Enterprises buy a variety of computing services from public to private along with VPS, hosting and everything in between. "It's easier for enterprises to develop, test, operate and migrate workloads across hybrid architectures when the CSP's public and private cloud code base is the same, or at least virtualized and functioning identically." However, they cannot procure this variety from Amazon or Google. They would to go to the likes of IBM, Microsoft and Oracle.
"Consumer tablet demand continues to shrink. Apple is the only manufacturer seeing an improvement in buying." Not good news for the cellcos.
"Future data centers will include technologies such as advanced data center management software, distributed resiliency, prefabricated modular (PFM) components and dexterous robots." Meanwhile Telcos are exiting the data center business (WIND, C-Link, VZ).
PE firms own many of the data center companies, including Peak 10 which acquired Via West from Shaw today for $1.7 Billion. In addition, Dupont Fabros merged with Digital Realty. That is along of transactions and consolidation in the space.
Upgrade those pipes!
Cisco's report on Internet traffic growth is out with many pretty graphs. "Globally, Internet traffic will grow 3.2-fold from 2016 to 2021, a compound annual growth rate of 26%. Globally, Internet traffic will reach 235.7 Exabytes per month in 2021, up from 73.1 Exabytes per month in 2016. Global Internet traffic will be 7.7 Exabytes per day in 2021, up from 2.4 Exabytes per day in 2016."
What is an Exabyte? "Global Internet traffic in 2021 will be equivalent to 707 billion DVDs per year, 59 billion DVDs per month, or 81 million DVDs per hour. In 2021, the gigabyte equivalent of all movies ever made will cross the Internet every 1 minutes."
According to Akamai, "Slow IPv6 adoption is a conundrum in light of IPv4 address exhaustion." Global Average Internet Connection Speed = 7.2 Mbps. Yet "U.S. speeds averaged 18.7 megabits per second compared with 28.6 Mbps for global leader South Korea." Most of that is cable modem download speeds since MSOs have the lion's share of broadband customers in the US. DSL is dragging us down.
The Duopoly is looking to strip Net Neutrality rules, claiming they stifled growth. OOPS! "Broadband speeds have soared under net neutrality rules, cable lobby says."
"Fiber is basically the nervous system of the networks of the future," Malady said and Verizon is making big investments in it." Good insight.
]]>I try really hard to avoid cablecos. They don't like the Channel; they don't like wholesale. It seems that direct sales reps can get pricing much faster.
Unfortunately, cable is chasing market share by practically giving away services. So with that in mind I had to get a quote for a EPL between Nashville and Tampa. This would involve Comcast and Charter. Let's examine the timeline:
Request for quote enters the system on 3/15. On 3/21 Survey shows FL location serviceable with construction. Sent email for pricing. On 3/28 after buffing them, I get "budgetary" pricing. On 4/3 client asks for contract. On 4/26 I am still waiting for paperwork and the "formal" pricing.
How does a company who "As of December 31, 2016, Charter's network passed 49.2 million homes and businesses, and served 26.2 million residential and small and medium business ("SMB") customers" take so long to price and run contracts?
I know it would be an effort but there's this thing called Google Earth that you can use to map your network, so every site survey doesn't take days. MasterStream has a pretty good interface for quoting. There are tools in this cloud age to take some fo the friction out of the process - if anyone actually wanted to.
This raises some questions:
I can't even fathom what a Desktop as a Service process must be like now that Navisite is under the Spectrum umbrella.
I know this looks like a bully pulpit kind of blog, but I can't be the only one who finds this ridiculous.
It gets better. One of the Tier 1 ISPs agrees to sell my customer a 1GB pipe that goes to Atlanta from Jackson, Mississippi. Route diversity was needed for my client, an ISP and VoIP Provider. Turn up took 111 days on a lit path. The Tier 1 ISP used Uniti Fiber for the loop. It was a mess.
The CFA (facilities assignment inside the central office where my client is collocated) was ignored, which created the first of a number of problems. TTU (test and turn up) was basically, "We plugged it in!" Repair had to be engaged to get it to work. (A new NID had to be installed.)
BGP took an extra week to get working properly. It only all started working properly yesterday. It was ordered on 12/19/16.
And the client says it routes to Dallas, not to Atlanta. Fantastic.
I turned up another circuit with an ILEC. It was a 20 MB DIA, but I guess 20x20 had to be specified, because it came up at 18x6. I don't even know how you make these kind of mistakes. This was noticed on the day after turn up, but we had to go through repair to get it fixed after the turn up engineer ignored all emails for 3 days.
What the hell is wrong with telecom that they can't just do the job they are hired to do? Every day we hear about airlines having big issues, but telecom firms have even more problems. I think it is just that we EXPECT them in telecom.
All I keep thinking is: If they can't deploy Internet pipes correctly in a timely manner, who would want to try using them for something complex like IAAS or security or UC?
And let's let them do more M&A! Everyone of the carriers listed has been involved in M&A in the last year. All of them suffer from the integration -- or choose to blame it.
]]>They are jumping on the bandwagon for a number of reasons.
One is Consolidation. The new landscape of Ethernet is cable and ILEC. The CLECs are mostly all gone. You have to expand the catalog beyond just network operators and VoIP.
The other reason is price pressure. Pricing across all telecom products - mobile, bandwidth, Ethernet, VoIP - has been declining about 3-10% year over year, creating a problem for the operators and partners. When pricing craters, you have to sell more and more and more to maintain the same commission level. At some point, just selling network isn't going to work because you can't close enough deals or even fill a funnel fast enough.
When 1GB pricing is less than what 10MB pipes were just six years ago, think about how much you have to sell and how fast.
Even the current price war in VoIP/UC isn't helping. Because there isn't enough Demand for UC - the demand is for POTS replacement and dial-tone - the price per seat has dropped. It hovers just below $20 right now.
I understand that the customer wants the cheapest price - and it is easier to take the order when you find the lowest price - but you have also just lowered your commission.
Providers are starting to cut commission points when they lower the price. Partners and Channel Managers aren't happy. Well, then sell it at rack rate.
So carriers consolidation means fewer vendors and pricing compression means less overall commission. More vendors are needed. Luckily over 600+ vendors have entered the space in the last three years while more than one-quarter of the partner channel have moved on. Retirement, M&A, and business shift/pivot have resulted in a lot less sales partners at a time when there are so many more vendors to choose from.But to be realistic choosing a UC vendor among the 2000+ available is like picking Red Delicious apples at the grocery store. They all look the same. How many do you want to smell and test for firmness before you pick one?
The cloud computing piece, as we found out two weeks ago, is owned by Amazon. AWS and S3 are hosting about one-third of the web!!!! Rackspace, CenturyLink, Azure, Google Compute, IBM/Soft Layer and the others haven't really stepped up their marketing game (even in the wake of Amazon's outage.)
Businesses are moving to SAAS, IAAS and other computing environments. Partners are in a position to offer assistance to businesses in this regard. It is uncharted territory for many, but the business model has shifted to wallet share. If you want to survive (and thrive), it is about getting more wallet share from the customer. That means selling them email, Office365, VoIP, colocation, security and more on top of the network and bandwidth that makes up the typical sale.
We have seen a number of press releases in the last 4 months about SD-WAN - mainly about SD-WAN providers signing up with carriers and with master agencies. SD-WAN the new UCaaS!!! This technology could be the next big thing, but they said the same think about IP Centrex (VoIP) over 15 years ago and about WebRTC.
Our biggest problem: We push Product. That's right. We are a bunch of Product Pushers. We would make ideal drug dealers because we don't create demand, we just push a product on someone who wants it.
We don't sell Solutions. We don't even offer Solutions. The vendors don't offer solutions either. They pimp products. It makes all of this really hard to sell.
]]>One big story was Google Fiber laying off and the CEO quitting. I tend to agree with Beranek on this: Google didn't want to be a network operator. They just wanted to scare the Duopoly into building out broadband networks, so that Google could get more page views a la YouTube.
People don't understand how much obstruction the Duopoly has in telecom. From lobbying to lawsuits, the phone and cable companies hate competition. They do everything they can NOT to compete. So given an upstart - Google Fiber or Covad or a muni network proposal - they go to town throwing up hurdles to success. Big is Bad for Consumers. Period.
The Election: Not getting political but it looks like Net Neutrality will be rolled back. Soon the 4 cellcos will make it look like 1996 again when it was Prodigy, AOL, CompuServe and DELPHI. Walled gardens are coming back. This will make it harder for any new entrants to get a foothold.
Devices: It was the year of device panic from Samsung's blowing up to Apple eliminating the earphone jack. Add in the mix, the hacking of the IOT devices used for DDoS attacks against Krebs and DYN. It was 100K hacked cameras and DVRs that took down the Internet in October. It is only going to get worse. For a society obsessed with guns, why don't we protect our information and devices? The Info War is going to set you back.
BTW, did you see that Quest Diagnostics was hacked? 34,000 accounts. Would you want your medical history online?
It was the year of hacks. Just ask the DNC.
Hacks and outages all year.
A lot of noise about Fake News (true), self-driving cars (almost) and SD-WAN (soon).
It was the Year of Uber. Of all the ride sharing apps including Lyft, Uber seemed to dominate. Close to 25 ride sharing apps have been funded to date, but it is Uber that leads the race, despite famous battles with cities around the globe.
VR got bigger (just as Scoble!) But like Augmented Reality, other than entertainment and early adopters I have no idea who is paying attention.
IOT was big. Everyone is still trying to figure it out. Or more precisely figure out how to monetize it for themselves.
Speaking of which, IAAS has blown up with one clear winner, AWS. At $13 Billion in revenue, it is all of the profit that Amazon shows. Rackspace, a rival, went private this year when a private equity firm acquired them for $4.3B. Like Dell, going private allows them time to pivot without the stock market beating them up. And speaking of Dell and pivots, what a year they had buying and selling. If the smoke ever settles in Austin, it will be an interesting story.
Artificial Intelligence is something I tend to think of as analytics and data mining. (We went from Big Data to AI.) From Siri to Alexa to IBM Watson, AI is entrenching in our world. A doctor friend uses Dragon Speak Medical Edition to transcribe his notes into the EHR system. That's the kind of tech we need.
Microsoft added its Skype real time translation service to cell phones and landline. In a global economy, this will be a game changer. And this is on top of Skype4B crashing past 50 million seats.
What else did we see a lot of? UC&C or UCaaS. So much of it. But when you have 2000+ companies plus thousands of resellers trying to gain some ground, the noise level will go up. Most of that noise is pure hype, spin and hullabaloo. More on that in another post.
Is there anything I missed? Is there something you are watching? Let me know.
]]>Telcos spent billions on both fiber and TV services. [Verizon reportedly spent $23 billion rolling out FiOS since 2004, some of it from rate hikes, some from government subsidies.] Unfortunately, by the time telco TV, like Windstream's Kinetic, is widely available cord cutting is accelerating.
From DSLR, "Telco TV and satellite TV providers saw record pay TV subscriber losses last quarter, according to the latest analysis by Leichtman Research. According to Leichtman, the pay TV sector lost about 210,000 subscribers last quarter, though this figure is dramatically lower than the 430,000 subscriber net loss stated by Wall Street research firms like SNL Kagan. While traditional cable providers "only" saw a net loss of 90,000 video subscribers last quarter, the telcos were particularly hard hit, losing 375,000 video subscribers last quarter -- compared 45,000 during the same quarter last year."
In the broadband realm, "Cable companies added a net of 775,000 broadband subscribers last quarter, compared to a net loss of 150,000 broadband subscribers during the same period," writes DSLR. [see chart here]
For consumers, it is all about the Internet and smartphones, according to Pew.
Telcos didn't want to get into the DSL game. Mainly to protect a highly profitable T1 business. The same way they threw obstacles at Google Fiber, the LECs threw obstacles at the newly minted DLECs - NorthPoint, Rhythms and Covad. Sure, some of it was incompetence on the part of the DLECs and GF, but the hurdles kept tripping them up. After they all filed bankruptcy, the RBOCs decided to get into the DSL retil game, to the chagrin of the independent ISP, who was finally making money on DSL. Undercut by the vendor, many ISPs failed or limped along for years, which affected many small businesses as the ISP was usually the local computer expert and Internet Provider. This was something that the LEC could not provide: personal service to the small business. To this day, the Duopoly can only supply commodity service with almost non-existent support. As they have gotten bigger and bigger to take advantage of scale, the support to the small business has suffered.
Small business is 99% of the businesses in America. Yet every provider wants to go up market.
There are almost 28 million small businesses in the US and over 22 million are self employed with no additional payroll or employees (these are called nonemployers). Over 50% of the working population (120 million individuals) works in a small business. But it is under-served by the Duopoly.
From the FCC's 2016 Broadband Report:
Think about those numbers. VZ spent $23B. Other telcos spent billions. The FCC donated billions in BTOP, BIP, ARRA, CAF, CAF II and USF funds to the effort to build out broadband across America. Private companies (PCOs, ISPs, WISPs and CLECs) have invested hundreds of millions more. Cable dropped bilions. Yet not everyone has good Internet????Or a choice of more than 1 ISP?
I have to wonder where this goes. The telcos spent billions to get triple-play just as that bundle becomes undesirable. They now have to build out fiber to stop losing broadband subscribers, so more hundreds of millions. At a time when their debt is High - and the pies for TV, broadband and voice are stagnant. Even cellular has peaked.
They are all chasing Enterprise, which I imagine means 500+ employees. There are only 30K businesses in the US with more than 500 employees. So Comcast, Charter, AT&T, Verizon, CenturyLink and Windstream are fighting desperately over the same 30,000 businesses and government contracts. With VZ acquiring XO (approved today); C-Link acquiring Level3 (ugh); and WIND Buying EarthLink, that leaves Zayo as the sole big indie.
What happened? Bad short-term decisions that cost jobs, revenue losses and more CAPEX spending than if they had just done it from the beginning. To still see announcements from the telcos about Gigabit deployments in select cities is just plain sad. The monopolies that were the Bell companies re-constituted but lost their edge. It's like they don't know how to compete at all. They just lean on their brand and hope for the best.
EoC wasn't widely enough deployed and sold. Yet everyone is banking on SD-WAN, which will likely just make SLAs crumble.
Small business has suffered from this mess -- and further with the mega-mergers and consolidation. Small businesses - all businesses - rely on telecommunications to do business. The Internet is vital to our economy. Let's hope we don't stifle it anymore.
]]>CenturyLink just sold off its data center business that was a combo of Qwest Cyber Centers and SAVVIS to a group of PE firms for $2.15B in cash and C-Link keeps a minority stake worth $150M in the new company. CL bought Savvis for $2.5B in 2011. Buy High; Sell Low. Bell-Head Mentality.
The PE coalition that bought the data centers also grabbed 4 cyber-security firms in order to announce this global security co, to be run by Manny Medina, former CEO of Terremark Worldwide.
Wired's headline says it best: The World's Telecoms Are Under Threat From All Sides.
Broadband, cellular and voice are all flat or declining markets.
IAAS and PAAS are ruled by Amazon, IBM and Google. Microsoft only got into the game recently and is doing better than all the telco's combined.
PE firms are buying up data centers as the world adjust to cloud computing, an app market and streaming TV and radio.
DDoS attacks are happening too often. So are Hacks. There are not enough fingers to fill all the holes in this dyke.
UCaaS is ruled by 8x8, Vonage Business, RingCentral, Fuze and a bunch of other providers that are not a telco. The PBX market may be shrinking but not fast enough for the other Hosted VoIP players. Cisco and Microsoft have chunks of the enterprise UCaaS business that the telcos don't.
Comcast Business is at $6B in annual revenue, which makes it a bigger CLEC than almost all that are left. WIND does $5B. EarthLink less than $1B. Birch and TelePacific are private. Level3 does $8B. CenturyLink does $17B (much of it ILEC revenue). Zayo is $2B.
Apps like Messenger, WhatsApp, Skype and Slack are replacing voice and SMS and even email. It is a topsy-turvy world. What's a telco to do? Well, merge! Get bigger because bigger solves nothing, but it makes money for top execs in the C-Suite and the Board room and on Wall Street.
Our economy spins on e-commerce and the Internet. When the companies that provide that Internet are too clunky to do it properly, what happens to our economy?
We went from a five nines voice network of reliability to cell phones and VoIP that quite frankly can't be more than three nines. Have you noticed the number of outages lately by telcos and cablecos?
There is a lot going on. There are many areas of opportunity, but the fall back from these guys is "more of the same", "do what I know" and "one more quarter!". None of these transactions is good for the industry, the economy or the consumers. They are stop gap, short term money movers. We are going to wake up shortly and realize that it is 1970 all over again. It makes the NSA job easier when there are few players, but what about the customers?
In the data center space, one master agency contacted me after the C-Link announcement to tell me that the folks at CenturyLink have no details about the sale. How can that be when Monroe has been trying to sell the DC division all year? Great planning, guys!
Whose customer is it? Will the agent still get paid? Will the customer see a price increase? Who is the billing entity? Who will the customer be paying? These are good questions that bothered some TELX customers when Digital Realty took over.
I keep seeing executives at master agencies say these deals are good. Do they say that in print because they have to?
Don't forget that you can leave a public comment with the FCC on any of these mergers. You can voice your opinion here. You will need a docket number but you can google it after the filings are in the system.
]]>"Today, nearly 40 percent of American households either do not have the option of purchasing a wired 10 Mbps connection or they must buy it from a single provider. Three out of four Americans do not have a choice of providers for broadband at 25 Mbps, the speed increasingly recognized as a baseline for broadband access."
The discussion revolves around - surprise - arbitrage! There would be investment IF there was enough money in last mile residential; if regulation was lighter; if, if, if.
Quite a few feel that the answer will be wireless. I don't think there is enough spectrum for that, but I could be wrong. And even if there is enough spectrum, metered pricing will crush every wallet.
That said, I think many people don't have a real good ground view of telecom. In many parts of America, there are a number of independent players (non-Duopoly) that are rolling out fiber to the home or fiber to the MDU (condo/apartment building/etc). Stealth in NYC; Socket in Missouri; Sonic in Cali; and Hunt Telecom in much of Louisiana where they are laying fiber to businesses and schools.
WISPs (wireless ISPs) who typically use fixed wireless gear to offer broadband have been transitioning to fiber in a number of rural communities, like Shelby Broadband is doing in KY. And they are doing that without government funds - all bootstrapped.
Another theme is that investment is down in broadband due to the Net Neutrality rules that are being argued in SCOTUS. *cough*cough*bullsh!t* Investment appears down for a number of reasons.
One reason is that the investment dollars of the ILEC/RLEC group are government funds from USF, CAF, RUS, NTIA right now.
Number 2: The cost to pass a home with fiber when FiOS started in 2004 was about $2700; now it can be as low as $700 depending on density, geography, topography. Also, the biggest spender in FTTH was VZ with FiOS, so investment has declined since they stopped spending the $24B. C Spire and Google aren't going to replace that kind of spending. However, CenturyLink's Giga announcement and Windstream's 100Mbps PR are shining some light.
Number 3: I have been in the room when execs at AT&T have said they have no answer for DOCSIS 3.0. Verizon did a co-marketing deal with the cablecos (as part of the SpectrumCo deal). That isn't competing!
How deflating do you think it was for ILECs when Comcast said it was doing 2Gbps?! That isn't about regulation. That is like being in a high school boys locker room and realizing that you have puny equipment muscles.
ILECs don't cross LATAs any more than cablecos do. Only WOW! and RCN overbuild. Wholesale agreements to get FiOS and U-Verse access have been ridiculously hard to acquire until just these past few months. APEX by AT&T opened up U-Verse infrastructure to wholesale partners. Verizon is a little stingier with FiOS probably due to their outsourcing wholesale to one person in a nursing home in Phoenix who only has phone access an hour a day. True story. Ask any VZ wholesale customer.
Until a vendor comes along like Hatteras did with G.SHDSL making it easy to deliver g.Fast to premises end to end, DOCSIS 3.0 will win. VDSL2 is just now becoming economical and stable. And the deployment costs for VDSL2 with fiber-to-the-node is less than FTTH. I think if you didn't see the industry from the ground level, you can make pronouncements all day long that are misleading or skewed.
We need the best broadband network in the world if we are going to compete globally. If not, no one will be able to pay their cell phone bill.
]]>Network upgrades and maintenance costs have not dropped the same percentage as the bandwidth costs. So maintaining the network to provide cheaper pipes has remained the same (more or less). As a percentage of costs, it probably tweaked up a little. Upgrades to DOCSIS 3.0, 100GB, G.fast, Gigabit2 and the associated backhaul and middle miles have been steady or increasing (depending on geography and provider).
The one thing that is being discussed about the cable mergers is that customer service is at an all time low. So much of residential service is self-service -- from ordering to billing to paying to install. Even tech support for the modem is automated as the call in to support will initiate a modem reset. Simply put, the cablecos are not going to put money into customer service. There are profits to be made, big chunks of debt to be paid back and network to be built. Honestly, I don't know where the cablecos get all that capital to do countless build outs for triple play to a business at $310 per month.
I do know that installation is suffering. Well, the whole provisioning process is awful - from porting to install. Much of that is due to massive staff layoffs that resulted in domain knowledge disappearing. Less staff to do increased work. In some areas there is a single T1 technician for 5 CO's. That is a large area to cover single-handed. (But then unions have been getting squeezed out too.)
Even in the VoIP world where prices have compressed due to hyper-competition. When you have 2000+ providers trying to sell VoIP to everyone, 3 things are going to happen. (1) A lot of amateurs will be in the mix leading to lousy VoIP, horrible experience and clumsy install. (2) Telcos will try to deliver VoIP like they do TDM, which is a mistake since the delivery platform for VoIP is more complicated. (3) Not enough experienced technicians to go around, so installations will be a mess time and time again. I hear horror stories every week. One large VAR thought that if their techs could install wi-fi at a coffee chain, then VoIP would be a piece of cake. What? Hello!! Not even close to the same skill set or complexity. And they even get the wi-fi install wrong occasionally. Dead zones.
As we get more megabits for the same dollar, service will continue to deteriorate. It isn't like the debt that the Duopoly has is going to handled by broadband sales. Or that executives don't want bigger bonuses. Or that shareholders don't want a dividend.
It has an affect on the channel as well. Partners are spending more and more cycles on managing the provisioning for services that pay so little. Kind of unprofitable to spend hours on paperwork for site survey, ordering, porting and then chase the whole project to completion for $31 per month. This system will crack open soon. Yet this was all inevitable. It is the Wal-Mart effect on the Duopoly.
]]>For all the rate hikes that the RBOCs received -- several of which were to build out a high speed fiber network to every home! - they have not delivered on Broadband. DSL was around for a long time before competitors brought it to market. RBOCs were saving their T1 business. VoIP could have replaced TDM lines -- or at least a bunch of helpful features could have been added to phone lines. Nope. Not till we have to!
Here are some other incidents.
Misleading Sales and Untrained Personnel: Verizon tells customer he needs 75Mbps for smoother Netflix video!! Analyst blasts Verizon for misleading upsell pitch.
False Advertising since Unlimited does not mean that! "Verizon Scolds FiOS User For Consuming Seven Terabytes Monthly"
"AT&T promised a customer it could get broadband to his new house - he wound up with 768Kbps service"
Fraud: "AT&T/SNET to Pay $10.9 Million to Settle Lifeline Overbilling"
Verizon pays Zero taxes again. VZ is not alone.
No taxes, but big salaries for top execs and spends Total Lobbying Expenditures: $3,440,000 in 2015! It is only 4 months into 2015!!!
How can you lobby to a government when you aren't a tax payer? [there is a petition to get this to stop here.]
Lobby because it lowers your tax bill!! Report: 8 Firms That Paid the Most in Lobbying Had Lower Tax Rates.
Constantly suing the FCC -- (money better spent elsewhere I think). U.S. telecom groups, AT&T seek to block new Internet rules.
Still making bank on dial-up -- 83-Year-Old Racks Up $24,289 In AT&T Charges By Still Using AOL Dial-Up.
Comcast is a customer service nightmare. Bright House apparently doesn't care that they have service issues and cost more than FiOS.
Overall, these companies COULD deliver fantastic service and still make a profit. They could be about more than the share price, but they make an organizational choice to only care about one thing. They don't care about America or the economy. So that is why I have a mad on for them.
Full disclosure: as an Agent, it is miserable to work with some of the Duopoly companies. And as a BellSouth agent, I was screwed out of a lot of commission money. A Lot. So that too.
]]>Storagecraft writes, "According to a study by CompTIA, four out of 10 IT companies are monitoring the impact cloud computing has on the MSP market before deciding to offer managed services."
"ScanSource CTO Greg Dixon explains why it's imperative for solution providers to build managed services into their product offerings in order to boost recurring revenue and expand their value add." [source]
Let's examine each one.
First, the Duopoly doesn't even do research. They have industry labs (e.g., CableLabs) and vendors that do the research and development. G.fast wasn't developed in an ILEC lab. So if the Duopoly isn't doing R&D, how would a VAR? Is Comcast doing R&D? No. Cable Labs does it for them.
On developing IP (intellectual property), I have to wonder what they mean. Most VoIP providers have noone of their own IP. ISPs don't have any IP; hence why so many were open to DSL patent suits. [see here and here]
On the second point: Build their own cloud services. Well, MCPs (Microsoft Certified Partners) used to run their own MS Exchange email servers and Small Business Services for small business. Microsoft kind of squashed with the end of life of Microsoft Windows Server 2003 and SBS and the launching of its own cloud services, highlighted by Office365.
Channel partners are being encouraged to resell from the cloud brokerage platforms that Ingram and Tech Data have. These cloud services brokerage (CSB) compete directly against the carriers. They offer email, backup, apps, CRM, etc.
Backup services are offered by a number of VARs and MSPs. These partners already offer managed router and other managed services. Again this is directly in competition with the carriers and other vendors.
It isn't cheap - CAPEX wise - to start a cloud services business. One could buy IAAS or PAAS or VPS and resell it to customers, but that is low margin, low control business.
I looked at a few MSPs. Global Data Systems is on the MSP Mentor Top 50 list. GDS is a CLEC and Cisco VAR with MSP lines of business. Is that the model that these channel experts are advocating?
Claris is a cloud provider and a healthcare MSP. Other than some network, what kind of partner would Claris be to the Duopoly?
Appia is on the MSP Mentor list too. They are a Hosted UC shop. Appia advocates to VARs that their business model is dying - so they have that in common with channel experts.
There are VARs that perform system integration. It is a special skill set - one that even the Duopoly can't provider (which might be why they want the partners to do it).
The dig on Agents as channel partners is that Agents are mainly good at transactional sales like network services. They aren't very good at selling cloud or managed services. I think that will be proven incorrect in the next couple of years.
One thing that all the partners can provide: a multi-vendor solution or complete solution selling. I'm not certain that all carriers want to see a multi-vendor solution being presented. Until the carriers themselves offer a turn-key solution, customers will lean on channel partners for one. (And this is actually the sweet spot that Agents need to step up into.)
]]>The other dockets at the F Agency are still embattled, including VoIP inter-carrier compensation, special access circuits, Open Internet / Net Neutrality, and the mergers (Comcast-TWC and ATT-DTV).
I haven't jumped on the Title II bandwagon, because the devil is in the details (and that proposal is like 300+ unreleased pages!)
I will say this about Title II: despite voice being regulated we still have call completion issues in rural America; we still have dropped calls (VoIP and cell); and we still have too many amateurs delivering voice services (causing some of these problems). The TDM-to-IP transition is in mid-stream but without any real oversight or structure in place. VoIP inter-connection is still a problem. It would be nice to have HD and Fax work any where due to all VoIP lines being as connected as TDM lines are.
Calling Title II regulation Obamacare for the Internet is just plain spin for TV time by a bunch of old white men who can't turn on their computers themselves and still think of the Internet as a bunch of tubes. (I am very tired of politicians - all of them.)
FCC Chair Wheeler's "strategy of reclassifying the service providers stems from a decision by the U.S. Court of Appeals in Washington last year that voided FCC open-Internet rules. Judges said the agency improperly treated Verizon Communications Inc. as if it were a utility -- something the FCC couldn't do because of its 2002 ruling." [source]
None of this would have come to pass if Comcast and Verizon hadn't played games with Netflix. These same 2 idiots ISPs are the only 2 to sue the FCC over Open Internet rules. They should have been happy with the way it was, but greed.
In addition, I think the FCC gave cable enough prizes this year: by changing the definition of broadband to 25 Mbps x 3 Mbps they essential called ADSL dial-up. With the sale of more Verizon wireline assets to Frontier, cable will win some more. Isn't that enough for the Duopoly member with an almost monopoly on residential broadband in America and an increasing hold on small business Internet and voice services?? The Comcast deal for TWC with Charter should NOT go through. There is no benefit or upside to the consumers for this to happen. None. And that is the sole mandate of any F agency: protect the sheople consumers. The FCC lacks follow up AND enforcement of merger conditions. So why approve a merger that will need a lot of conditions -- for a company clearly against Open Internet????
The Big 3 - AT&T, VZ and Comcast - are all set to file lawsuits after this order passes. I like how "Michael Powell, who as Republican FCC chairman led the agency to its 2002 decision," weighs in as president of the NCTA for his decision in 2002. How did he get to be FCC Chair again? Oh, right, he worked for Rumsfeld and his daddy. That's qualified.
It seems FCC Commish Clayburn is looking for the spotlight and to add drama by asking for lighter conditions now. Ah, politics. It makes for crappy regulation. But maybe it is more about the next job offer, as Clayburn seems to be doing the delay that the GOP commissioners were seeking. Why does it always go along party lines at this F Agency?
This is a decent read: Title II Proposal Brings Certainty - and Questions.
In 2002 till 2006, the FCC - usually twisted by the courts - made a number of rulings that set the current Duopoly up for riches. I think the exchange for that was supposed to be broadband for all in the US. To at least keep pace with Moldova. Instead, they pocketed the rate increases, played games with OTT content providers and VoIP providers daily, made deals with each other not to compete and lobbied up the ass in place of actually making good on their promises. They not only deserve Title II; they all deserve eminent domain of their networks.
Governments take over houses because a new plan concept will bring more taxes. Why is this any different?
This is also why the big merger should be denied -- they break their promises.
"With broadband defined as a Title I "information service" as it is today, the FCC lacks the legal language and authority to punish carriers for things like super-cookies" from VZW, write VB. In what world do we pay companies to spy on us? Oh, right, sorry.
It would be nice if the FTC has some cajoles, but they don't, so it is up to the FCC do rein things in.
I hear this from the old angry white men on TV: How much do you love America that you consistently play with the one resource that makes America competitive? The Internet is what is spinning our economy. It is what provides many people jobs. And yet the top ISPs won't provide a dumb pipe equivalent to Moldova to Americans?
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Here is the Wholesale Paradox: The LECs and cablecos HATE wholesale. HATE IT!!!! but it is a large chunk of revenue on networks that are basically not fully utilized. And without selling wholesale network services to competitors that would not only have an under-serving asset, but they would be missing out on a bunch of revenue.
Selling last mile connections for CLECs gives cable a way to extend its network into new businesses and buildings without the expense of sales. The same with the ILECs.
Think about MVNO - the virtual cellco. When Amazon launched the Kindle e-reader it came with EVDO access via the Whispernet powered by Sprint. AT&T came along a few years later and offered a better deal. Why would AT&T undercut Sprint for that? Ma Bell knew its cost structure and that with its excess capacity on 3G, this would be like free money. It's why all of the cellcos offer MVNO: more sales people out there driving revenues on a network that is already built and costs billions to maintain. Besides, no MVNO has sold more than a half a million units. CinBell sold about 350K subs to VZW last year. NTelos has about 450K on its network, partnered with Sprint. So no MVNO represents a threat to the 4 cellcos model. It is simply a way to make more margin on a sunk cost - the network and its under-utilized capacity.
You empower your competitors with wholesale. It is also revenue that you don't have a cost of sales on. And as long as you have your sales and marketing machine spinning away properly, your competition will just be a small revenue source.
EPB has a monopoly mindset -- and probably a lack of sales & marketing acumen, which means they feel threatened by wholesale. However, when you exit the end user support and the cost of sales & marketing to the end user, your costs go down. And you get to focus on building and operating a network - a single focus - which according to this Washington Times article they can't handle. It is the big dilemma with muni built and taxpayer funded networks - -they aren't open usually.
When you think about it, the continual rate increases on cable has helped build that network -- the same way that telcos were able to get rate increases for promises of fast broadband to the home. So in a way most networks are taxpayer funded. Networks have been built (or at least upgraded) with grants, loans and subsidies from the Universal Service fund, BTOP, BIP, RUS, NTIA, the Dept. of Agriculture and other federal agencies.
Even the cellular networks are built using licenses of public airways.
Shouldn't those networks be open to wholesale? Innovation doesn't happen in a vacuum. We have seen what No Competition has done to service, speed and pricing in the US.
In 2005, after Brand-X resulted in so much forbearance, the ILECs did not have to sell services via wholesale, but they did. Before forbearance went into effect, many CLECs had already inked wholesale agreements. Why would they do that? They just won. Because it is good for business.
SIDE NOTE:
Interesting read on the Chattanooga EPB network: High Speeds at an Even Higher Price
]]>Indiana Fiber Network is upgrading to 100G. IFN is owned by 20 LECs in the state that put 3500 route miles of fiber in the ground touching about 4000 buildings.
Big upgrades - are you in Indiana? Might I suggest we have a call so that we can work to increase your revenue by leveraging the 4000 on-net buildings?
Cable over-builder, WOW! has been attacking the SMB market. WOW! Business will launch 110Mbps x 15Mbps Business Internet in some Southeast cities.
Pivot Media has a consumer study about Gigabit Broadband called Giga What?. They also wrote an article about the DSL is the new dial-up.
17 percent of all Americans (55 million people) lack access to 25 Mbps/3 Mbps service.
Just to maintain or retain revenues (and government subsidies), network upgrades will be required. G.fast has launched in Europe, just not here yet.
To get 25x3 service to most of America will take ingenuity, innovation, some cooperation, lots of investment capital -- and even then there are issues with bridging the Digital Divide. As Google blogs here, to cross that divide, people need to be able to afford it (while wages in the US are stagnant that will be tough); people need a reason to buy it or to be educated about the things that Gigabit broadband empower the user to do (more than just Facebook and cat videos); "Show people why the Internet matters" and then teach them how do use the Internet. That is a lot of components. These network upgrades are solving the Digital Divide. These network upgrades are to get more money out of current customers (and maybe retain a few customers).
]]>There are so many podcasts, blogs, newsletters that you could spend 15 minutes reading each day to start the day off on a good note. Try it for 30 days.
5 Simple Questions Successful People Ask Themselves Every Day. As a business leader you should ask yourself these questions each quarter:
Have you done your planning for 2015? The Passion Planner was a kickstarter project. It seems pretty interesting for individuals.
Top Challenges & Attributes for Tech Marketers - Infographic by IDG Knowledge Hub. I will give you 2 more: Branding/Positioning/Differentiation (we really only see it in cellular) and Budget.
The top email campaigns of 2014. Maybe it will help you think about how you want to approach your email marketing in 2015.
I'm not an Apple fan boy, but I do give props to their commercial The Song. Also, props to Target for this ad.
Connecticut - now a Frontier territory - is trying to become a Gigabit state. Interesting since Frontier's DSL has had numerous complaints since it took over AT&T's network and the cablecos don't feel the need to deploy or service their customers - because, hey, what are you going to do, go back to DSL? It is this lack of competition that is causing so many issues which the FCC has to decide on. To go from where they are now to a Gigabit state will be huge endeavor. Good luck! (I am from CT and TMC is HQ'ed in CT.)
This was an interesting read about Fairness and how our always on life is changing how we view the world. "The problem isn't that life is unfair - it's your broken idea of fairness." A similar article about How We Date Now will also provide a look into life online changing offline.
Winners of the 2014 Cloud Computing Product of the Year Award Announced. Quite a few in Wi-fi in 2014 picks.
Beka Publishing (Channel Vision magazine and CV Expo) announced Winners for 2015 Visionary Spotlight Awards.
4 charts that defined 2014 via the New Yorker
A friend of mine is launching an Internet Cafe and learning center in Nepal on IndieGoGo.
One thing to learn from the Sony hack: password management at the very least. Have you changed even one password in the last 30 days?
]]>Then VZ engineers checked utilization on every piece of the VZ network and found no congestion. The congestion was at the Inter-Connection (transit and Peering Points). Thanks for pointing this out. This gives the FCC all the reason it needs to regulate inter-connection like Level3 wants.
What's more is that both L3 and Cogent have been complaining for months (years?) about the congested inter-connection points with VZ. To the point that rumor has it both companies offered to buy the equipment and install it themselves, but VZ refused. So who is responsible for the congestion?
"We're Not Satisfied Until Our Customers Are" <- Ironic, because you signed the deal to have Netflix buy transit from you at the end of April. Once you were going to get paid, you offer to fix it. What a crock! That's why we need real competition for broadband in the US - not this pseudo Duopoly we have currently, where instead of competing with Comcast, VZ co-markets Comcast.
It isn't just VZ either. My own cable modem buffers Netflix, less lately, maybe a deal was struck. When you pay over $50 per month for 15x5 or 7x2 or whatever and you can't watch one unbuffered video stream, you have to ask what you are paying for. Do you buy a car but it can only be used to go to certain stores? It gives a glimpse into what Fixed LTE will be like for many in rural America. Buffer buffer buffer - oops so sorry, but we're not satisfied.
I need some buffer-in
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