service providers.

Changes in Customers, Changes in Attitude

2011-01-30T15:53:16Z

In an article by Gary Kim, Matt Bramson, Inphonex chief marketing officer, sais some interesting things about telecom sales to SMB.

Bramson suggests that "People also increasingly are comfortable configuring their own solutions and are used to getting support from user communities. ... in many cases, "first line" support can be handled by FAQs, online chat, discussion forums and so forth." Personally, I find that most peopel can't even use Google or realize that web search engines can provide many answers. As an agent for over ten years, all calls start with me - billing, repair, FAQ - so perhaps the agent channel won't be eager to take up the sales of providers that will not be providing Tier 1 support.

I agree with Bramson when he says, "Customers can get their own bandwidth. What they can't do is pick the right cloud-based solutions." Most small business customers get broadband for Internet Access, which is not always the appropriate choice due to "best effort" service and the lack of SLA. Then an agent will sell them on Cloud, perhaps saturating that pipe. The calls will start.

This is the problem that the ISP's have dealt with years: anything attached to the Internet including unprotected computers, become the responsibility of the ISP. Now it will also become the duty of the agent.

Bramson, do you know why most agents and service providers chase the medium and enterprise space? It takes the same amount of time to close a sale; the sale is bigger; and these companies can take care of their own minor issues. This has been the issue with the mass small business space for quite a few years: expensive to support at rock bottom dollar. Few Agents can sell a cloud service and walk away. How much commission is there in cloud services to support even one phone call per week from the customer base?

For the last two years, I have been preaching that our industry has to get away from we-will-save-you-money, so I agree with him here: "We now talk about business problems."

"What will have to change is demarcation point, as well." Historically, service providers have not wanted to operate on the other side of the demarcation. They didn't want the truck rolls and the support burdens. That was why other businesses, such as the value-added reseller and interconnect business, arose. Those sorts of companies specialize in managing, supporting and fixing things that might break on the other side of the demarcation.

The question becomes will the commissions on cloud services be enough for the Indirect Channel - agents, VAR's, interconnects - to make a living while becoming the sales force, the provisioning department and Tier 1 support.

Broadband Numbers Fall

2010-12-13T19:00:07Z

Broadband deployment numbers will fall. Why? The FCC has re-defined broadband as 4MB x 1MB and most DSL and 2.5G/3G do not provide that kind of real bandwidth. In the FCC report titled "Internet Access Services: Status as of December 31, 2009," 68% of connections in the US advertised as "broadband" can't really be considered as such because they fall below the agency's most recent minimum requirements." Oops!

TechSpot notes that 'over 90 million people in the country are using a substandard broadband service. To make matters worse, 58 percent of connections don't even reach downstream speeds above 3Mbps." BTW, cable leads the way with 70% of the high-speed bandwidth market (over 3MB). TechSpot goes on to state that this report reflects what consumer Purchased, not what was available. Much of that has to do with bundled packages and pricing, not just availability.

When you consider that faster speeds mean more usage - in other words, if I am buying faster bandwidth, I am going to use it - the Duopoly doesn't want to become a dumb pipe. Check out these bundles: triple play is $100; TV+Internet is $95; and TV+Phone is $85. I can't even find an Internet only plan. The Duopoly has a minimum spend per household -- and they don't care how you spend it.

That doesn't bode well for cord cutters or economically distressed households because there will be a minimum spend.

It used to be that the marketing message for the upgrade from dial-up to DSL was so you could do it faster (save time). Now that message is gone, because the amount of time consumers spend online is increasing. That results in more bandwidth usage - especially is video is growing. That means that network operators - the Duopoly - has to keep upgrading the network to meet demand. Or not. And just say Too Bad! It's better than the other provoider. What are you gonna do? Build your own? If you do, we will sue you and delay if for a couple of years. You consumers are pests. Just give us our money. Oh, and here comes another rate hike. HA! The C-suite wants a raise.

Comcast Making Waves

2010-11-30T02:01:03Z

Big peering fight between Comcast and Level3.

"On November 19, 2010, Comcast informed Level 3 that, for the first time, it will demand a recurring fee from Level 3 to transmit Internet online movies and other content to Comcast’s customers who request such content. By taking this action, Comcast is effectively putting up a toll booth at the borders of its broadband Internet access network, enabling it to unilaterally decide how much to charge for content which competes with its own cable TV and Xfinity delivered content. This action by Comcast threatens the open Internet and is a clear abuse of the dominant control that Comcast exerts in broadband access markets as the nation’s largest cable provider." Level3 is calling this a video surcharge So L3 is pulling out the Net Neutrality card.

Meanwhile, Comcast writes that the trouble stems from Level3 sending it 5x the traffic it sends to Level3. If this is the case, then it requires a commercial negotiation. It requires more than peering; it requires the purchase of transit.

Most of the blog post from Comcast sounds a little too much like a former Ma Bell CEO screeching that Google wants it for free. In this case, I guess Level3 wants it for free. Wants what exactly? Well, video traffic. Video traffic on the Internet is increasing steadily. "A recent study found that at peak times, Netflix represented 20 percent of Internet download traffic in the United States," from a NYTimes article. It just so happens that L3 carries a lot of traffic for its partners like Netflix, Google/YouTube, and more: 9 of the top 10 U.S. cable companies.

What Comcast is really saying is that Comcast customers are downloading 5x times the video that they used to. So Comcast's customers are watching way more video, like Netflix and Hulu, and not buying VOD or PPV or premium cable. Comcast is just trying to make up for the revenue.

The major ISP's are all part of the Duopoly. They have to squeeze someone, because they are already squeezing the consumer.

Comcast customers would have a lousy experience if L3 fought this longer, but so too would L3 customers.

Rob Powell says that he saw this coming and it has nothing to do with Net Neutrality. It may not, but the principle is worrisome.

Susan Crawford thinks that it's bad timing for Comcast as the FCC considers its purchase of NBCU.

"Comcast, the largest broadband provider, largest pay-TV company, and third-largest telephone company in the country, distributes communications services to more than a third of the country. Today, Comcast's existing overwhelming market power was on display in major public battles with (1) Level 3 and (2) cable modem manufacturer Zoom," writes Crawford, a law professor and former tech advisor to President Obama.

She missed the carriage dispute with DISH Network, whereby DISH dropped 3 Comcast regional sports networks. Could it be that Comcast is getting "too big to fail"? I'm not anti-business. I'm anti-monopoly.

Certainly content customers have the upper hand. It used to be about eyeballs, but now its about content. The cablecos develop content and have delivery systems in place for that content. Telcos are mainly just dumb pipe. It's going to be a very uneven playing field very soon.

For those interested Rob Friedman goes into the evolution of Peering based on this story.