The other rumor is that Altice which bought Cablevision and Suddenlink is looking at a nearly $2B IPO and will use those proceeds to buy Cox. But that may not happen because Charter now wants to buy Cox.
John Malone, the pioneer cable consolidator, has been all about consolidating cable, telco and wireless. His Liberty Interactive just acquired Alaska's GCI for $1B. There is noise that he would flip that to Charter. Cox plus Bright House plus TWC plus Charter plus GCI gives a 49 state footprint and would make that entity bigger than Comcast.
Charter was fined by New York State $13 million for not living up to its merger agreement. The rest of us are enjoying newer, higher pricing.
Meanwhile Comcast is being sued for cutting a small Texas ISP's lines and putting them out of business after they rebuffed an offer to be acquired by Comcast.
Just to add some notes, a bunch of Senators asked the DOJ to "closely scrutinize AT&T's proposed acquisition of Time Wamer." It won't change the course of this consolidation.
As 5G rolls out -- or 4G gets density to satisfy the bandwidth consumption of mobile Americans, you pick -- it will require a lot of fiber to towers and small cells. The editor opinion on Fierce makes it sound like the cellcos weren't hard nosed negotiators before now. Sheesh. There has always been a cap on how much a cellco would pay for bandwidth to a tower. Always.
Nearly 25% of Urban Americans aren't connected to broadband internet, usually due to cost for broadband. And despite the fact that Americans pay more for broadband than other countries, Wall Street is asking the ISPs to charge more. Greed.
The divide between rural broadband and urban is still large. The short fall at the USF Fund isn't helping. The telcos, including AT&T, want that funding to do any build outs. A political hot potato to add to the pile with Net Neutrality, mergers, healthcare and the whole American infrastructure (bridges, roads, power grid).
Bigger not Better.
Who thinks that the CenturyLink acquisition of Level3 will be derailed by the $12B lawsuit that C-Link is facingin the wake of charges that they pulled a Wells Fargo accounting scam?
One last thing: GTCR acquired Inteliquent. GTCR also owns Onvoy. They merged them and decided to keep the name Inteliquent.
]]>RC did have some wins last quarter: RC "closed six deals with TCV north of $1 million dollars up from five in Q4. One of these wins was at Hyatt Hotels Corporation. Hyatt will be replacing legacy Avaya system at their headquarters with RingCentral Office."
Some factors that are shaking things up: Avaya bankruptcy; 8x8 and Shoretel hiring bankers for strategy; and Toshiba leaving the North American market.
RC states: "For each dollar invested in sales and marketing, we continue to see $9 of revenue and $7 of gross profit over the projected life of an Office customer. " A number of UC providers should take note of that stat.
In the last 15 years, 52% of the S&P 500 have disappeared.
According to the CDC, "more than half of Americans have cut their traditional phone line and now only get wireless phone service." The other half is paying more and more for POTS service.
Verizon sold its data centers. It also sold its cloud services unit to IBM .
CenturyLink sold its data centers to a coalition of PE firms that also bought a collection of cyber-security firms. The new company will go by the name Cyxtera Technologies and it will be run by the former CEO of Terremark.
Gary Testa left Polycom last March to become President of Star2Star. That lasted 11 months, then he quietly exited telecom. Michelle Accardi has his position now. I am guessing the IPO is on hold.
John Oliver took on the new FCC Chair (former VZ lawyer btw) and net neutrality again. Want to comment on the FCC proceeding ironically named Restoring Internet Freedom (Docket 17-108) head over to the domain www.gofccyourself.com
I tried to explain this to several security people. Thankfully now there is a study. "More than 70 percent of SMB IT managers say budget considerations have forced them to compromise on security features when purchasing endpoint security," according to a survey by VIPRE.
All these Rapid Expansion press releases are funny. Yeah, you are following the Long Channel Strategy of signing up everyone you can. No idea how that pans out for most since it is a million dollar cash deal. Each of those master agencies will need co-marketing dollars just like the multitude of vendors that signed up with the likes of Jenne, Tech Data and other VADs. At some point, the cost to get a sale may be too high.
VZW has a co-sale model for One Talk. AT&T has co-selling. But RingCentral is taking this further. There is the partner, a channel manager and a SME from RC involved in each sale - from 1 seat to a million according to the release. All three getting 100% of commission. That will get expensive quick.
I would like to stop seeing ridiculous numbers in the press releases: "over 2,200 sales partners are now offering our services" and "we have more than 4,000 partners" and "300 Master Agents signed up" and the best: "8 Master Agents, providing 200,000 sub-agents". STOP!
]]>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.
]]>Samsung acquires Joyent. "The Joyent team pioneered public cloud computing (and hybrid cloud), nurtured and grew Node.js into a de facto standard for web, mobile and IoT architectures, and was among the first to embrace and industrialize containers, compute-centric object storage, and what is now coming to be known as serverless computing," according to their CEO's blog.
Onvoy completed the acquisition of ANPI (see here). I announced it in April here.
Microsoft grabs an AI firm. "Microsoft has acquired Wand Labs with the intention of improving messaging apps and bots with enhanced natural language technology," says Infoweek.
Expect a lot more M&A, says Marc Andreessen, Netscape co-founder and VC. It will be coming from more non-traditional buyers, he says. (More like MS-LinkedIN; Grasshopper-Citrix and GoDaddy-FreedomVoice).
BTW, Tom Wheeler's FCC wins Net Neutrality fight against ISPs Appeals court decision upholds FCC's net neutrality order.
Who's buying Yahoo? VZ, AT&T, Dan Gilbert or someone else.
]]>"About 50 percent of the Ethernet circuits Windstream buys from XO, or about 32 percent of its Ethernet expense with XO is provisioned as EoC. By using XO's EoC services, Windstream can provide symmetrical bandwidth of up to 100 Mbps to business customers." So XO is a vendor for Windstream for EoC. They want to preserve the supply of EoC, not something that VZ cares about. Verizon is allergic to copper.
Meanwhile Sprint is really pushing its wireline portfolio, something that it had forgotten about for ten years. Sprint's new Ethernet strategy involves two new options -- Ethernet over Copper (EoC) and Ethernet over DOCSIS (EoDOCSIS). Sprint must have struck a deal with Charter and TWC for EoCoax is strictly a MSO offering.
This FCC complaint is just another lever of negotiations. XO used it when Level3 was buying Global Crossing. It happens often.
I'm surprised that either Global Capacity or GTT haven't stepped up to offer WIND and Transbeam EoC services, although maybe the price point isn't as low as XO was offering. Who knows?
]]>Frontier says that the 30K people affected by the transition (and who still have issues) will get credits and should get over it as 30K represents less than 1% of their customers. The Florida Attorney General jumped on the PR bandwagon to wag her finger at Frontier. When you deregulate phones and then give a pass on an acquisition like this, you can't do more than wag a finger.
Sprint just remembered that they have a fiber network. It only generates about $600M in revenue for them currently - about the same as the revenue VZW makes on IOT.
This is offbeat: The FCC issued an Order ($100K fine) resolving a call completion investigation involving inContact.
Evolve IP took a majority investment from a private equity firm, Great Hill Partners. It is a cash infusion for growth and ramping up. " The Company's services are currently deployed in four continents and 15 countries, to more than 1,300 commercial business accounts with more than 100,000 users, licensed seats and managed end points." This investment makes it a little harder for someone like Vonage to scoop up Evolve IP.
Vonage spent most of its acquisition fund buying twilio's biggest competitor, Nexmo for $230 Million. This is CPaaS, communications platform as a service space that Twilio has owned. This is the elastic VoIP space. It will be the fourth platform that VB will be running, which is an expensive proposition. It is a business more like wholesale VoIP Orig/Term than it is about retail VoIP, which is Vonage's bread and butter. This begs the question how do their salespeople sell this versus UCaaS? Two entirely different businesses.
Diane Meyers at IHS released their Top 10 UCaaS players scorecard: 8x8, Vonage, West, RingCentral, Mitel, Verizon, Star2Star, Broadview Networks, Fuze and Nextiva. 600K seats puts you at the top of the heap. "Landing just outside the top 10 were Comcast, ShoreTel, Cox, CoreDial and Windstream."
Lenovo gets into the UCaaS space with the launch of its "Smart Meeting Room Solution, essentially a unified communications offering which allows various devices and screens to be able to collaborate in a workplace... The solution combines Lenovo's ThinkCentre Tiny desktop with Intel's Unite software."
Streaming video is a big thing for Live events like Blab, FB Live, Periscope and others Rich Tehrani takes a look at it here. Note: no telecom companies are in this space.
Telcos in the US and UK are not making enough SaaS sales. A majority of the SMB cloud revenue is going to the SaaS providers themselves, according to a report.
The Digital Divide is real: Broadband service tends to stop at the poverty line in the US.
The FCC approved Globalstar's spectrum for wi-fi. They want to create a nationwide wi-fi service and charge for it. No idea if the radios in devices can utilize it. Google of course despises this plan.]]>
He says that as Charter is set to eat two cablecos to become almost as large as Comcast. After AT&T just bought DirecTV. After Level3 and Zayo have gobbled up most of the smaller players - and as Verizon is buying XO. Competition you say?!
AT&T, Verizon and Qwest had $235 billion in revenues at the end of 2008, up from $73.3 billion in 1984, when AT&T was broken up. As I have written before, all of the other carriers' combined revenue doesn't match a quarter of revenue for Ma and Pa Bell. Comcast is only one-third the size of either carrier.
If you talk consumer competition in broadband, well, the FCC's Broadband Report says, "approximately 19 million Americans--6 percent of the population--still lack access to fixed broadband service at threshold speeds. In rural areas, nearly one-fourth of the population --14.5 million people--lack access to this service. In tribal areas, nearly one-third of the population lacks access. Even in areas where broadband is available, approximately 100 million Americans still do not subscribe." Even "8 percent of urban Americans lack access to 25 Mbps/3 Mbps broadband." And that is without talking about the price per MB of broadband or caps.
FYI... Cable television companies provided Internet access to 43 percent of households, although it was available to 88 percent of the population....DSL from telcos is available to about 89 percent of the population in 2013, according to Dept. of Commerce report.
In the B2B side, cable is winning this war. Comcast's CLEC business is approaching $6 Billion (since just 2006). That dwarfs almost all of the competition except Level3, WIND and C-Link. Zayo only pulls in $1.2B in annual revenue. XO and EarthLink are around $1B.
Google Fiber has about 110K subscribers! So the competition makes a lot of noise, but isn't winning the hearts and minds of customers.
The Special Access pricing docket is still alive and well. The real problem here is that cable and telco are regulated differently - and cable doesn't have to wholesale. Also, the definition of wholesale needs to be explained, because wholesale pricing - like volume pricing - is lower than retail in every instance but telco.
After at least $1 Trillion in spending via BTOP, BIP, CAF, CAF II, USF, RUS and private investment, there still is fiber to every neighborhood. Best estimate on lit buildings is 50% have fiber. The other 50% are still on copper, which is fine if they are within 7000 feet of a CO or have clear line of site to a tower.
One problem is that the few larger CLECs, while visible via PR, do not make their voice heard at the FCC. The voice for lobbying is done by associations like Incompas, CCA, CTIA, NTCA, WISPA and NCTC -- all up against USTelecom - and all with almost competing agendas.
Healthy competition is important for the Channel because without it, we may be squeezed out of a job.
The USTelecom and the Top 10 ISPs hold big sway in DC and at state capitols. They win big battles. They can sway legislation - and they have deep pockets to sue the FCC every chance they get. The rest of the pack: notsomuch.
How do you win?
Let's look at the first game of the NHL Stanley Cup playoffs last night. They were calling a lot of penalties last night - 18 of them. Plus the cheap shots and the fights. The Lightning won? How? By scoring. Focus on winning. Protect yourself but have a plan, execute the play and go score some goals. Same for the Competition.
You can whine to the refs (the FCC). You can hope for penalties to be called so you have your competitor short handed, but even short-handed, you still have to score a goal.
Most people go to a show to meet customers, to make deals. More of that. Want to help your members? Bring in more prospects and customers.
We need competition. We need the smaller providers to be financially healthy. We all need to be closing business.
SIDE NOTE:
One problem the telcos have is mentality. CLECs are used to resale, not owning or operating anything.They sell on price not value or brand. The ILECs can't comprehend competition. They think -- but I am the ILEC!!!!! It make it difficult to shift away from network to sell cloud or managed services. And we have examples of how tough it can be.
The other mental issue is nostalgia. So many are hung up on how much better it was from 1995-2003. No kidding! But get over it and realize those days are gone, learn some lessons from then and apply them to today as you get back to the hustle!
]]>Our ITEXPO panel on Open Source for Service Providers will be using Dialogic's study, which is examined in this blog post by Jim Machi of Dialogic.
Some good reads to start off the new year.
AVC's Fred Wilson on What Is Going To Happen In 2016
Alianza has a good read about Disruption to the cable industry HERE. It is based on an Accenture study about the top line growth of cable and the factors that may affect it.
Apparently, the cost to acquire a cellular customer is at least $650, as VZW is now poaching AT&T, Sprint, and T-Mobile Customers With a $650 Credit. How profitable can that be? In 2 years, that is $27 per month and ARPU is about $54 per month. Margins of 50% on cellular? This is what happens when the metrics are ARPU and new adds. Must get more customers (even unprofitable ones).
Five cloud experts give their predictions around cloud and security for 2016
Comcast gets more consumer complaints than any ISP. "The deluge of angry customers is so big that the FCC gets more Internet service complaints about Comcast than it does for AT&T, Verizon, and Time Warner Cable (TWC) combined." [ARS]
Level3 would like inter-connection congestion to be reported to the FCC as part of the "FCC's new rules requiring ISPs to supply more information on their management of networks to consumers." NCTA says Heck No! And they would because they don't want transparency on their artificial congestion (aka squeezing the tube that connects consumers to Netflix, Hulu, YouTube and other OTT content that they want to watch.)
Remember CarrierIQ? They were the company adding rootkit for monitoring smartphone usage for the cellcos. After scrutiny, they went belly up. AT&T bought the assets. Probably a joint venture with the NSA.
]]>AT&T saw a direct benefit of $15 per U-Verse subscriber with the DirecTV content contracts. And despite that, they are raising rates. Cord cutting will commence.
Every time there is a merger -- like AT&T-BellSouth, CenturyLink-Qwest-Embarq -- we are told how it is for the consumer benefit. Even when there are merger conditions, the entity finds a way to skirt delivering on its promises.
With all of the rate hikes and merger promises we should have Gigabit internet to every home in America. How is that working out?
The cablecos are looking to form one large entity - Charter-TWC-BrightHouse. For the consumer benefit. It is a big decision for the FCC.
The DOJ and the FCC have just one mandate: protect the consumer. Both have fallen on that mandate for most of my time in this industry. The DOJ hasn't done anything since 1982.
In Canada, Shaw is making moves after completing the $1.2B acquisition of data center company ViaWest. "Canadian broadband giant Shaw Communications has announced that it's buying Canadian wireless operator Wind Mobile in a deal worth around $1.6 billion." [press release here].
Interesting to note that Shaw used to own US cable interests that today Bright House Networks owns [according to wikipedia].
There is a report that Freshdesk, a SaaS customer support firm, buys mobile engagement startup Konotor in an acquisition that will help Freshdesk's mission to deliver omni-channel customer service.
]]>Cyber Monday crashed Target.com, but Tom Peters' fans crashed dropbox. Tom Peters put out an email to subscribers this morning with links to 14 chapters of Tom's top topics including Excellence, Execution and more. The chapters were links on dropbox. But it couldn't handle the volume so it shut off the account.
Happy Birthday to Microsoft Windows - now 30 years old! MS released Power Apps, which is their next billion dollar business line. BI has a view of it.
Analyst: Verizon and AT&T making $17/subscriber per month in 2015, while T-Mobile and Sprint are losing $0.39 <- headline says it all. [fierce]
Good read: Reality Check: The state of wireline through the CenturyLink lens. "As many economics majors know, being a 42% (Verizon FiOS Internet share; video is lower at 36%) participant in a duopolistic structure might be the best mix that they can achieve in their FiOS regions." As cable enters the cellular race, there will be revenue pressure on Ma & Pa Bell as cable starts chipping away at the former RBOCs last monopoly position. Comcast entering Enterprise doesn't help VZ either. Rumor had it they were looking to sell former MCI aka VZB, which turns out only to be a banker's wet dream.
2 biggest problems for RLECs and ILECs: New revenues are not growing (in absolute terms) as fast as legacy revenues are declining and their cost structures are not dropping as fast as legacy revenues - [from RCR]
Another billion dollar CLEC is pivoting: Granite. As the FCC decides if unbundling of voice network elements will continue, companies like Bullseye, Granite and Birch have to shift revenue to non-POTS. Birch made a deal to have access to 80,000 fiber lit buildings. (That means that most CLECs have access to those same 80K fiber lit buildings btw - either through commercial agreement or an aggregator like GTT.)
Granite has launched GRID, which is for malls and shopping centers. MPLS drop to the mall connects to Granite installed fiber channel and cat6 to provide voice, data and fat pipe (Internet) to the tenants of the mall or shopping center. It is targeted at the mall management company. Chasing Verticals is smart.
]]>Verizon decided to put its Enterprise business up for sale for $10B. Rumor has it that the data center business (formerly known as Terremark) has been up for sale for a while. Fortune is reporting that the $10B gets you Terremark and MCI. This makes VZ look more like Windstream. Yet with $118B in debt, you have to start thinking about paying some of it down. Seeking Alpha worries about VZ's future. The $495mill that IOT pulled in does not move the needle against the debt.
Let's not forget that Sprint has a wireline business just flapping in the breeze that they would like to monetize with a sale as well. Just the price may be too high -- as the case with a $10B price tag on MCI-Terremark.
In an unexpected move,Impact Telecom and TNCI have merged. Earlier this year, TNCI had told me to watch out for a re-branding effort after a debacle couple of years for the former rebiller (that sued agents). I didn't see the new brand; maybe this is it. " The newly formed organization, under the brand Impact Telecom, will provide innovative cloud and voice telecommunications solutions to businesses and consumers in the United States and Canada and wholesale carrier customers around the world." In other words, we will sell everything we can to anyone we can in North America. Please make checks payable to Impact Telecom. I will say that the strategy of the combined company continues the TNCI strategy.
Both companies are a mash-up of CLECs. "Blue Casa bought the TNCI business back in 2013 after it emerged from Chapter 11, and soon thereafter bought Pac-West to go with it. Meanwhile, also in 2013, Impact Telecom acquired Matrix, which itself had acquired Excel, Trinsic, and the SMB business of Global Crossing." [Ramblings] I guess it resembles a Birch playbook.
One company that does have a plan is GTT. "The year-over-year increases in revenue, gross margin, adjusted EBITDA and unlevered free cash flow are due primarily to the acquisitions of UNSi on October 1, 2014 and MegaPath's managed services business on April 1, 2015...On October 22, 2015, subsequent to quarter-end, GTT completed the acquisition of One Source Networks (OSN), a provider of global data, Internet, Session Initiation Protocol (SIP) trunking and managed services to Fortune 1000 companies. GTT paid $175 million for OSN...," according to GTT report.
"Having achieved our previously announced financial objectives of $400 million in revenue and $100 million in Adjusted EBITDA, I am pleased to announce that [GTThas] established our next set of financial objectives to reach $1 billion in revenue and $250 million in Adjusted EBITDA within the next five years." It's possible, but hitting a billion has not helped any CLEC - ask Intermendia or Paetec.
Jive bought Easy Office Phone. EOP is based in Ontario Canada - and Jive will use that as its base for Canadian operations. Jive gets a little help in portal and call center from this acquisition.
This is the second Canadian Hosted VoIP announcement. Shaw - a large MSO in Canada - rolled out a Broadsoft service last month. Canada's Hosted PBX space is getting as crowded as the USA.
ShoreTel bought another M5. In 2012, ShoreTel bought NYC based M5 Networks. This past week, "ShoreTel has snapped up Australian hosted VoIP specialist M5 Networks" in order to accelerate their go-to-market Down Under.
"Last week, the FCC proposed a $718,000 fine against M.C. Dean, the company that provides Internet services at the Baltimore Convention Center, over accusations that the company blocked Wi-Fi hot spots, as well as a $25,000 fine against Hilton Worldwide Holdings for what the agency called "apparent obstruction of an investigation" into Wi-Fi blocking." [NYT]
RingCentral had a good quarter. "The business had revenue of $76.80 million for the quarter, compared to analysts' expectations of $74.73 million. The business's revenue was up 35.0% on a year-over-year basis."
In Texas and Oklahoma, "LOGIX Communications has agreed to be acquired by an investor group led by Astra Capital Management," according to TelecomRamblings. Rumor has it that Alpheus will be next, maybe by the same PE firm.
Final note: Hargray, an indie telco in SC, bought an indie cableco in Georgia. Consolidation is everywhere.
]]>And firms - including Apple and Yelp - are also opposing a new cyber-security bill - CISA. Got to be tough to give all that Super PAC money and not get your way.
TechDirt: Tim Berners-Lee: 'Just Say No' To Facebook's Plan To Bastardize The Internet. To give free Internet to the third world, Facebook wants to subsidize it; limit it to unencrypted and approved sites; and watch all the traffic to design ads. How thoughtful.
The FCC had to remind carriers that booze and other personal items are not part of telecom costs.
Recognizing that viewers are tired of ads, Google Unveils YouTube Red: a $10 Per Month Ad-Free Option that allows downloading.
ESPN - the most expensive channel package on cable - lost over 3 million viewers in the last year. ESPN blames lite channel packages (like Sling, Google Fiber and others) and cord cutting. As a Chris Berman fan, I have been watching ESPN since almost the beginning. Look, Poker is not a sport. Hours and hours of repeated SportsCenter should only be on ESPN News! Why pay $7 per month for just Monday Night Football, some MLB games and basically for the NFL Network. It stopped being a top sports spot years ago -- and it catching up to them.
The difference between ESPN and Google is that Google takes risks and uses data to guess what its consumers want. ESPN only listens to sponsors. That is the problem I see with so many companies today.
Want to make money? Make the viewing experience personal. Then Boom! people will flock there and pay for it.
]]>"O'Reilly said that the FCC's decision "creates vast exposure for communications providers' market sensitive information, including pricing and other contractual terms," writes the cable news site MultiChannel.
We live in a pretty transparent world, where privacy is a fancy notion. Pricing and contracts -- even those signed in blood under NDAs -- are known by those that care to find out. There isn't much secrecy. The AT&T-DirecTV merger had as much secret info about content deals as TWC.
In the end this is just another case of inside baseball, where the DC Republicans will make noise about every Dem move- and vice versa. It is just noise, followed by lawyers keeping themselves busy. Annoying really. They should all be sent home without pay - wipe the slate clean - and pick new people.
"The Federal Communications Commission (FCC) has granted approval to Frontier Communications to go through with its acquisition of Verizon's local wireline, broadband and video operations in California, Florida and Texas." [cwa]
Meanwhile "Frontier Using $6.6 Billion in Junk Bonds to Fund Verizon Deal". Rob Powell declares it "expensive money" as Frontier bonds are paying between 8.875% and 11%. Where can you get that return?
The big worry is the leverage. An increasing amount of debt - expensive debt - does not pair well with flat revenue. Frontier's market cap is $6B -- what they are paying VZ for 3 states, after paying $2B for Connecticut. With just $5B in revenue and already almost $10B in debt, can you say over-leveraged?
Broadband is the key for the Duopoly. The copper lines are declining revenue for most ILECs, although Frontier does offer some unique value to its landline customers with SMS and other benefits. Will there be enough CAPEX to compete for broadband and commercial services?
Cablecos offer faster broadband speeds. People think that means everything. In pockets of every network are customers who can't get reliable service or the advertised speeds. In CT, where Frontier acquired AT&T's old SNET assets, Comcast's network is no great shakes according friends and family in CT.
In an interview, Frontier's CEO said that TV would be the fourth pillar to grow on. After this latest merger they will have 1.5 million TV customers. That is TINY! VZ will be left with about 4 million -- and that is on the small end. AT&T with DTV has about 27mill, which makes them comparable to Comcast. Tough to leverage just 1.5m subs in TV.
Like every other RLEC, Frontier is banking on a shift to broadband and commercial accounts. We will see how that plays out.
Another FCC hot potato is the Title II Internet Regulation, that the court will hear arguments in December. The opposition talks about stalled investment due to these regulations. Well, having been a watcher of the FCC policies since 2000, they say that every time and even when the rulings are favorable, there isn't a bumper crop of investment either.
If the RLECs and ILECs spend the CAF money as promised, millions of more homes will have broadband access available. (It won't mean that they will buy it.) And there are a number of ISPs of all flavors putting fiber in the ground for FTTH; fiber to the MDU (apartment buildings, condos, etc, especially in NYC, like Stealth Networks, and on the Gulf Coast, like Wavefly, MaxxSouth, C Spire and others are doing); and fiber-to-the -business in the form of multi-tenant buildings. Most of this fiber going in the ground is bootstrapped!!! Most ISPs are not using government funds to do it. Sothat poo-poos that whole argument.
Side Note: TDS is hitting 25% of its markets with fiber. Google announced more cities.
This isn't 2000. It is 2015 where putting fiber in is down to $700 per home passed according to the finance folks at Verizon. So why would investment be an issue?
Also, the cablecos are shifting away from video, as these companies finally acknowledge that cord cutting is real and their current business model is going to blow up soon.
The RLECs had to shift with USF Refrom. It is broadband that the USF (and CAF) care about now; not voice or access lines.
The rural MSOs had a wake up call in the form of the satellite guys cherry picking the top TV subs which made upgrading the network very difficult.
Most households just want ultra-fast, reliable broadband to power the tablets, gaming consoles, smartphones, Rokus, Apple TVs and Amazon Echo. Netflix, Hulu and other streaming services are replacing cable TV. It is all about Internet. Investment will have to follow because it is a race for broadband customers and revenue.
]]>AT&T gets a $100M fine for selling unlimited accounts that were impaired for big users. The FCC had to fine them because the FTC did NOT do its job. And then ISPs are bewildered by that? How? It is false advertising. It is total BS. What it really is: Big ISP wondering how their money didn't oil the gears.
Forbes pundit, Fred Campbell, writes a lot about the overstepping of the FCC. Does he notice the lack of effort at the other F-agencies (FTA, FDA, FAA)? Or that there is a huge transition going on that isn't just about the technology - copper or fiber or spectrum, it is about migrating many moving parts - LNP, E-911, broadband, voice, et al - and thousands of players to the new platform. Also, the telcos are sloughing off copper for a number of reasons - unions, pensions, competitors - none of which has to do with next gen networks or tech.
The FCC's main job is to protect Consumers. Have you seen the number of outages including on E-911 systems lately? How about the 2,000 consumers who complained to the regulators about slow Internet, high prices, and data caps from top ISPs? That is why the Net Neutrality laws are being used as a hammer. From a business aspect, you may not like the uncertainty of it, but from a user angle it is about freaking time.
Want to get rid of the uncertainty? Then (a) stop lying in ads about unlimited; (b) build the network you keep promising; (c) put all that spectrum you are hording into play; (d) take care of your customers and deliver on promises. It is that simple.
Politco has a report on the RUS department's failure (?) at administering the BIP broadband stimulus fund of $3.5 billion. More than 40 BIP projects never got started - out of 255 projects funded.
"A POLITICO investigation has found that roughly half of the nearly 300 projects RUS approved as part of the 2009 Recovery Act have not yet drawn down the full amounts they were awarded. All RUS-funded infrastructure projects were supposed to have completed construction by the end of June," the report reads.
" As stimulus-funded networks were built, the RUS was not tracking the number of locations reached or the number of customers who had signed up for service, the GAO noted." [telecompetitor]
Both the Telecompetitor article and the Politico report are good reads. Did they do poor management? Absolutely. One reason: Politics. Failures at both RUS and NTIA were kept quiet for political reasons. Plus those who won awards -- picked by a volunteer collection of people - - may not have been in a position to carry out the project or even the reporting. Florida's NRBA and its management crew had lots of screw ups and failures along the way. It is the government trough.
In the wake of USF Reform and the CAF Trials, 15 Small Telcos Could Lose USF Support: FCC Analysis Shows 100% Competitive Overlap. And 11 more may be voted off the island by you.
]]>Windstream is in battle at the FCC to get IP equivalent wholesale products from AT&T as TDM retires. It is not going well. (You would think all CLECs and Comptel would be roaring along with them.
A little more WIND news as residents of Alabama are taking Windstream to court over slow broadband speeds. Not shocking.
9-1-1 is falling apart in this country. No one notices until a huge outage. T-Mobile hit with $17.5 million FCC fine for 911 outages . Fines are great, but the FCC has to address the underlying problems with the 9-1-1 system, especially as we transition from TDM POTS calls to cellular, texts and VoIP. But, heck, the FCC hasn't fixed Rural Call Completion problems yet either.
So DISH bid on spectrum in the last FCC auction using a bunch of shell companies setup as "small biz" for credits and discounts. Well, the FCC caught on. FCC Poised to Reject Dish Partners' Spectrum Discounts Affiliates requested $3.3 billion in small-business discounts on $13.3 billion in winning bids.
So the FCC is approving the AT&T-DirecTV deal with some conditions. Will they actually follow up on these conditions? History says No. "12.5 million customer locations will have access to a competitive high-speed fiber connection. This additional build-out is about 10 times the size of AT&T's current fiber-to-the-premise deployment, increases the entire nation's residential fiber build by more than 40 percent, and more than triples the number of metropolitan areas AT&T has announced plans to serve." [forbes]
"The customer relationship management (CRM) market is mature, bloated and consolidation is going to continue for the foreseeable future. The upshot: Technology buyers need specialized CRM vendors, but they could wind up absorbed by a giant." So companies build their own systems. Why build from scratch when you can use stuff like tray.io, Idea2, IFTTT and the like?
74% of business buyers told Forrester they conduct more than half of their research online before making an offline purchase. [source]
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