On Rad's Radar? - FCC Archives

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.

No Need to Be a CLEC

2013-04-19T20:07:27Z

Up until the FCC's test plan today, VoIP Providers had to rely on CLEC's to get phone numbers. "The FCC has adopted a Notice of Proposed Rulemaking (NPRM) on direct access to telephone numbers for VoIP providers, a process that they say will streamline the process to roll out services," writes FierceTelecom.

"Telephone numbers are a valuable and limited resource; access to and use of numbers must be managed judiciously to ensure that they are available as needed and to protect the efficient and reliable operation of the telephone network," states the FCC in its notice today about the six month trial for a few inter-connected VoIP providers to get direct access to a few numbers.

"In the accompanying Notice of Inquiry, we seek comment on a range of issues regarding our long-term approach to numbering resources. The relationship between numbers and geography--taken for granted when numbers were first assigned to fixed wireline telephones--is evolving as consumers turn increasingly to mobile and nomadic services. We seek comment on these trends and associated Commission policies."

It is nice to know that the FCC is trying to adjust to a world where phone numbers are mobile. It is also trying to adjust to a world where the PSTN is in sunset in favor of an all-IP world.

If this trial does work, it means CLEC's, especially Level3 (and its partners), will lose some business. Much of the VoIP world gets DIDs from L3. I just hope Vonage doesn't screw this up, since the real worry is technical -- can they manage the numbers without depleting them; and directories like 911 and 411/DA have to be updated accurately.

This will likely result in a marketplace for vanity numbers.

What Did I Miss?

2013-03-26T12:55:58Z

After making the news for supposedly canceling tele-working (which they only did for 200 distracted employees), Yahoo is not acquiring. First, Y! bought Jybe, a social recommendation site. Now, "Yahoo announced it is snagging the mobile news reader Summly, created by 15-year-old Nick D'Aloisio," according to the USA Today. Now 17, Nick gets $30 million from Yahoo.

Oracle bought Tekelec, which was known for its Class 4/5 TDM switch in the day, but is now referred to as a signaling company. (Huh?) On the heels of its purchase of Acme Packet, I have to wonder what Oracle sees in the telecom industry that I am missing. Consolidation and bankruptcies are coming. There is too much debt, too much disappearing revenue, and too many companies that do the same thing. There are a thousand VoIP providers out there who could buy a telecom package from oracle IF they had more than 300 customers and any profitable revenue. Unfortunately, most of the VoIP companies can only take orders and not sell. It has become a whore's game of how low can you go - in LD, international, termination, toll-free, and POTS line replacement. It will be interesting to see if these purchases end up being Oracle's Palm.

Global Capacity came out of bankruptcy with a new owner, Pivotal Investment; a new PR firm, iMiller; and new marketing spin in the One Marketplace. Netwolves, UNSI and EarthLink have joined the platform either to sell circuits or to extend their reach for MPLS.

The FCC released its wireless study that Congress requires but doesn't read. ARPU has been steady from 2009-2011 but voice revenue is dropping as data revenue increases. Is the wireless industry competitive? The report doesn't say. What do you think?

Broadsoft released UC-One, its IMS FMC offering. Basically, after signing up 400+ customers, it now has to sell deeper into each account, because there are no more new accounts. So all you BSFT customers, start selling IMS and FMC vis UC-One. Leslie says so.

Broadsoft also blogged that UC demand was outpacing supply, which makes me laugh. On the street, where sales are actually made, customers are seeing 2-4 quotes for phone service. No one is asking for UC, but that doesn't mean unified comms isn't being quoted and sold. Why would the analyst say that? One, he might not be watching enough service providers to see sales growing. Many of the VoIP companies are private and don't do PR or report numbers to anyone, so how would any analyst know the size fo the market, revenues, sales, seats sold, etc.? Two, UC is being quoted but not being purchased - due to poor sales skills or customer sticker shock or the fact that Premise PBX are still selling. Finally, it could be that UC only works with integration. So if the customer isn't using the 3 or 4 applications that integrate with the UC platform, it won't be a good fit (or will require big dollar integration). There are number of reasons why UC sales look dim. A lot of it is education to the customer and to the sales teams, but also a lot of businesses just want fast Internet, a smartphone and cheap dial-tone.

Sprint will start carrying Mitel's hosted PBX solutions as part of its broader Cloud Wholesale Services portfolio.

I Want to be the FCC Chairman

2013-03-25T20:19:56Z

The FCC is losing two key people - Commissioner Robert McDowell and the Chairman Julius Genachowski. It is difficult to be the FCC chairman, but I still want the job!

You have to balance politics and the 3 branches of govt with the Duopoly power, the effect to consumers.

"Julius Genachowski never let the will of Congress, the opinion of the American people, or even federal court decisions get in the way of his determination to regulate the Internet," writes the Heartland Institute.

In all of that political juggling -- which is the problem with America right now -- competition lost. Winners were picked. Losers too. And the loser is the Consumer.

Julius did try. BTOP, the Broadband Plan, CAF, USF reform were all marked attempts to let the little guy have a shot and shake up the system.

Heartland Institute states, "in the one area where he could have made a difference - freeing up spectrum for use in the exploding wireless broadband market - he failed miserably." I don't see the spectrum problem the same way everyone else seems to. There is plenty of spectrum, but the cellcos are not deploying it!

At some point, spectrum is going to be a problem if we continue to believe that mobile devices will be attached just like a wired device. However, having 3 companies - ATT, VZW and Sprint/Clearwire/Softbank - own the majority of the fiber is crazy - and will lead to a number of problems.

What would I do?

For one, I would start wearing kevlar-titanium suits, especially after I demand some form of Structural separation. Why? We need the copper plant for EOC. If the ILEcs don't want it, let's spin it off and run the copper plant as a wholesale unit.

Eminent Domain has won at the Supreme Court. Use it or lose it.

Enforcement would start Day 1. On what you ask so nicely? Enforcement of robocalls, merger conditions, spectrum deployment, auction conditions like open access.

I hate to quote Heartland Institute again because they are such a conservative, pro-ILEC, deregulate-the-industry group, but it is true about the next Chair needing to be an entrepreneur and a digital economy protector. HI thinks that Net Neutrality doesn't help the economy. How close minded is that? In fact, the way HI thinks perhaps we should just close the FCC and save $330M a year. I am kind of for that IF the Commission can't restore some competition and get pricing inline with the rest of the world. The Duopoly are Utilities. I don't care if you're banking on their dividends. At the end of the day, the US economy depends upon the Internet so that it can hum along. We have already spend hundreds of billions on telecom, which should have built a FTTH network to rival any country. And if Australia can do it, so can we.

You know what was missing from the Google Fiber project and the Broadband Plan? A BHAG - a big, hairy audacious goal - like we will have 50MB to every home by 2016.

When you look at all of the online education available, strides in tele-medicine, and the need for more programmers, what could be better than a fat pipe to every home?

Meanwhile, the IP transition will have far reaching effects. You have to mitigate them like was done DTV transition.

Yeah, the next Chair is going to have to have thick skin and some serious skills to move the country along. Consider this my application for that position. The Internet was deployed to the majority of the populace by risk-taking small businesses. Today, it is mismanaged by less than 25 companies. We need to change that.

Some Interesting Reads

2013-03-13T13:58:17Z

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

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

Best quote from Mobile World Congress:

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

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

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

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

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

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

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

One last one: at CPExpo, a channel AVP at ATT was given my book and read it and took the time to come over to say that he enjoyed it. Kind of a highlight at the show.

Nutty News Monday

2013-01-07T17:55:23Z

The list of the worst CEO's of 2012 is out. How is it possible that there are no telecom CEO's on that list?

FiberLight is planting another 4,500 miles of dark fiber in Texas. Look out Alpheus.

Women in the Channel Forms Its First Board of Directors! CONGRATS! I will be interviewing them later this month. Stay tuned.

Good point: "The data centers of the future may look more like NASA ground control - governance inside, resources out." [F5]

,p>There are over 600 courses online for free from various colleges. There is no reason to be ignorant any more. Or pay $$$$ for a degree that may not help.

Cbeyond finds that small business will be buying more cloud, which is a good thing for them since they recently launched TotalCloud (phone system).

Brandywine sues over 40 ISP's over DSL and it is unclear if they mean modem use, DSLAM or actaul DSL service.

There is another company suing SP's over efax. Yeah. They own the patent on some form of scanning to an efax doc and are chasing companies for revenue. Can you say WE NEED PATENT REFORM?

"America has plenty of wireless spectrum -- we just need a new way to allocate it." No kidding!

FCC has hired a new chief economist who just finished writing a "National Cable & Telecommunications Association paper supporting the industry's use of punitive caps and costly per-byte overages." That's great!

Common Sense - it's a super power.

The War on Privacy

2013-01-07T16:24:06Z

What are the F-Agencies doing about privacy? Nothing.

Facebook was caught following users' every movement on the web. If Facebook is open in a tab, it is tracking you - even movements in other browser tabs!

How AT&T and Verizon manipulate your smart phone. The two cellcos own most of the market. ATT just activated 10M phones in 4Q2012. VZW activated 9.8M. They collude on pricing - when one makes any pricing move, the other follows suit.

The VZ gets hacked - and VZ denies it!

And it gets crazier: VZ Wants to Track Your Movements While You Watch TV!

What happened to Do Not Track and other privacy measures? I know. I am old school. Online privacy is long gone.

And as we are increasingly tethered to our smartphones, we are tracked, followed, and stalked by the carriers, the apps makers and the government. Minority Report anyone?

Predictions for 2013

2012-12-19T19:15:00Z

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

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

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

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

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

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

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

The companies to watch in 2013:

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

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

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

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

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

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

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

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.

RBOCs Declare War on CLECs

2012-12-06T17:58:29Z

This is a letter from telecom lawyer Kris Twomey to the members of FISPA, an association for ISP's and CLEC's. I know that Politics and Regulatory talk puts you to sleep or bores you or you don't have time for it - but these proposed changes to the Telecom Act WILL affect you!

"One of the questions I am often asked by ISPs considering starting CLEC operations is whether access to unbundled network elements ("UNEs" or "the copper in the ground") will continue in the future. My response has always been something like, "Of course, the Telecom Act guarantees it. Congress would have to revise the Act for any changes to impact UNE availability." Those of you that know me know that I don't get involved in hyperbole, and I'm basically too optimistic to accept any sky is falling-type theories. Now though, there's something brewing in D.C. that genuinely worries me. Turns out AT&T has a plan to wipe out the Telecom Act of 1996, or at least, the parts regulating interconnection.

"I think the next great telecom policy battle is at hand-- nothing less than an attempt by AT&T and others to dismantle the Telecom Act, destroy CLECs, and essentially codify the ILEC/Cableco wireline duopoly. Smaller CLECs need to get organized and respond.

"Debate has begun on all fronts about the future of telecom regulation and I believe we are at the precipice of major change. Over the last couple years, AT&T and Verizon have been quietly lobbying for the FCC to consider rules to transition to an all-IP network, or in ILEC-speak "facilitate a sunset of the POTS network." Verizon is even using a natural disaster to justify removing copper (and therefore interconnection rights) from its network: Other ILECs have been murmuring that the Telecom Act is now 15 years old and needs to be updated.

"On November 8th, AT&T filed the first real proposal with the FCC to "modernize telecom regulation for an IP world." The petition is here [pdf].

"The AT&T petition is a direct shot across the bow of the FCC and CLECs, essentially daring the FCC to act. The petition is breathtaking in its audacity. Here are its main points and suggestions":

Eliminate the availability of copper loops (all UNEs, really) in certain central offices as an experiment and see what happens;
Limit the time that CLECs can object to ILEC notices of network changes;
Reduce state utility commission regulatory authority;
Allow ILECs to remove all copper facilities when the feeder (such as a remote terminal) is upgraded to fiber;
Eliminate legacy ILEC regulations such as carrier of last resort obligations, long distance parity, etc.

"Various stakeholders have responded. The National Regulatory Research Institute, a group representing state public utility commissions, issued a paper on the TDM to IP network transition (here).

"The trade associations have begun to weigh in on AT&T's proposal. CompTel and individual CLECs have lobbied for pro-competitive policies and filed proposals concerning the IP network transition, preserving access to copper loops in fiber-fed ILEC networks, and requiring direct IP to IP network interconnection.

"The cable trade association, NCTA, filed a response to the AT&T petition arguing that the FCC should take its time developing a record. After all, they've actually got a pretty good deal under the current rules. The NTCA, which represents smaller ILECs, filed its own petition on November 19th seeking regulatory relief.

"I am concerned that there is no organized coalition of smaller facilities-based CLECs to defend its interests and propose alternative ideas. I fear COMPTEL will push the interests of its large CLEC members over those of smaller CLECs. I do not think that necessarily the interests of Level 3, Windstream, etc., that do not purchase many copper loops, will adequately align with those of truly local competitors in suburban or rural markets reliant on central office connectivity at regulated rates. I'm especially worried because, well, those "local competitors" describes virtually my entire client base and the businesses of many people that I consider friends." [RAD's note: Mine too, btw]

"As a preliminary matter on strategy, I believe that it is fruitless to solely fight against a policy without offering clear alternative proposals. I also think that by refusing to acknowledge the legitimacy of some opponents' suggestions detracts from the power of our unique ideas. I have several alternative, pro-competitive policy suggestions that would truly represent a modernization of the current system; seek to even the current playing field; and give the ILECs relief from some of the legacy regulatory requirements that are arguably outdated. For now though, it is better that these ideas remain off-list until consensus positions can be developed by a group.

"I have spoken to several of my facilities-based CLEC clients that are interested in forming an organized opposition to these attempts to gut the Telecom Act both at the FCC and to lobby Congress for a true modernization of the Act. I will be hosting a conference call for interested companies on Wednesday, December 12th at 2pm EST. The call is restricted to optimists--those that do not subscribe to the defeatist notion that the ILECs must always get their way. I have some very specific ideas and policy proposals, but am not pre-disposed to any particular strategy. I think it's time for like-minded companies to join forces to protect their interests and I'd be honored to represent them. Please contact me off-list at kris at lokt.net for call-in details."

[RAD Commentary] The RBOCs lost a court battle each recently.

VZW lost in Appeals court its fight to forbear cellular data roaming. It challenged the FCC's authority on this matter and lost.

Meanwhile, ATT lost a data throttling case in small claims court.

Copper clipping will affect Agents because EoC is a big deal - but requires copper plant!!!

XO, TelePacific, MegaPath and other CLECs would lose territories that they could offer EoC and flavors of DSL. ADTRAN, Zhone and Overture Networks make the geat gear that goes in the CO for CLEC's to provide EoC. These companies would be affected as well. Can you see the ripple effect?

How about affordable mid-band Internet Access for the SMB space? That is what EoC is - and it will go away.

Moves and Changes This Week

2012-11-19T16:29:14Z

Cisco announced plans to acquire Meraki, a managed Wi-Fi company, for about $1.2B.

Broadsoft announced UC One and now Rich Communications Services (RCS) to be added to its BroadCloud SAAS platform. [UCStrategies]

After Softbank put $20B into Sprint, Sprint turns around and buys some US Cellular markets for $480M. Consolidation - that's all we have left as an industry.

RUMOR! Google and DISH launching wireless network! This is the rumor, since the FCC is about to rule on spectrum that DISH controls (40 MHz of MSS S-band spectrum in the 2 GHz band, that the FCC renamed AWS-4). This spectrum may get cropped and added to the H-block auction. Should have an FCC announcement by Thanksgiving.

Right now, One in five smart phones sold in the U.S. is from the Samsung Galaxy series. I guess the $1B patent fine was nothing!

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.

The CLEC Space is Changing

2012-09-21T19:03:51Z

The FCC has removed its rules against CLEC-Cable mergers. Right now the M&A department at Comcast, flush with cash, is picking out its next target. "Hey, Guys! Call me if you need help with valuations or choices!"

Sprint and VZ and 42K other companies are selling Office 365. This consultant says to short that stock. "Resting on existing revenue streams, they are becoming good at expense management, but aren't finding meaningful growth." Which is True. "Telecom are generally stuck in the legacy thinking that their role is to choose vendor technologies, operationalize them, and sell them to the masses." Which is also True due to Monopoly Mindset or what I call Bell-Head Thinking. "It does not cost that much money for new entrants to come into the marketplace and replace telecom in nearly every sense at a fraction of the cost structure. Hope is not a strategy. Real disruption is on the horizon. Great leaders will embrace the chaos and create new markets for their companies, and will assemble a team of people who have fun doing it." (I work with some of the smart ones!) Razorsight says that Pipe revenue will always drive most Duopoly revenue, since their margins on it are high.

On the flip side, CLEC business hasn't turned out as expected, says Gary Kim. A majority of the CLEC business was UNE-P until 2004 - and most of that went to consumers of AT&T and MCI. Cable owns that consumer voice business of the CLECs today. Cable is turning its attention to small business, which it will dominate to the chagrin of CLEC's and ILEC's alike. Cloud and managed services will be important for CLEC's and ILEC's for a couple of reasons: (1) staying relevant to the marketplace; (2) a non-facilities revenue stream; (3) an avenue of differentiation (if they actually take it); and (4) a way to reduce churn and increase ARPU with customers.

Script out Change by Dan Heath for Comcast Business

AT&T Southeast experienced a huge Metro Ethernet outage in Atlanta and South Florida yesterday. AT&T reported that it was a core Cisco router. This is the third outage for AT&T in the last few months. See here and there. What is formerly BellSouth's Metro Ethernet surprisingly is not resilient.

Final piece of news in the CLEC space: Inteliquent Announces Changes to Its Management Team. Inteliquent is the new name of Neutral Tandem and Tinet. Inteliquent's President/COO, Surendra Saboo, and the CFO, Robert M. Junkroski, are both stepping down on October 1.

What's Happening?

2012-08-24T20:34:01Z

Broadview Networks filed bankruptcy, albeit a pre-packaged debt reduction plan.

CenturyLink and Mediacom join the broadband cap club. Mediacom has a low end cap of 150 GB. Ouch! For cable companies, metering and caps are about preserving the TV money, but telcos should be cap free.

Are you a Start-up? Pitch your company at StartupCamp in Austin!

President's Club contests are popping up. Microcorp has recruited 6 carriers - M5, Level3, Comcast, EarthLink, Cbeyond, ACC Business - to help Agents qualify for the trip. WTG just announced their first President's Club destination: Puerto Rico. And Telepacific has a President's Club, too.

FCC's 8th Broadband Progress Report is out. About 30% of the US population does not purchase fixed line broadband - but they may get broadband at work or via 3G. Only 6% are stranded on dial-up, so I am having a hard time swallowing all the money that CenturyLink, Frontier and Fairpoint are getting in federal funds to build out - at approximately $775 per user!!

EarthLink's customer profile according to Mike Toplisek: "In large part, they would fit into the range of five employees up to 1,000 employees. Probably 95% of that customer base fits in that size."

The Economist has an article about OTT (over-the-top) VoIP apps and their effect on mobile operators.

The FCC approved the sale of SpectrumCo spectrum to VZW. There were a few restrictions on the joint marketing venture between the two.

FCC Suspends Special Access Rules, Will Collect Data To Modernize Them.

Another Unpopular Decision is the Tale of the FCC

2012-08-16T18:34:00Z

don't think the FCC has ever had a popular decision. As far as I have seen, every decision they make ends up in court. TELRIC, Brand-X (DSL and Cable access for ISP's), CBS Nipplegate, Tennis Channel versus Comcast, AT&T-T-Mobile decision, cell phone radiation (which is back in the news), USF Reform and the list just goes on.

Today, the DOJ and the FCC announced that they will approve the VZW-SpectrumCo deal. I am still trying to wrap my head around this one. How do you say No to the number 2 and the number 4 cellcos merging but okay the Duopoly working together?? There was competition before. Now there will be none!

""The Antitrust Division's enforcement action ensures that robust competition between Verizon and the cable companies continues now and in the future as technological change alters the telecommunications landscape," Wayland added."

The FCC's only job is to protect the consumer and make sure that they have access to phone lines. Once again failure at the F-Agency. It's myopic view of LTE as some kind of sacred cow is laughable. They won't innovate or manage their spectrum better if you keep taking away competition!

Rural DSL will now be replaced with LTE, which is not only more expensive but is metered!

The best part for VZW is that they can't write all this off. Scrap the copper and follow the ATT lead:

"While AT&T was slapping usage caps and overlimit fees on its customers ostensibly to help pay for network upgrades, AT&T wrote off the value of those upgrades on its federal taxes, winning turbo-charged tax deductions for every new cell tower, 4G upgrade, and just about everything else AT&T used to enhance its network," reported Stop the Cap about ATT paying zero taxes and getting a $420M rebate.