On Rad's Radar? - duopoly Archives

The First Woman Chair at the FCC

2013-05-22T14:34:47Z

I don't know much about Mignon Clyburn, except that she is the first acting chairwoman of the FCC. Congrats!

She will be acting chair until Congress approves the appointment of Wheeler to the Chair. Considering some federal judges are waiting 700 days now for appointment, who knows how long this will take.

As long as she has the chair, Clyburn says that she will regulate with a light touch, but touch when necessary.

I hope so, but I can bull on that. The FCC has been consolidating power in 4 companies for a while.

What happened to the Open Access rules on the 700 MHz spectrum?

Why are there still issues with porting?

The FCC collects outage reports, but what do you do with it?

What is it the FCC really regulates? Seriously. What?

In her first speech at CTIA, she said she was happy with the competition! Okay, mission accomplished. Let's close the FCC and save $346 million a year.

On his way out the door, Genachowski's FCC voted to lift 126 outdated telecom rules. Julius made this statement with the order, " With 126 regulations removed, we're talking about millions of dollars in savings, which will ultimately result in a more dynamic, competitive market and lower prices for consumers." Which just proves what a politician he is. Competition? Dude, you did nothing effective to provide a competitive landscape in broadband or wireless.

I don't see Clyburn or Wheeler doing any better. I guess they don't understand how vital the Internet is to our economy.

The New FCC Chairman Might be Biased

2013-05-02T15:40:52Z

In 2009, when Robert McDowell was nominated to be an FCC Chairman, the competitive telecom world cheered, because McDowell used to work at COMPTEL. They thought that Bush had given them a little help in the FCC. Oh, how very wrong they were. All the help in the FCC came from Michael Copps and Jonathan Adelstein.

Today, the Duopoly is cheering because President Obama nominated a lobbyist as the new chair of the FCC. I get the revolving door effect in DC, where people go from the regulatory agency to the private sector that they just regulated. To the average taxpayer - well, they don't notice do they? But to the taxpayer who is paying attention, we just want to kick their butts.

Today, the entire telecom industry is basically unregulated. Very few states still have a regulated LEC. With the clipping of copper, carrier of last resort options decline as does the ability for CLEC's to provide service. Oh, how we will wake up in a few years with huge bills, lousy service, no competition and no regulation. You will just have to like it a drink a cup of STFU.

This cracks me up: "Mobile operators including largest U.S. wireless carrier Verizon Wireless and No. 2 AT&T Inc. "should benefit from a focus on their economic health" by a Wheeler-run FCC, Paul Gallant, Washington-based managing director at Guggenheim Securities, said in a note today." Their economic health???? It isn't the FCC's job to worry about that. The FCC has one mandate: Protect the consumer.

Tom Wheeler ran both CTIA and NCTA, so the cable and wireless companies were popping corks last night. I hope they get the same surprise that the COMPTEL members got from McDowell. I doubt it though. This administration - both at 1600 Pennsylvania and at 445 12th Street SW - have been huge disappointments. N o one gets that our nation's very economy ebbs and flows with our telecom infrastructure. Idiots.

The Secret of Sticky

2013-01-22T04:00:32Z

The secret to sticky customers is the number 3.

Banks as well as the Duopoly understand that customer churn is higher for customers with only 1 or 2 services. At 3 services - the Triple Play - the customer churn is lowest.

Customers don't want a triple play but the bundle is usually cheaper.

Captive Audience: The Telecom Industry & Monopoly Power

2012-12-31T19:53:50Z

Susan Crawford is a telecom lawyer, professor and activist (among other things). Her book about the last ten years of the telecom industry is out by Yale Press, titled "Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age". She recaps the book in this hour long video.

Topics she discusses include a short history of telecom; the lack of competition; the politics of the Duopoly; and the resulting Digital Divide.

Regulating the Internet

2012-12-11T02:07:25Z

While the ITU / UN take over of the Internet was being debunked, AT&T has been making moves of its own. They even have the help of the Astroturf groups as they try to dismantle the copper plant and reassert their Monopoly. (more about that at WSJ)

The FCC is working on two fronts. In one, the FCC formed a Task Force to monitor the transition to an all-IP, general purpose communications network. I say monitor because they won't do more than that.

Quick Aside: It's been 11 years since 9/11 and we still don't have a public safety network yet! That's the H block that they will be auctioning off next year. Whew! Really moved glacial fast there, folks!

I know Regulatory issues are boring - and perhaps you think I am chicken little about this. The truth is if the CLEC industry is threatened, then so is the Agent community. Plain and simple.

Without an innovative telecom industry, how does America stay competitive with the rest of the world? Our Broadband Economy kind of depends on, well, broadband.

On the other front, the FCC is in court over its Net Neutrality rules.

"A federal court is currently considering a case that could determine how much power the Federal Communications Commission has over the primary communications tool of the 21st century: the Internet.... The case, which is before the Court of Appeals for the D.C. Circuit, is Verizon's challenge to the FCC's controversial net neutrality rules," The Hill reports.

If the FCC loses the case, all IP will be unregulated. Can you say caps, metered, slow, pricey broadband? It's what the RBOC's hope for.

But does it really matter?

Everything is pretty deregulated now. It's the wild west in VoIP. Everyone with a 486DX computer carcass has slapped on Freeswicth or Asterisk to offer VoIP. It's actually beyond the FCC to enforce it all.

Let's face it - I have proclaimed this before - the FCC is not in enforcement. Sure, a nipple here, a CPNI fine there - piddling stuff when you consider the trillions in investment to form a Duopoly that have decided to NOT compete with each other on any front.

People ask why I dislike the RBOCs so much. This is why. They spend tens of millions each year on lobbying and litigating. For what? They still have majority stakes in all the pies they are in. They could be spending that money on customer care or better broadband. But No! Let's fight the FCC and the CLEC "threat". Not to mention how both of them treat Agents!

When all the information runs on the Internet and we count on 10 companies to supply that network, privacy (what little is left) will be removed from the dictionary.

Meanwhile, Sprint, flush with cash from Softbank, has acquired US Cellular customers and spectrum in the MidWest. Sprint is also in talks with DISH about partnering on DISH's spectrum, a political football at the moment. This just reeks of Clearwire Part II.

Now that T-Mobile is getting the iPhone (5S with NFC maybe?), and perhaps MetroPCS, will it catch up to Sprint? And even if it does, combined Sprint and T-Mobile with MetroPCS (56.4M+42.5M) - throw in Leap and Clearwire too - are smaller than VZW (with 108.7M).

Another interesting tale is the Avaya Debt which cost the CFO there his job.

Beware of Cable

2012-12-06T14:40:08Z

On the one hand, you have the Top MSO's - Comcast, TWC, Cox, Charter, Cablevision and Bright House - taking market share rapidly, primarily due to its better broadband bargain and its willingness to build out fiber.

On the other hand, cable sells a commodity item at low prices. Obviously, not just cable prices are low, T1's are under $300 in major areas; EoC is inexpensive; and Internet bandwidth in major hubs is under $1 per MB! It is taking more and more sales to make a living.

My comment in Channel Partners - "Beware of cable changing channel rules in 2013 and acting like AT&T or Verizon" - raised some eyebrows. When you look at the whole landscape, my prediction might be early, but it has to be heard.

The RBOCs - AT&T and VZ - are able to do what they want to the Channel - and they do - because they are the largest two carriers in the US. They have a brand name. They are the default carrier. Customers ask for their service. I wouldn't willingly get a quote from either carrier unless it was a specific request from a customer - and I had tried to persuade them to an alternative.

Due to demand, brand, and reach, Agents have to put up with the antics of the RBOCs. The training, the ever changing rules, segmentation, commission nightmares, etc. due to demand mainly. Think about that.

Now the RBOCs are clipping copper and petitioning the FCC to relinquish regulations. That's another post. The RBOC's still have a monopoly mindset and hate competition. They suck at competing without cheating. VZ decided they couldn't beat cable, so they JV-ed with them. AND the FCC let it happen!!!

To me this means that cable companies in some areas will become the de facto service provider. The monopoly mindset that is prevalent inside the RBOC is also prevalent inside the MSO. That mindset means that sharing sales with an external group is unnecessary.

Many direct sales execs in MSOs resent the channel and dislike wholesale. Hmm, where have we seen that before?

Several of the top MSO's would rather have a referral program than a full fledged Agent program.

A couple of them will have trouble justifying the growing line item of commissions on the balance sheet - just like ILEC's do.

Some channel heads think that VARs make better partners because they aren't just selling commodities. I can't see the difference between a VAR selling a broadband circuit with his managed IT or backup service and an agent just selling the broadband circuit. To the carrier, the sale is the same. The piece I agree on is that the Agent has to be selling more than just broadband and voice. To make a decent living, Agents are going to have to capture more of the telecom/IT wallet per customer going forward - and those services can come from a vast array of service providers.

I have much respect for Michael Fair at Charter and Craig Schlagbaum at Comcast. Agents need to be diversified and have multiple streams of income (from multiple service provider types - SAAS, transport, backup, transit, voice, IAAS, MDM, etc.)

Promises Broken and Unenforced

2012-11-19T02:21:06Z

When SBC went to buy BellSouth in 2006, then CEO Whiteacre assured Congress that the merger would be good for consumers and broadband. [HuffPro has a good story about it]

This has been the trouble with the FCC: the FCC has a poor record of merger conditions enforcement.

If this was the EPA, we would have pollution. If this was the FDA, we would have drugs killing people. Oh, wait.

Anyway...

We have a failed policy of competition that comes straight from the FCC. Granted that is a political organization with a change in thought every election. But when you consider the billions in Universal Service, RUS loans and grants, and the BIP and BTOP spent on telecom, especially rural telecom, why isn't creating a competitive environment Job 1?

Meanwhile, TheVerge is reporting that due to Storm Sandy, Verizon is taking the opportunity to cut whole copper lines. That's right, CLEC's out of that Central Office are now effectively screwed -- and so are their customers. Verizon's Executive Director of Operations, Christopher D. "Levendos says it's "far too tedious, time consuming, and not effective of a process to try and put this infrastructure back together," so Verizon's taking the opportunity to rewire with fiber optics instead."

Failed Policy.

CLEC's like TelePacific, MegaPath, integra and XO have spent tens of millions on EoC equipment from ADTRAN and Overture to provide mid-band Ethernet to the SMB marketplace nationwide. That investment is in jeopardy. The ripple effect of consolidation, lack of competition, and copper clipping will lead to many more layoffs, lost market and investment value, even less competition and the loss of hardware vendors as well.

Despite the RBOCs saying they are spending billions to build out fiber to replace copper, are they really doing it? Not really. With a contract in place, they will take 90-180 days to build out fiber to a customer. But overbuilding of copper stopped with the FiOS project.

This hurts the economy and competition. And it actually hurts the RBOCs. More CLEC's means more revenue (in wholesale dollars) and more feet selling against cable, who until recently were the enemy. Now, however, VZW and the MSO's are co-marketing!!! The FCC has basically punted on their responsibility. Nice job Julius, Kevin, and Michael.

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?

Duopoly Now Offering Home Automation and Security

2012-05-07T19:21:50Z

Comcast, Bright House Networks, Cox, TWC, Verizon and now AT&T are offering home automation and security service. BHN and VZ are competing in the Tampa Bay market for all consumer services - voice, TV, broadband and now security.

"Bright House Networks' system does provide home security, it also helps users manage and monitor their energy, lighting and home appliances via the touchscreen. The security cameras connect to the touchscreen via Wi-Fi, while the rest of the peripherals in a home are connected to it via ZigBee." [CED Mag] BHN has a similar system as Cox, Comcast and TWC. These cablecos sure know how to volume buy this stuff. Home automation touchscreen, wireless security cameras, lighting modules, thermostat, motion detectors, window/door sensors, key fobs, and more, all available from your mobile apps. Notifications are available via email or text. "AT&T's technology comes from Xanboo, a company it bought in late 2010."

I guess this becomes the next playground for the Duopoly, competing against Tyco's ADT (which is a roll-up of Broadview/Brinks and ADT).

What Competition?

2012-05-01T20:19:21Z

In this article about independent ISP's fading away, CenturyLink talks about competition of ILEC DSL - from cellular 3G/4G, muni Wi-Fi, and cable. There's also fixed wireless in some ares from independent ISP's, but that is mainly in areas without competition.

But competition is a myth today. VZ is co-marketing with cable now. The Duopoly isn't even competing any more!!!

According to Akamai's State of the Internet report, "The U.S.'s average connection speed is 5.8 Mbps -- a 14 percent increase from the previous year." That's thanks to FTTX and DOCSIS 3.0 mainly.

BTW, Customers prefer flat-rate pricing in study after study.

"In other words, the broadband cap may have less to do with managing congestion on Comcast's data network than with making over-the-top video services like Netflix and Hulu unattractive for heavy television users who are the most lucrative customers for Comcast's paid video services."

Would we even have a cap if we had true competition? Probably not.

With consolidation in the telecom industry, there aren't many players left. In many markets, it's ILEC versus cableco, except where they are co-marketing! Lots of OTT (over-the-top) but I'm not sure how much longer they are allowed to survive.

In the B2B space, lots of consolidation, but cablecos are buying up market share with cheap pricing. It's interesting, because I'm not sure how much longer the nationwide CLEC will be relevant. Everyone is competing for the same dollars: federal and state government, Fortune 5000 and Enterprise, and the multi-location customers. These are a limited supply - maybe 110,000 customers??? But in the small business space there are 5.2 million businesses with under 20 employees! Who services those accounts? That's where all the growth and opportunity is. Unfortunately, broadband and VoIP have cannibalized the pricing structure in this market. It will have to be a bundle of more than data and voice that wins here.

It's also expensive to market and sell to this space - and to support this space. That means it has to be more than voice and Internet, so that the monthly recurring is high enough to rate the work required. We'll see who steps up there.

US Government Suing AT&T for Fraud

2012-04-26T14:49:58Z

Is Fraud rampant at Ma Bell?

ARS wrote an article titled, AT&T collected millions from taxpayers in fraudulent charges, US says. "AT&T improperly received millions of dollars from a government reimbursement fund by ignoring fraudulent use of the IP Relay call system provided free of charge to hearing- and speech-impaired US residents, the US government alleged this week."

Another item ripped from the headlines:

DOJ Sues AT&T For Not Keeping Scammers Off Deaf Phone Service

CRN reports, "The Justice Department this week filed a lawsuit against AT&T on the grounds that the carrier did not do enough to keep international swindlers from abusing a government-mandated service that allows deaf people to make free calls to hearing people via text message over the Web, Reuters reported this week.... The FCC reimburses carriers for the service, to the tune of $1.30 per minute. However, the Justice Department claims that the vast majority of callers using the service were fraudsters in other countries, and that AT&T did not take measures to stop this from happening."

"This claim was initially made in a whistle-blower lawsuit against AT&T brought by a former call center employee, according to Reuters".

Too big to fail also means too big to know what is going on.

This is but a symptom of how poorly managed these big companies are. It's all about the stock price. When you have $64 Billion in debt, you need to watch the stock price or your debt starts costing more. One percent is $640 million extra. But you can be a slave to it or everything else falls apart.

AT&T is facing competition from VZW and the cablecos. If the SpectrumCo deal gets approval from the FCC, VZW will be co-marketing (read colluding with) three MSO's to take revenue from AT&T. All the mass markets are flat: voice, TV, cellular and broadband. It's a game of take-away now. That's expensive. So customer acquisition costs increase. Subsidies on cell phones go up. Everything goes up except ARPU! Do you see the problem?

If any other cellco - T-Mobile, Sprint, MetroPCS or even Tracfone - could get its act together, it would add pressure. The MSo's have their act together and are winning the battle for the SMB space under $500. The CLEC's used to own this business, which meant wholesale revenue for the ILEC's (Qwest, VZ, ATT), but even that revenue will start to decline as less T1's are sold by the CLEC's.

Wireline revenues, especially DSL, are in decline. Where does the new revenue come from?

Windstream and CenturyLink made big moves to counter their wireline shortfalls. What have the RBOC's done? Mainly gone cellular including spectrum acquisitions. Comcast bought content (NBCU). It's a race.

Short note for CLEC's: if wireline is declining and the sub-$500 customer is going to cable, what are you going to do?

One last note: VZ already had a union strike and had to settle. ATT is in the midst of negotiating a CWA union contract. How does that help or hinder future growth? For VZ, VZW and FiOS are non-union shops.

Get Off the Agents' Back

2012-04-12T21:48:50Z

These were my thoughts on the 2011 CPZ that I was a panelist on. These are my thoughts as a reaction to the latest CPZ.

Surprisingly, not everyone read my post about how the whole telecom eco-system is shifting. Agents, Masters, Carriers and Cloud Providers are all going to experience a Shift.

Did you ever see Shift Happens?

Considering all these factors - Quota, Debt, declining revenue, pricing pressure, and flat markets - the future does not look bright.

Most of the people who were talking on the CPZ 2012 video about transactional agents are not actually agents and to my knowledge never have been.

Does a subset of Agents shop masters? Probably. On the other hand, I know masters who shop to sub-agents with "I'll give you another point or two to go with me." Part of this is due to the weight of quota on the Master Agency business. Master Agents are under a tremendous pressure to hit quota to keep the support level and sustain the commission revenue at its current level. So don't get mad at the Sub-Agent when Masters are doing it too.

Value and Telecom

The whole Industry talks about VALUE, but can they describe it? No. Our Industry has been a series of me-too, arbitrage bandits selling the same thing: UNE-P, Integrated T1, SIP Trunking, and today it is MPLS. It's all just similar looking and sounding services. How does an Agent or a Prospect tell the difference?

Branding is non-existent in our space, except for the Duopoly of ILEC and MSO. You create value with branding. Other value comes from benefits and differentiation. We are lacking the Differentiation.

Without value, it becomes a commodity. Commodities are price shopped. Tell me the difference between any two Internet T1's or any two SIP Trunks.

Carriers are Unhappy with Agents

Just because Agents don't act like you want them to doesn't mean they are all in the wrong. You built this current eco-system. Now you want the ship to turn on your say so. Easier said than done, pal.

Truthfully, have you done all you can to give Agents the tools they need to sell your product? Not to be repetitive, but have you established your value statement? Do you know who the target market is? Do you know what triggers the sale? Who is the actual buyer? Answer those questions first.

The Industry wants the Channel to go upstream, except they don't. By that I mean, the carriers want revenue. Period. It's all about quota. While they might want an Agent to sell MPLS, they aren't turning away T1 business either. However, they want the Agent to turn away from that business to go upstream. Yeah.

Keep in mind that it might be that the marketplace doesn't want to go upstream either.

Right now, Cable is doing an excellent job of disrupting the market and stealing business with cheap loops.

At a CLEC training, it was stated that cable would own the sub-$500 business. It sounded like they were conceding it. The cablecos will become the de facto ILEC's. I have no idea what the ILECs are going to do. Only the 2 RBOC's have a cellular business. And CLEC's will probably run into too many problems to continue to sell network access.

In that same training, the CLEC stated they wanted Multi-site, multi-access business. Unfortunately, everyone wants that business. Masergy, Smoothstone, EarthLinke, Megapath, Netwolves, Wind, CenturyLink - just to name a few. To hear carriers talk, I guess, MPLS is the new Integrated T1 (in every way). They say there is more margin in it. No there is not. There is more revenue per customer, but they will have to give away margin to (A) hit every site and (B) win the business in a hyper-competitive marketplace.

No one buys the way most service providers sell either. That's why the carriers are always searching for Consultative Sales Professionals. The whole industry sells what they want - and it is followed up by a series of me-too. Just because one CLEC is selling Managed Security does not mean that the marketplace wants it or will buy it or that it will want it delivered that exact way. It also doesn't mean that the next eight CLEC's or service providers need to market that same offering. Do we know what the marketplace is expecting?

How Things Can Shift

One thing that could cause a big shift is if Tech Data becomes a Master Agent. With TDMobility, they already have the platform and are selling cellular in a Master Agent model. Plus by offering mobile device management, TEM and all that hardware, they have caught up to the big Masters. CDW could become a Master Agent if they wanted to - and they might have to in order to sell more hardware.

Dell could become a Cloud Provider. As it stands now, they are an MSP Enabler. And Dell is selling CDN now! It will be interesting to see what Ingram and SYNNEX - both betting on cloud services for their future - do to not have to compete with Dell head-to-head, while also competing with Tech Data.

I don't think that most telcos will make the shift to managed services and cloud successfully. It's labor intensive. It doesn't scale like telecom. They think they can automate everything, but that only works for cookie cutter stuff. Plus they can barely deliver telco services without a headache. I think MSP's will win this war. Any company that can integrate apps (like CRM and invoicing with Exchange and Sharepoint) will be successful. If they partner with VAR's who can handle the on-going maintenance and support that all this technology will require, they win big.

Can the Channel change to become Trusted Advisors? Probably not all of them. Selling Cloud is different than selling telecom. Period.

The Channel basically sells replacement services. Here are some examples: VoIP for POTS: SIP Trunk for PRI; Ethernet for T1. Each transaction is replacing like for like. Even MPLS is just a replacement for Frame Relay, ATM and IP-VPN.

That is why selling Hosted PBX and other cloud services are so challenging: It is not a simple replacement. It's not like for like.

The sales process for selling replacement services is pretty easy. When the sale becomes about business process change or fork-lift upgrades (like Hosted UC or Virtual Desktop), the sales skills are different. The sales cycle is different - and longer. Provisioning takes longer. Ultimately, commission payments are much later.

This is really important to remember.

Selling Cloud and Managed Services will not just be more of a challenge, but it may be less satisfying. Why? Transactional sales types are motivated and driven by quick hits and a lot of ink in a month. Extended sales cycles are less motivating to this type of sales person.

Moreover, as commissions decline with the price decreases, agents have to sell more and more to maintain their revenue goals. Shifting to new products, new sales skills, and a different sales approach will be a huge leap, especially without training, a financial cushion, a deep desire for change, and vendor support.

Agents are not FARMERS! They are Hunters! They do not do Account Management, cross-sell or upsell to the base. Smart agencies will higher a couple of farmers to work the customer base and perform account management.

All of this makes me wonder who will be the Agent of tomorrow, who will be grooming accounts and performing consultative selling of complex solutions to their customers?

Comcast Versus Netflix

2012-03-20T18:01:27Z

IN a Fast Company article, titled "Why Comcast Will Crush Netflix". Comcast will be launching a Netflix killer soon. Why? "The battle to own the "digital home" has been waging for years." The Duopoly does not want to be relegated to being just dumb pipes. The money is in Layer 7. The Duopoly is tired of a static ARPU, while Google, Apple, Amazon, Netflix and others make money over-the-top.

The Duopoly has spent big money on TV distribution - AT&T on U-Verse, VZ on FiOS - and do not want to lose revenue due to cord cutting.

Content providers are already offering shows on their own websites plus online TV sites like Hulu, Amazon, Apple iTunes, Netflix or Epix. This competes with cable TV and DVR.

Hollywood doesn't know what to do. It sided with Blockbuster over Redbox and Netflix on access to titles. "Netflix will lose its rights to carry Starz video content." It's all about the content. Period.

"Cable companies have historically played the tortoise to high-tech innovator hares. They adopt a predictable pattern--they let someone introduce a new service, watch the market grow, and much later step in and take away the opportunity. This is how cable companies beat out TiVo (which introduced the world to the DVR) and Vonage (which convinced Americans to embrace VoIP)."

This is an important lesson for service providers.

It's a good read.

BTW, cablecos are really pushing into Business TV, even allowing the Channel to sell it. That's one way to increase TV revenue. I would guess that DBS (DirecTV and DISH) are losing accounts here. MSO's are even chasing hotel/motel TV business.

Has Verizon Stopped Repairing Copper?

2012-02-17T21:08:18Z

Over and over, I am hearing that Verizon has given up on copper. From repair issues to DSL to stripping copper out when FiOS is installed, the story seems to point to VZ looking to forget its copper plant.

in a discussion on LinkedIn about SLA's, one agent had this to say, "The absolute WORST cases I have seen have all been in the northeast where Verizon's copper is concerned. Verizon seems to have made the decision to put all efforts and funds behind their fiber build out (a good thing) but have completely sacrificed the quality behind their copper services such as T1. If your copper T1 goes down in New York, you might has well throw your hands up in prayer, because that's the only thing that will get it fixed."

Another commenter wrote, "Verizon in some places is actively ripping up copper as they lay fiber because they are not required to resell fiber to CLECs and ISPs at wholesale rates." This has been widely reported, because VZ doesn't want the expense of running to networks - copper and fiber. Plus the fiber doesn't have to be shared and the copper does. The copper means competition. Fiber means they just have to worry about cablecos, who quite frankly are kicking their butt.

Wholesale used to be a healthy business for ILEC's. Today, neither cablecos nor ILEC's want to wholesale anything. In fact, clients of mine in VZ regions have a lot of issues.

For example, "We had an outage about 3 weeks ago that lasted more than three days. This also affected [another local ISP] as I spoke him last night about the current outage. We [both have] a bunch [of customers still] out of service as well. They have been out of service since Monday. The last outage caused an exodus of customers and this one will do the same. Our guys have put in tickets, called to escalate many times. .... no one at VZ will listen. Ever. They simply close the tickets that we open."

It's a systemic problem - widespread - from the C-Suite down - the story has been that every company -- even wholesale customers - are the enemy and the Union and on-union workers must do everything they can to make it uncomfortable unless you are a direct VZ customer.

We have the case of a BK CLEC who had recorded conversations with VZ employees soliciting a customer who was down saying that it wouldn't happen if they were with VZ. [This has been a problem with both RBOC's since I got into telecom in 1999.]

Verizon faces up to $400,000 in fines after New York's Public Service Commission accused the company of not making service repairs in a timely fashion.

What do you do when the RBOC doesn't want to wholesale, doesn't want to repair, and just looks at the bottom line and the few metrics that Wall Street analysts can understand??

Many states don't even regulate the ILEC any more, so what do they do? It becomes the job of the FTC, the FCC and the court system. Talk about a deck stacked against the customer!

When our underlying telecommunications structure suffers, so too does our economic growth.

here's 2 problems with a fiber only strategy for an ILEC:

One, fiber goes out with power, so no 911 or dial-tone when the lights go out.

Two, the installation period for fiber is wicked long. Copper can be installed within two weeks. Fiber takes months. That hurts businesses. I have one moving in 3 weeks and to get 20MB of bandwidth he has to wait months. That won't work.

Ever think that just nothing in this country makes sense any more?

In the discussion about SLA's, the conclusion is to convince your clients to buy redundancy: 2 pipes. That's nice in theory but not in reality. The thing is that you have to set the expectation that if Internet or VoIP is integral to their business operations, no SLA is going to save them, redundancy and business continuity planning will. Otherwise, an outage will be a disaster that they have not planned for. It is not IF, it is WHEN.

Verizon Puts the Move on Video

2012-02-06T15:26:03Z

After Verizon's CFO sais that FiOS was a poor economic decision for the company, I would think video would not be on the VZ radar. The FiOS TV service is so expensive to deliver that Frontier raised rates over 70% when it took over former VZ FiOS territory -- and then decided to switch all the TV over to DBS.

Comcast buying NBCU was a little different, but cablecos have owned channels before, especially sports channels (MSG, YES, BayNews9).

Maybe the TV-cord-cutting crowd is scaring the cablecos, despite the rhetoric to The Street. Content is expensive to license and to deliver. And getting more expensive all the time. Meanwhile more video is being delivered as bits and bytes by Netflix, Amazon, the networks (USA, Comedy Central, ABC, CBS and CW - all have shows that can only be seen on-demand from thier website) and apps (HBO-on-the-Go and TWC Anywhere, for example). This means that TV revenues WILL decline.

How does the Duopoly make up the money and pay off the $250 Billion in debt it has accumulated????

Metering is one way. It increases the ARPU.

BTW, I find it interesting how the RBOC's have basically given up on DSL.

So VZ is now partnering with the Coinstar subsidiary, Redbox, to launch a video streaming service to compete with Netflix, Amazon, and Hulu.

This means that ATT will HAVE to go after DISH. Why? The wireless spectrum primarily but also DISH owns Blockbuster, satellive TV service, and Slingbox. Telco is a me-too industry. Unless ATT is going to abandon theh consumer space, relinquish it to the cablecos, it will have to make a move soon.

While Echostar owns Hughes Communications, the DISH company bought up spectrum from DBSD and Terrestar that DISH plans on utilizing to offer a hybrid satellite/terrestrial mobile broadband service. Today, DISH has a market cap of almost $13B, while Netflix is at $7B. Since spectrum is finite and like real estate, the extra $6B seems like a steal. Consider that AT&T bought spectrum from Qualcomm for $2B. That spectrum, which, according to Huffington, "Qualcomm stands to make a handsome profit on the spectrum. It paid $38 million for one slice of nationwide spectrum - the former UHF channel 55 - in 2002, then another $558 million in 2008 for UHF channel 56 over New York, Los Angeles, Boston, Philadelphia, and San Francisco." Qualcomm was using that spectrum for FLO TV, which failed. It consists of six D-block and five E-block licenses in the Lower 700 MHz band, giving AT&T post-transaction holding between 6 and 80 megahertz of spectrum below 1 GHz. Holding is key, because, like all cellcos whining about spectrum, AT&T HAS spectrum it has not deployed.

AT&T says it needs the spectrum, especially if VZW gets the SpectrumCo deal to go through whereby VZW buys all the AWS spectrum from the cablecos. So do the Rural Cellular Carriers. Makes DISH a big target for acquisition. However, Charlie Ergan still owns 51%.