On Rad's Radar? - fiber Archives

Go Deep, Not Wide

2013-05-30T17:12:46Z

Let's travel back in time to 1999, the time of the DLEC IPO. Covad, Rhythms and Northpoint all scored BIG IPO's. All went national. All failed.

Why? Some of it was ILEC hurdles; some was poor management; but mostly too wide, too fast.

Let's travel back to 1996. The Telecom Act allows CLEC's to print money by being a switchless reseller using UNE-P. Many tried. Some made bank. Some failed. Why? UNE-P was supposed to be a temporary way for CLEC's to enter a market; then they were suppose to transition to their own facilities. Many did not do this. They went wide - nationwide - where even the most successful with 250,000 customers wasn't nearly deep enough.

This time let's jump to 2002-2003, when Yipes, Cogent, WilTel, and others all filed for bankruptcy. All went heavy into fiber and fat pipe. All were national. All failed to go deep in any building it lit.

What's the common denominator here? All went wide and failed.

It is about density, deep, penetration.

Whether you have fixed wireless, cellular, fiber, DSL, EoC, or T1's, the thing you should focus on is deep penetration of your target geography.

Only one CLEC that I know of ever achieved anything close to 15% market penetration in a city of business customers. This year Comcast will likely hit 17-18% penetration of the SMB market in their entire region!

Deep.

Deep requires focus (and marketing).

Deep involves wallet share too. If you have a shallow pool to choose from, you have to offer a wide variety of services to get a share of everyone's wallet.

Think Deep, not wide.

Milk your own cows first.

Internet is like Electricity

2013-05-21T22:02:34Z

"People there told me that incoming businesses care more about access to fiber than any other attribute in a building," Susan Crawford said in a phone call. "It's very much like electricity. They want reliable service at a reliable cost." But businesses don't have to check to see if other utilities are available -- they know that electricity, water and phone are available every where. But businesses know that high speed Internet is vital to business success. So they have to check.

Why check? Because despite a couple of trillion in investment, fiber still isn't everywhere. And in many cases, it is still very expensive to have a 10MB x 10MB circuit.

In the competition for jobs, how many economic developers think about the fiber?

What Happens When

2013-04-30T05:35:58Z

What happens to the fiber companies that depend on FTT (fiber to the tower) when the cell companies decide to buy dark fiber to the towers? All the fiber guys build out based on a set of financial projects that are based on lit services. Along comes VZW with its RFPs for IRU's to its towers and all things change. Hear that? A bunch of folks just gulped.

Florida Broadband Litigation Woes

2013-04-24T04:52:14Z

"Florida Rural Broadband Alliance, LLC (FRBA) is a regional collaboration of local governments, community activists and economic development agencies from rural and economically disadvantaged communities located throughout 15 counties within Florida's Northwest Rural Area of Critical Economic Concern (NWRACEC) and the South Central Rural Area of Critical Economic Concern (SCRACEC)," reads the website for FRBA.

It continues, "The FRBA project will build a new Middle Mile broadband infrastructure, which will link together providers of vital public sector commercial services with private sector non-profit entities for the first time in these two struggling regions of Florida. At this time, only 39 percent of the FRBA region has broadband service. ...At the end of the 3-year build out period, FRBA's project will deliver up to 1,000 times the existing capacity within the coverage area. Doing so will create jobs."

FRBA received a $24 million dollar BTOP broadband stimulus grant in 2010. [Details about the grant are in this case study and on the NTIA site.]Unfortuantely, three years later there isn't anything but lawsuits, federal investigations and accusations.

The investigation into FRBA started in September of 2011. The Columbia County Observer has been steadily reporting on the problem. The real problem: that these rural counties didn't get broadband due to problems large enough to bring the NTIA in and halt payments. This action only precipitated some of the engineering firms to not get paid. One of those firms, Rapid Systems, has been in a court battle with FRBA.

I don't have all these details yet but FRBA, the North Florida Broadband Authority (NFBA) and the GSG, a management firm employed by both authorities were mixed up in the whole grant mess. The Ripoff Report has some serious allegations and isn't far off from the what I have heard. Somewhere along the way $30M was spent by the NFBA - but no paying customers are on that middle mile network that is not completed. Full disclosure: I have consulted with Rapid Systems, the GSG and the NFBA in the past.

It seems like a soap opera with a wrongful termination lawsuit aginst NFBA and now Rapid Systems' litigation against FRBA for $25M!

It will be something I keep my eye on. When the BTOP and BIP programs were launched, many figured the money would not be as productive as the government hoped. These aren't shovel ready projects. They took time to hand out, spin up, and get moving -- but by then how much of the money actually built anything? There is waste and fraud in every billion dollar program. At least this one was investigated early and clamped down on.

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.

Last Merger of 2012 - Maybe

2012-12-27T19:15:02Z

Sidera is merging with Lightower - to compete more effectively with the RBOCs, according to IBT.

The merger is being done by Berkshire Partners, a VC firm with no connection to Bershire Hathaway. It is a $2.2B deal. Both Lightower and Sidera are owned by VC's.

Lightower CEO Rob Shanahan will run the combined company, which will have network throughout the Northeast, Mid-Atlantic and Midwest, and provide access to more than 6,000 on-net locations, according to the BizJournal.

"ABRY Partners, which has owned Sidera for several years now, and Pamlico Capital, which is one of Lightower's major owners, will remain as investors in the combined company alongside Berkshire," reports Rob Powell. Powell reminds me that ARBY and Berkshire own TELx together.

This is a roll-up of roll-ups as Lightower consists of KeySpan, DataNet, Lexent, Veroxity, Open Access and NStar; while Sidera is mainly RCN coupled with ConEd, Neon, and Long Island Fiber Exchange.

This gives them a big footprint - and 6000 lit buildings is nothing to sneeze at - but $2B and you think you will compete with the RBOC's????

One problem with these mergers -- no one knows where the assets (fiber runs) are - which makes it very challenging to make this a profitable transaction. Plus when have these mergers ever worked out -- for anyone but the bankers? Bigger isn't better. Better is better.

2 Small Acquisitions

2012-12-14T16:49:47Z

Zayo just can't help themselves. Zayo is spending $22 million to acquire Litecast/Balticore, LLC. "Litecast owns and operates the leading Baltimore metropolitan fiber network, connecting over 110 on-net buildings, including all of the city's major data centers and carrier hotel facilities. Litecast is focused on providing dark fiber and ethernet-based services to a concentrated set of Baltimore enterprise and governmental customers, particularly within the healthcare and education segments." It fills in the greater DC area for Zayo.

Alpheus today announced that it has acquired Net Star Telecommunications Inc. Net Star was Houston's 3rd largest ISP in 2006, according to the Biz Journal and the company website. No financial details were available.

The $14 Billion Dollar Announcement

2012-12-03T18:09:34Z

While I don't agree with everything that Bruce writes here about AT&T's $14 Billion network spend in the next 3 years, there were a few take aways.

The big one is that the ILEC's have been getting rate hikes for years to pay for fiber that most customers are not receiving. FiOS is where it is - and that's the end of that project. U-Verse is fiber to the node and that isn't deployed everywhere either.

Mike Powell, former FCC Chair and now CEO of NCTA, has often gotten in woefully wrong in presenting the state of telecom. You can talk about top speeds all day long, but that isn't what the Majority of US addresses have access to nor is it the top speed broadband even remotely affordable for consumers - and even some small businesses (at $300 per month). The average US broadband speed is 6.6 Mbps. And if you don't bundle that broadband, it costs a lot.

Despite the promises and the rate hikes, telcos have invested $249 per person on average for broadband per year. Consumers spend on average $529 on broadband annually. At a retail job at $10 per hour that is one week's pay. Unsustainable!

62% of Americans buy broadband. That is all. Period. The market is flat.

Verizon and AT&T have a plan to disconnect the copper plant. VZ has already done so in the shade of Storm Sandy at the battery Park CO. All the CLEC customers out of the CO are out of luck, time and competition.

Telcos are basically unregulated at the state level - and the FCC is useless when it comes to enforcement and competition.

The point that everyone misses is this: our economy in America is service based. It is broadband fueled too - ask Apple or Amazon or Google.

Without cheap, fast Internet everywhere, what happens to that economy?

Clipping copper is detrimental to not only the CLEC's but to the majority of small businesses in the US. Ethernet-over-copper is quick to deploy and gives a great MB for the buck. EoC is the last stand against the cableco becoming the ILEC and the ILEC becoming irrelevant. (I laugh when the stock pickers only point to the dividend as if that was somehow any indication if a telco will tank or not.)

Promises from the RBOCs - Verizon and AT&T - for rate hikes or mergers have largely gone unenforced. The $14B announcement was just PR - spin. Nothing either company does is good for the economy, it is just good for them - for now.

How will Cloud services take off if the broadband is too expensive, unreliable or unavailable?

How will the Internet-centric economy stay competitive in that same environment? How does any of that withstand broadband caps and metering? How do corporations have more tele-workers in that same scenario?

AT&T's Big Investment

2012-11-14T15:03:17Z

AT&T announced that it would spend $14 Billion dollars on wireless and wireline networks over the next three years. What a bunch of hoopla over not much. AT&T already spends between $7B and $9B annually on its wireless network. The rest will be used to hit 1 million businesses with fiber. This will happen because both RBOCs want to shut down their copper network. They don't want to run two networks -- and they don't want to sell plant to competitors at wholesale. Those competitors are CLEC's, a bunch of whom rolled out EoC (Ethernet-over-Copper) in many central offices. MegaPath, Integra, XO and TelePacific are betting on the copper plant to provide as much as 100 MB to a business over copper. ADTRAN is the supplier, who is also hoping that the copper plant stays. Can you imagine the unemployment if the copper is clipped?

There is talk about AT&T using this big announcement to force state utility commissions to allow for the clipping of copper. If you want LTE and fiber in your community, then AT&T gets what it wants. Never has there been a better time for CLEC's to SELL DEEP and invest in their own fiber.

The Spoken Word

2012-11-01T20:21:12Z

I gave it a shot at podcasting some of the news tidbits. It's 5 minutes. Let me know what you think. Thanks!

Alpheus is going from wholesale to Enterprise. They are going to put their 7 data centers to good use for Hosted VoIP and SIP trunking, managed security, storage and vCompute. Alpheus will be utilizing type II circuits from cable, twt, L3 and Masergy.

Hostway stopped by my desk at ITEXPO to talk about their Cloud white label platform. Microsoft Exchange, Sharepoint, faxing, web hosting, managed hosting, PAAS, API development, database management, technology consulting, cloud migration - are all just a part of their offerings. To me that is too many things to be good at - or even clear about.

Hostway will tailor solutions for a solution provider (CLEC, VAR, whatever), including helping you decide what customers want to buy and how to market to them.

Colologix, a Canadian data center company, has expanded into Toronto and Dallas at 151 Front and the Infomart, respectively.

Zayo Grabs First

2012-10-17T21:07:54Z

First Communications came to my attention as a long distance company a few years ago. Since then it has sold off its LD business and focused on its regional fiber business. Zayo is going to acquire First Comm. for $110M.

Zayo is fiber ll the time. "First Telecom Services manages a network of over 8,000 route miles of fiber and approximately 500 on-net buildings. It is focused on providing dark fiber and wavelength services across its 11 state footprint, with the highest concentration of network and revenue in Pennsylvania and Ohio." This helps add some depth to Zayo's network map. The First network runs from Chicago to Toronto through Penn., DE, MD, NJ and Ohio.

Good News from CenturyLink Channel

2012-07-10T18:21:05Z

Sat in on the CenturyLink Channel Alliance - Get back in the Game Roadshow in Tampa this morning. It was nice to see Stacy Conrad from Microcorp; Josh Anderson and his co-workers from Telephony Partners; Dale Tucker from CCA; and put a face to an old Qwest SE, William Hobbs, now a CCA Emerging Sales Technology Consultant (ETSC) for Florida. Hobbs did a nice job on Why VPDC and The Benefit of Cloud over Colo. The roadshow had 3 parts (Hobbs did part 2):

New Savvis-CenturyLink Phase II Rules of Engagment overview;
Cloud/Hosting Solutions portfolio;
Third Party Data Center Updates/E-Line;

Dale Tucker went over the Rules of Engagement, You definitely need charts and glossaries to follow along the categories and acronymns. Basically, colocation, managed hosting, virtual private data center (VPDC), public cloud, private cloud, and managed servcies (like Hosted Microsoft Exchange) are all available to the Channel to sell at full commission - unless you engage an account exec - then it is HALF!

For agents used to working with AE's, this will be a bummer. However, half is better than zero. Also, with the ETSC as your godfather inside the C-Link-Qwest-Savvis beast, you won't need the AE.

A lot of colo and data center business comes from the Channel.

And for those that do not know how to sell Colocation and Data Center, the TCA has done quite a few webinars, including Getting Your Arms Around the Cloud by Allan Watkins of Total Telecom Management n Atlanta and Let's Talk Colo, moderated by Khali Henderson of Channel Partners magazine and featuring Dany Bouchedid of COLOTRAQ and Chris Palermo of GCN.

Tucker did mention that Savvis is working on a sales certification for colo and hosting. This silo will be a huge focus for C-Link it seems, especially with 54 data centers

Hobbs spoke about not talking about the technology of cloud, but about the business side of cloud, especially cloud services like VPDC and Compute-on-demand. It's about right sizing the data center. It's about OPEX versus CAPEX. It's about DR/BC. It's about getting out of the IT business and back to their own business focus.

C-Link also has an initiative to light up data centers with C-Link network - wave, IP-VPN, MPLS and Internet Bandwidth. There are 154 data centers now. In Jacksonville, FL, C-Link is putting in a ring to connect CSX, Peak10, Colo5 and the C-Link data center on a metro fiber ring. C-Link is also connecting 4 data centers in Charlotte on a metro ring. AboveNet did something similar in Atlanta by connecting almost all the data centers on a metro fiber ring. Agents can easily sell ELine, IQ Port, Private Port and WAVE into these 154 lit buildings.

Hobbs pointed out that the integration is going well with CenturyLink-Qwest-Savvis.

The Sales SWAT Team

2012-07-03T11:21:17Z

Zayo Group announced the formation of a dedicated team focused on Small Cell and Fiber to the Tower (FTT) initiative (in this press release). That's a good idea. In fact, when RAD-INFO INC is consulting on mergers between TDM companies and cloud companies, this is one approach that we have used.

There are different types of salespeople. Whale Hunters, farmers, transactional, good ones, bad ones, mediocre ones. Some companies grade the sales people as A, B, C. Taking a small group of A players to create a Sales SWAT team to take a product to market is a good idea. B and C teams can refer business to the "Closers" in the SWAT team. The compensation plan will have to be adjusted accordingly to provide for this type of sales structure.

Why a SWAT team? Let's look at the FTT market. The tower companies are merging together. SBA just dropped $1.45 billion to grab 3252 towers from TowerCo. SBA's revenue from 15,000 towers comes from mainly 3 companies: Sprint at 27%, while T-Mobile and VZW make up about 30-35% of the revenue. There are not a lot of cellcos in the US.

AT&T, VZW, Sprint, T-Mobile, Clearwire, Cricket/Leap, US Cellular, C Spire (formerly Cellular South), MetroPCS and nTelos make up the majority of the revenue. A bunch of rural cellcos make up the minority. That's why a SWAT team is a good idea. You know who the players are. You know that the sales interval is nearing its end. By that, I mean, that being the second fiber provider to a tower is way less profitable - and as contracts expire, it becomes a bidding war, which is even less profitable. So you want to be the first and hopefully sole fiber provider to a tower. The window is closing on this opportunity as cable companies, ILEC's, and regional fiber companies are all chasing this business. A SWAT team allows you to put the best people on it, give them a goal, a focus, and let them get to it.

Selling this focused to a small pool of prospects is more like selling for Boeing or Honeywell or a defense contractor. Boeing has a limited number of customers - airlines and friendly air forces. Boeing only has a few chances every 4 or 5 years to sell its planes. The Boeing's sales team spends a lot of time doing research on a prospect and even more preparing the sales presentation. READ: PREPARATION! What does a Police SWAT team do? Practice, Prepare, and Practice.

What does a typical telecom salesperson do? Run around chasing low hanging fruit. No practice. No prep. I see it time and again. On a tele-seminar last week, a sales guy was looking for a silver bullet. Is there a new way to prospect? Not really. Sure you can use LinkedIn to search for prospects, it is an easy way to kill an hour or so per day. However, the sales guy isn't doing research now, so would he want to do it in LinkedIn? Not likely.

I think more companies will establish Sales SWAT teams, especially for specialized services or product launches to get traction in the marketplace.

When I look at the Channel, I see carriers trying to find that perfect partner. Without knowing the skill set (like CCIE, MCA or CCISP) or specialty of a telecom agency, how would the carrier being able to help them specialize or provide them the service offerings (and accompanying marketing assistance) that would make for a successful partnership? For example, as a telecom agent, I mainly sell to service providers and mainly sell Internet bandwidth and transport. No matter how many times I tell that to carriers, they still try to get me to sell whatever the organization is pushing that quarter. What a waste of time.

Want a Channel SWAT Team? Look at the Agency's client base, history of sales, examine what offerings can be added to get stickier to that base, and make it about the Agency and its customers, not the carrier comp plan or what the C-Suite promised Wall Street.

When Cbeyond decided to go all-in on Cloud, it took a while to realize that they had to change more than the brochure. They had to change the sales force and th executive team. Cloud is not TDM. Cloud is not an Integrated Access Solution. If you want change - like to stop being a T1 slinger - you need to change culture, personnel, compensation plans, and your way of thinking. The whole company can't change overnight, but changes can be made incrementally with something like a Sales SWAT Team.

Tidbits About the GC-L3 Combo

2012-05-29T16:57:28Z

I sat through a 65 slide presentation from Level3 about the integration of Global Crossing. The stats are nice for trivia night. Maybe someday CVX will hold a Telecom Jeopardy so I can use this trivia to win prizes.

Level3 holds the original VoIP patent.
Technical Emmy for "Outstanding Achievement in Technical/Engineering Development.
Global Crossing (GC) was one of the first sub-sea cable operators.
GC was the first to market IP-VPN back in 2001.
GC was the 1st carrier to deploy global MPLS network in 2001.
GC has 140 SONUS VoIP switches throughout global VoIP backbone
First global provider with IPv6 natively deployed. (I thought it was NTT)
100,000 inter-city miles of fiber.
700 cities in 70 countries.
Approx. 170 metro networks.
344 IP-VPN core routers.
99.99% SLA.
L3 can LNP 86% of the NPA-NXX in the US.
Certified Microsoft Lync Nomadic E-911 Partner.
They left off: direct connect to Amazon AWS.

Level3 is THE Internet backbone. The GC ASN (AS3549) is going away. The GC network will be used for IP-VPN and MPLS and the L3 network (AS3356) for Internet.

The second half of the presentation was about the GC-L3 Conferencing options. Level3 has an extensive catalog for conferencing options, including Event services (like for earnings calls for public companies); web meeting; video center; webcasting and streaming. Webex and on24 are partners. There is a buy rate - and it looks very good. A lot of the conferencing is a result of Level3's vast VoIP network, CDN system, WAN optimization service, and video streaming operations. When you combine all that running an audio bridge for an earnings call or a video conference is simple.

Level3 uses the term IP-VPN and MPLS inter-changeably. It was confusing for me since VPN and MPLS are not the same technology. Oh, well, what's in a name. "IPVPN is the marketing name for MPLS."

I do have clients on Level3 experiencing network issues. Every integration that L3 goes through, they mess with the network while they shut down routes and routers to consolidate. This issue is giving Cogent a chance to take market share, while also opening up opportunities for other carriers like InterNAP and AS3561. It would be a great time for Sprint to flex its IP Network muscles, but all's wireless on the AS1239 front.

L3 has put in place Partner Integration Specialists to aid Agents in interfacing with the correct quoting tool, product people, and the like. Take advantage peopel! I would also say jump on the webinars to learn about the new offerings that can get you into bigger accounts. Smart WAN and website optimization are not for SMB.

L3 offers a direct connection to Amazon AWS for clients. Now, L3 offers SIP Trunking for Microsoft Lync: "As Microsoft® Lync® continues to gain market share in the unified communications (UC) space, we are seeing strong funnel growth and implementations around Microsoft Lync-based deployments in both our direct and indirect sales channels. Level 3 views this as a lucrative sales opportunity for our agents." Think Enterprise clients. According to this study, UC interest is in the Enterprise space.