RAD: What does LEOSAT do?
Ronald van der Breggen: LEOSAT is launching an MPLS network in space at 1440 km altitude. Once accessing this constellation of MPLS routers (mounted on satellites), we can carry traffic from anywhere to everywhere with lower latency than fiber and with capacities in the Gigabit range. Whether one wants to go from an Oil rig in the Gulf of Mexico to a mountain top in the Himalayas or from the middle of NYC to Abu Dhabi, this constellation will allow you to setup the connection almost instantly with a performance and security that exceeds fiber.
Interesting that they would setup an MPLS network now when everyone says MPLS is dead.
RAD: What did LEOSAT expect to get out of WAN Summit?
Ronald van der Breggen: Satellites are traditionally perceived as slow and expensive. So first and foremost we wanted to change that perception to one of satellites 'providing real solutions for global data-networking'. LeoSat can e.g. help Telecom operators to connect their global customers faster, help them in providing ultra-secure networking (LeoSat carries traffic physically separated from terrestrial networks), help them with connecting mobile sites, off-shore sites and sites in harsh environments. All of this can be done either as a last mile solution or as a more secure end-to-end solution. The list of options goes on and on and working with resellers and customers in Maritime, Enterprise, Media, Government, Oil&Gas and Mobile, we're enthused by hearing so many new application areas on an almost daily basis.
Ronald van der Breggen: At the WAN Summit, we enjoyed a lot of enthusiastic responses that lead to quite a few follow up meetings.
RAD: How is latency faster on a satellite than on a terrestrial network?
Ronald van der Breggen: Latency is indeed a lot lower, NYC-Tokyo is under 100ms, whereas terrestrial is 150-170ms. Even if a straight cable were built, we'd still be 20ms faster. As light traveling in a fiber optic cable travels at 2/3 of the speed of light, we start showing latency advantages when cable length starts exceeding 5000 km. Every satellites adds roughly 2ms in latency (conservative estimate). For extra proof read the Leosat FAQ
A press release that he sent to me: LeoSat Enterprises Contracts First Customer: Faster than fiber: Leosat's lowest-latency solution expected to revolutionize data connectivity in financial trading sector.
]]>I try really hard to avoid cablecos. They don't like the Channel; they don't like wholesale. It seems that direct sales reps can get pricing much faster.
Unfortunately, cable is chasing market share by practically giving away services. So with that in mind I had to get a quote for a EPL between Nashville and Tampa. This would involve Comcast and Charter. Let's examine the timeline:
Request for quote enters the system on 3/15. On 3/21 Survey shows FL location serviceable with construction. Sent email for pricing. On 3/28 after buffing them, I get "budgetary" pricing. On 4/3 client asks for contract. On 4/26 I am still waiting for paperwork and the "formal" pricing.
How does a company who "As of December 31, 2016, Charter's network passed 49.2 million homes and businesses, and served 26.2 million residential and small and medium business ("SMB") customers" take so long to price and run contracts?
I know it would be an effort but there's this thing called Google Earth that you can use to map your network, so every site survey doesn't take days. MasterStream has a pretty good interface for quoting. There are tools in this cloud age to take some fo the friction out of the process - if anyone actually wanted to.
This raises some questions:
I can't even fathom what a Desktop as a Service process must be like now that Navisite is under the Spectrum umbrella.
I know this looks like a bully pulpit kind of blog, but I can't be the only one who finds this ridiculous.
It gets better. One of the Tier 1 ISPs agrees to sell my customer a 1GB pipe that goes to Atlanta from Jackson, Mississippi. Route diversity was needed for my client, an ISP and VoIP Provider. Turn up took 111 days on a lit path. The Tier 1 ISP used Uniti Fiber for the loop. It was a mess.
The CFA (facilities assignment inside the central office where my client is collocated) was ignored, which created the first of a number of problems. TTU (test and turn up) was basically, "We plugged it in!" Repair had to be engaged to get it to work. (A new NID had to be installed.)
BGP took an extra week to get working properly. It only all started working properly yesterday. It was ordered on 12/19/16.
And the client says it routes to Dallas, not to Atlanta. Fantastic.
I turned up another circuit with an ILEC. It was a 20 MB DIA, but I guess 20x20 had to be specified, because it came up at 18x6. I don't even know how you make these kind of mistakes. This was noticed on the day after turn up, but we had to go through repair to get it fixed after the turn up engineer ignored all emails for 3 days.
What the hell is wrong with telecom that they can't just do the job they are hired to do? Every day we hear about airlines having big issues, but telecom firms have even more problems. I think it is just that we EXPECT them in telecom.
All I keep thinking is: If they can't deploy Internet pipes correctly in a timely manner, who would want to try using them for something complex like IAAS or security or UC?
And let's let them do more M&A! Everyone of the carriers listed has been involved in M&A in the last year. All of them suffer from the integration -- or choose to blame it.
]]>Level3 CEO and President Jeff Storey is poised to get a huge prize for selling the company off. Isn't that great? For him, yes. He gets a "$1.2 million bonus after the Broomfield-based telecom's $24 billion acquisition by CenturyLink Inc. closes. In addition to the $1.2 million bonus payout, Storey is slated to receive an accelerated stock grant worth $3 million after the transaction with Monroe, Louisiana-based CenturyLink." Agents, meanwhile, get to wonder what happens post merger. How messed up will the networks be? How convoluted will ordering and quoting be?
After both Transbeam and NITEL announced that they are adding SD-WAN, MegaPath launches SD-WAN aimed at the SMB. That is the same place that SimpleWAN plays. SimpleWAN is up for the 2017 Venture Madness business competition in Arizona.
Velocloud raised a series D round for $35M. Many startups will look at this (and the SNAP IPO yesterday at $26B) and think that doing a startup is like buying a lottery ticket. In a sense it is, but building a business -- even to sell it quick -- still requires hard work, execution of an idea AND a plan, and sales. Velocloud is signing up partner providers faster than a PR firm can add them, but that doesn't result in meaningful sales for a long while!
You can learn from failure. #startup stories.
In the heat of SD-WAN, I wonder if people realize how shaky Cisco (and other router manufacturers like Juniper and ADTRAN) are? The SD-WAN white box is not a Cisco. It is an OEM that can be a router, a firewall, an access point, a Cradlepoint, darn near anything because we just push the software update to the box and either install the card/WIC or activate the card/WIC. The white box is replacing the traditional gear. Cisco and ADTRAN are in the box business. So are VARs. What happens next? Pay close attention - it will be a lot like the PBX Business, but decline a little faster.
Satellite ISPs OneWeb and Intelsat are merging. Consolidation in every sector of the ISP market - MSO, ILEC and now sateliite.
Verizon wins top honors from Frost & Sullivan for capturing more than a quarter of the North American VoIP and SIP Trunking Services Market.
CenturyLink makes changes to its Alliances and Strategic Partnerships programs.
In the EarthLink-Windstream merger, the ELNK channel chief, Olen Scott. emerges as the new channel head. "Jason Dishon, Windstream's former channel chief, has left the company to pursue other opportunities." It is a constant state of musical chairs in telecom.
]]>
"Put it all together and you can see a day when you're watching content that Google produced disseminated via infrastructure that Google owns on a phone that Google made using wireless service Google brokered." Amazon tried it and failed. Google's phones are nice, but the Fi service has done about as well as Google Fiber.
The opposition - the cellcos, the RBOCs, the ILECs - don't want to be just dumb pipes. That's why Comcast owns NBCU; AT&T is buying TimeWarner; and Verizon owns AOL and is buying Yahoo. They want to own the whole OSI stack - Layer 1 to 7 - the walled garden that was AOL.
Facebook wants the same thing. Amazon, Microsoft and Google, too. Live in their ecosystem, where they collect as much data as possible to target you better to sell you more.
Amazon is selling ISP service, as a retail channel for Comcast and Frontier, not as a virtual network operator.
Meanwhile, a bunch of articles over the last two weeks talked about the ILECs lack of investment in broadband. Cable Will Keep Ruling US Broadband.
LightReading states, "All seven of the top MSOs registered broadband subs gains in the summer quarter. Over the past year, the cable companies have added more than 3.5 million data customers. Once again in contrast, five of the seven leading telcos lost broadband subscribers overall in the third quarter as they focused mainly on upgrading their DSL customers to fiber lines, not bringing on new customers." Once again telcos are late to the game - in TV and in competing against DOCSIS. Telcos were even late to get in the DSL game, afraid of losing T1 business. They have always had short term thinking.
"More than 80 service providers have opted out of participation in the Lifeline broadband program for at least part of their territories," writes Telecompetitor. Verizon, AT&T, Cox, Windstream, Charter, CenturyLink, FairPoint and Frontier have all opted out to the FCC. Part of it is "rural carrier stand-alone broadband pricing"; and part is the 10MB x 1MB requirement which DSL can't meet.
Meanwhile, telcos have to re-think their TV strategy in the wake of OTT video. A consortium of them should buy DISH Network and its Sling TV.
After Google Fiber's debacle in 2016, all providers will re-evaluate fixed wireless instead of a wired strategy.
Maybe g.fast makes its way past some trials in 2017.
Will Comcast, Charter or Google become the number 4 cellular provider in 2017 after AT&T, VZW and a combo of T-Mobile+Sprint.
FiberLight, LUMOS, Sprint wireline, Fatbeam, Wilcon, Towerstream, and some others will likely be part of some M&A this year. No one saw Fairpoint getting picked off by Consolidated - or the pending Level3+CenturyLink disaster.
Another year of turmoil coming at you! With a new FCC.
One thing all this says: we don't know what will disrupt in 2017.
]]>Content and ad money is the only area of growth for the Duopoly.
An analyst is projected that Cable companies will be the Incumbent Phone company in 2017 due to the number of cable phone lines sold compared to telco. The RBOCs have been trying to get out of the incumbent label for years, much to the chagrin of their ILEC brethren like Frontier, Windstream, CenturyLink and Fairpoint, who wish that the RBOCs would shut up.
The RBOCs have cellular, voice, data, broadband, big pipe, managed services, data centers and cloud in the catalog but the cash cow was the consumer triple play. Much like EarthLink and AOL floated on dial-up revenues for years, ILECs float on wireline revenues. Unfortunately, cable is eating their lunch in the broadband market.
Easier to dump a billion or four into a company that will provide some top line revenue than spend $24 billion on fiber to the home, where Verizon lost money.
Telco has pension and union liabilities that cable does not. These liabilities are now mainly under the RLEC umbrella in the form of CenturyLink, Fairpoint and Frontier, who purchased assets from many other ILECs and RBOCs, including the pension liabilities. It is quite the financial burden.
Content is the next revenue stream for the telco, following in the footsteps of cable, who have owned TV stations and content for years.
No idea how the telcos arrived at advertising as a viable revenue stream (maybe they are following Google's model). Yet "AT&T reports $1.5 billion and growing in annual revenue for its AT&T AdWorks division. That unit aggregates 14 million households and 35 million set-top-boxes nationwide, managing ad inventory across national ad-supported cable networks. AT&T claims it's the largest addressable advertising network in the industry, thanks in large part to its acquisition of DIRECTV." [telecomp]
It looks like we will soon be back in the days of AOL and Prodigy, where your ecosystem will be defined by your cell phone operating system (Android or Apple) and cell provider and broadband provider. The cellcos are providing free bandwidth for staying inside the ecosystem, making it tough for companies like DISH/Sling, Netflix and Layer3. Captured users, eyeballs, viewer habits, buying habits, ads, etc. will result in big money per user. It is a similar model that Amazon uses with Prime and Kindle. Users of a Kindle device buy Prime and spend more than 3x what a non-Prime member spends. And we keep it in the ecosystem. Google, Apple, Amazon, AT&T, Verizon and Comcast all competing for you.
]]>Telcos spent billions on both fiber and TV services. [Verizon reportedly spent $23 billion rolling out FiOS since 2004, some of it from rate hikes, some from government subsidies.] Unfortunately, by the time telco TV, like Windstream's Kinetic, is widely available cord cutting is accelerating.
From DSLR, "Telco TV and satellite TV providers saw record pay TV subscriber losses last quarter, according to the latest analysis by Leichtman Research. According to Leichtman, the pay TV sector lost about 210,000 subscribers last quarter, though this figure is dramatically lower than the 430,000 subscriber net loss stated by Wall Street research firms like SNL Kagan. While traditional cable providers "only" saw a net loss of 90,000 video subscribers last quarter, the telcos were particularly hard hit, losing 375,000 video subscribers last quarter -- compared 45,000 during the same quarter last year."
In the broadband realm, "Cable companies added a net of 775,000 broadband subscribers last quarter, compared to a net loss of 150,000 broadband subscribers during the same period," writes DSLR. [see chart here]
For consumers, it is all about the Internet and smartphones, according to Pew.
Telcos didn't want to get into the DSL game. Mainly to protect a highly profitable T1 business. The same way they threw obstacles at Google Fiber, the LECs threw obstacles at the newly minted DLECs - NorthPoint, Rhythms and Covad. Sure, some of it was incompetence on the part of the DLECs and GF, but the hurdles kept tripping them up. After they all filed bankruptcy, the RBOCs decided to get into the DSL retil game, to the chagrin of the independent ISP, who was finally making money on DSL. Undercut by the vendor, many ISPs failed or limped along for years, which affected many small businesses as the ISP was usually the local computer expert and Internet Provider. This was something that the LEC could not provide: personal service to the small business. To this day, the Duopoly can only supply commodity service with almost non-existent support. As they have gotten bigger and bigger to take advantage of scale, the support to the small business has suffered.
Small business is 99% of the businesses in America. Yet every provider wants to go up market.
There are almost 28 million small businesses in the US and over 22 million are self employed with no additional payroll or employees (these are called nonemployers). Over 50% of the working population (120 million individuals) works in a small business. But it is under-served by the Duopoly.
From the FCC's 2016 Broadband Report:
Think about those numbers. VZ spent $23B. Other telcos spent billions. The FCC donated billions in BTOP, BIP, ARRA, CAF, CAF II and USF funds to the effort to build out broadband across America. Private companies (PCOs, ISPs, WISPs and CLECs) have invested hundreds of millions more. Cable dropped bilions. Yet not everyone has good Internet????Or a choice of more than 1 ISP?
I have to wonder where this goes. The telcos spent billions to get triple-play just as that bundle becomes undesirable. They now have to build out fiber to stop losing broadband subscribers, so more hundreds of millions. At a time when their debt is High - and the pies for TV, broadband and voice are stagnant. Even cellular has peaked.
They are all chasing Enterprise, which I imagine means 500+ employees. There are only 30K businesses in the US with more than 500 employees. So Comcast, Charter, AT&T, Verizon, CenturyLink and Windstream are fighting desperately over the same 30,000 businesses and government contracts. With VZ acquiring XO (approved today); C-Link acquiring Level3 (ugh); and WIND Buying EarthLink, that leaves Zayo as the sole big indie.
What happened? Bad short-term decisions that cost jobs, revenue losses and more CAPEX spending than if they had just done it from the beginning. To still see announcements from the telcos about Gigabit deployments in select cities is just plain sad. The monopolies that were the Bell companies re-constituted but lost their edge. It's like they don't know how to compete at all. They just lean on their brand and hope for the best.
EoC wasn't widely enough deployed and sold. Yet everyone is banking on SD-WAN, which will likely just make SLAs crumble.
Small business has suffered from this mess -- and further with the mega-mergers and consolidation. Small businesses - all businesses - rely on telecommunications to do business. The Internet is vital to our economy. Let's hope we don't stifle it anymore.
]]>CS&L, the telecom real estate investment trust (REIT) spun out of Windstream last year, owns the copper and fiber assets that Windstream exclusively leases for its network. CS&L bought Tower Cloud and PEG Bandwidth to add to its fiber portfolio. CS&L lost $4.1 million during its 2016 third quarter on $200M in revenue of which 82% comes from WIND. CS&L will "acquire Network Management Holdings LTD, a private company that owns and operates 359 wireless communications towers in Mexico, Nicaragua and Colombia" for $65 million. Towers are like real estate for a REIT. Fiber is still an asset to rent in a REIT. Surprisedly, Level3 nor others have spun out fiber, data centers or other assets into a REIT as a tax savings entity.
As I wrote my column for Internet Telephony magazine last night, Tony Thomas must have read my mind. WIND CEO says that SD-WAN and UCaaS are the driving forces for the WIND-EarthLink merger -- and where success will come from for similar telecom providers.
Cellular companies have started counting all Internet connected devices as number of handsets slows down. In the latest quarter results (see here), it is all about the notes:
"Subscribers include retail and wholesale connections of both traditional and new connected device categories (e.g. M2M). Verizon Wireless subscribers include Strategy Analytics' estimates for wholesale and connected device volumes. Sprint subscribers and net adds exclude affiliate subscribers, but include wholesale."
The blended ARPU is diminished by M2M and IOT device revenue. And this will continue. Family plans, hotspot add-on, tablets at $10 per month - these are the tricks that will need to improve going forward for ARPU to not slide off. Or they will have to break out M2M and IOT which they can't do.
]]>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.
]]>I wonder back to when AT&T tried to buy T-Mobile in 2011. That Obama Admin said NO. Despite the fact that AT&T was actively helping the NSA and other 3-letter agencies since before 2006, when Klein exposed Room 641A.
Then there is the other program that AT&T runs for the feds: "Hemisphere was used far beyond the war on drugs to include everything from investigations of homicide to Medicaid fraud." The Daily Beast explains how AT&T is spying on Americans for profit. (It would be weirder if they were just doing it for fun.)
Barry Eisler spells out how all this works via his "fictional" book God's Eye View.
AT&T has hedged its bets since the T-Monile No. It won approval for DirecTV. It plans to get a Yes from the DOJ - and has told the FCC that they don't have a say in this acquisition.
From NEXTDRAFT by Dave Pell: "Will the AT&T acquisition of TimeWarner get federal approval? Before you place your bet, consider this data provided by the NYT: "AT&T is the biggest donor to federal lawmakers and their causes among cable and cellular telecommunications companies, with its employees and political action committee sending money to 374 of the House's 435 members and 85 of the Senate's 100 members this election cycle."
Why are they buying TW? Well, to catch up to VZ and Comcast. And because all the pies are flat. AT&T had a bad quarter. VZ has a had a couple. They are laden with debt. Cellular which is half the revenue or more is being picked apart by T-Mobile and to a much smaller extent Sprint. Cable is eating the wireline broadband lunch*. Since all of the bets were on cellular, it is now a run to use fixed wireless (LTE or licensed) for broadband deployment which will increase ARPU for them -- and the bills to consumers.
Ma and Pa Bell have spent tens of billions on spectrum. They will use it to get out of terrestrial broadband and have everything be wireless. They will still have to figure out the T-Mobile problem as well as the cable wi-fi problem.
They want content to build a walled garden - like Facebook or AOL before them. When you own the content you can be king, just ask Comcast/NBCU or Disney.
The one thing that will kill off the telco is an economic depression. When the US experiences another economic slowdown - like say 3Q2017 - consumers will have a lot less money to spend. That means ARPU will not go - and subscriber counts will go down. When you have to eat, you skip HBO and cable TV.
The auto industry is already feeling this crunch. More leasing, less sales, more discounts, interest free loans. The cars last longer. And driverless cars are coming.
One reason for immigration is to actually increase the population of the US. Millennials aren't having kids - in many cases because student loan debt and poor salaries make a child too expensive, except by accident.
In the midst of this noise 2 things to note: (1) ABRY is selling Masergy to Berkshire Partners for about $1 Billion dollars. The reports say $900M; I was told it is more than that.
(2) Google Fiber is laying off. The CEO of Google Access, Craig Barratt, is also stepping down. Too few subscribers, too many hassles means they will try fixed wireless then probably call it a day. The Duopoly of cable and telco have successfully squashed competition. And for all the little guys cheering, it could be you next!
Please note that in the middle of all this, despite the skyrocketing analyst forecasts, cloud computing is not mentioned in this scenario. Why? It amounts to peanuts in revenue for the Duopoly. "Total SaaS/PaaS revenues of top 50 software companies globally are $22.4B. Microsoft, Oracle, IBM, SAP, Symantec, EMC, VMWare, HP, Salesforce and Intuit are the top ten software companies worldwide," according to Fortune and PWC. Unless they were to buy Salesforce to gain $5.5Billion in revenue, they have to go content. Microsoft bought LinkedIN for $26B!! And LI revenue isn't even $4B dollars.
IOT isn't even a billion dollars in revenue for VZW yet. So how do you move the revenue needle at the former Bells?
* Per telecompetitor, "The number of U.S. fixed broadband subscribers dropped by nearly 200,000 on a net basis in 2Q 2016, a decline of 0.2 percent, according to the latest market data from Point Topic."
]]>Krebs experienced an IOT botnet attack earlier this month. An ISP client was under two DDoS attacks in August.
These attacks are increasing in frequency -- and are not going away. This will be normal business soon.
Email and iPhone hacks are in the news.
What are you doing to protect your clients?
Quite a few data centers offer a DDoS Mitigation service. (So does Level3).
There are a number of managed security service offerings - from firewall to IDS to UTM* - available from a number of providers.
In a time when bandwidth pricing is decreasing -- and customers want to spend less -- someone needs to bring up the topic of security and redundancy. Why not you?
*Intrusion Detection Service and Unified Threat Management
]]>Lots of consolidation - just ask Birch, Level3, Windstream, GTT, Zayo or CenturyLink. But really has anything changed?
There is a lot more fiber in the ground. AT&T just announced 500,000 miles. Lots of lit buildings. Birch just said they touch more than 80,000 commercial locations. I would imagine any of the Top 5 MSOs touch at least that. The one thing that has changed is who owns the small business market. Today, that is the cable company, not the ILEC (at least in NFL cities, maybe not in rural America).
The small business voice market seems to belong to the independent OTT providers like 8x8, RC, Grasshopper and Vonage.
But the CLEC sector borne from the TA96 seems anorexic. VZ and AT&T have more than $75 Billion in Quarterly revenue, which is more than all the CLECs annual revenue combined. In a Quarter. The billion dollar CLECs - XO, Intermedia, Paetec - are all distance memories. Yeah, XO hasn't been bought yet, but it has faded from memory. The DLEC group that actually started the business DSL market all went bankrupt and were acquired by the Big Telcos.
The fiber pioneers - Yipes, Cogent, MFN, Williams - all went BK at some point. So did MCI after a spectacular financial mess.
The UNE-P players - Supra, Z-Tel, IDS, ITC, MacLeod - all gone. The largest IXCs - MCI, Sprint and AT&T - are no longer. MCI is now VZB; AT&T was bought by the Baby Bell, SBC that consolidated most of the Baby Bells back into AT&T a little more than 20 years after they were broken up by the Judge.
Remember when FREE was a threat? AOL, Bluelight, NetZero, Muni Wi-Fi (from EarthLink). Today, free is a model! Ask Facebook, twitter, snapchat, Whatsapp, Skype or almost any SaaS company.
Zayo, Level3, Birch and let's include Wind and C-Link ($2Z + $8L + $1B + $6B + $18C) - throw in the $1B from EarthLink (which will be less since shedding the IT business) - and you still only have $19B in a year. All of the money is flowing to the Big 2 RBOCs and the cablecos - still. And since AT&T bought DirecTV, yeah, still.
Unlike Howard Homonoff in his review, I think that the upstarts have been the ones who pushed the establishment forward. The ISPs and CLECs that forced the Duopoly to learn to compete, who did the real work of bringing the Internet to the people. It was also the upstarts that taught real world lessons to the Duopoly - lessons about fiber and DSL and business Internet - and yes even about Converged Networks.
As we start the next 20 years, it will be Amazon, Google, Apple and Microsoft who define some of the race. IOT may change things, but you still need a network. As much as the Big Two Telcos hate to be dumb pipes,they will take your money. (And provide crappy support.)
A couple other points.
Wireless porting between Sprint, AT&T and VZW is done in hours via Syniverse. Wireline porting is still anyone's guess and is measured in weeks, not hours. Why?
Cable went from the lowest margin business - TV - to the highest - voice, while telcos did the opposite. And probably should have left TV alone.
Comptel changed its name to Incompas. CEO Chip Pickering talks about the anniversary here. " I want to point out the incredible benefits of the legislation to the economy and society -- from the creation of new companies, new technologies and entire new industries to the technology solutions that have risen from the Act to help share information and reshape our world."
The sharing of the network elements is all but gone. It is a race at either Layer 1 (network plant) or Layer 7 (apps). No one owns both.
No ENUM. No VoIP Inter-connection. Oh, well.
For the channel, it used to be all about voice. Now it is mainly about data, Internet and cloud.
TA96 was about a resale model - unbundling or wholesale - that would lead to facilities based competition. That didn't happen so much. It was all about voice though. Now way more about data/Internet/Network than voice.
Gary Kim shows the decline of access lines graphically here.
There was frame relay and ATM networks that were supplanted by IP-VPN, MPLS, VPLS and soon by Ethernet private line if cable has their way.
It was AOL and Yahoo 20 years ago. Now VZ owns AOL; Yahoo is for sale and Google is the giant.
Gary Kim point]]>
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.
]]>Sprint gave its employees layoffs for the holidays. Despite the cash from Softbank, Sprint is losing ground to T-Mobile and has little hope of catching up to Ma and Pa Bell (ATT and VZW). It isn't about price as much as it IS about a quality network. Access to exclusive phones doesn't hurt either.
In positive news for this cellco, Sprint teams with Conversocial to become the first US telecommunications brand to introduce Messenger as part of their social care strategy.
Lots of throttling claims from YouTube, DISH and others to both wireline and cellular network operators. It figures.
It leads to an interesting question: Should ISPs filter the Internet for their customers?
Broadband use is down from 70% to 67% in homes in the US according to Pew. They probably can't afford it.
Lightower Fiber Networks has acquired network assets from HarborLite Networks, based in Baltimore, Md., which includes fiber in downtown Baltimore. Always good to buy fiber density in an NFL city.
Microsoft acquired Talko. Dan York talks about what that means here. Basic problem with every new talk or text app: You need network effect for it to work. Hyper-crowded market right now. And no one has a Snapchat problem.
Altice is trying to buy both Suddenlink and Cablevision. New York State authorities aren't buying their story about network upgrades. For once, consumer good IS being looked at. The authorities have to know that once they say YES, there is no way for them to enforce acquisition conditions. And every major acquisition that has come with conditions has had the buyer skirt them.
ShoreTel is buying Corvisa out of the UK and Netherlands for $8.5M.
IBM and BellSouth had a short history of working together. Now IBM is taking over AT&T's Managed Hosting Services. If you can't be good at it, outsource it!
Happy Holidays!
]]>"Today, nearly 40 percent of American households either do not have the option of purchasing a wired 10 Mbps connection or they must buy it from a single provider. Three out of four Americans do not have a choice of providers for broadband at 25 Mbps, the speed increasingly recognized as a baseline for broadband access."
The discussion revolves around - surprise - arbitrage! There would be investment IF there was enough money in last mile residential; if regulation was lighter; if, if, if.
Quite a few feel that the answer will be wireless. I don't think there is enough spectrum for that, but I could be wrong. And even if there is enough spectrum, metered pricing will crush every wallet.
That said, I think many people don't have a real good ground view of telecom. In many parts of America, there are a number of independent players (non-Duopoly) that are rolling out fiber to the home or fiber to the MDU (condo/apartment building/etc). Stealth in NYC; Socket in Missouri; Sonic in Cali; and Hunt Telecom in much of Louisiana where they are laying fiber to businesses and schools.
WISPs (wireless ISPs) who typically use fixed wireless gear to offer broadband have been transitioning to fiber in a number of rural communities, like Shelby Broadband is doing in KY. And they are doing that without government funds - all bootstrapped.
Another theme is that investment is down in broadband due to the Net Neutrality rules that are being argued in SCOTUS. *cough*cough*bullsh!t* Investment appears down for a number of reasons.
One reason is that the investment dollars of the ILEC/RLEC group are government funds from USF, CAF, RUS, NTIA right now.
Number 2: The cost to pass a home with fiber when FiOS started in 2004 was about $2700; now it can be as low as $700 depending on density, geography, topography. Also, the biggest spender in FTTH was VZ with FiOS, so investment has declined since they stopped spending the $24B. C Spire and Google aren't going to replace that kind of spending. However, CenturyLink's Giga announcement and Windstream's 100Mbps PR are shining some light.
Number 3: I have been in the room when execs at AT&T have said they have no answer for DOCSIS 3.0. Verizon did a co-marketing deal with the cablecos (as part of the SpectrumCo deal). That isn't competing!
How deflating do you think it was for ILECs when Comcast said it was doing 2Gbps?! That isn't about regulation. That is like being in a high school boys locker room and realizing that you have puny equipment muscles.
ILECs don't cross LATAs any more than cablecos do. Only WOW! and RCN overbuild. Wholesale agreements to get FiOS and U-Verse access have been ridiculously hard to acquire until just these past few months. APEX by AT&T opened up U-Verse infrastructure to wholesale partners. Verizon is a little stingier with FiOS probably due to their outsourcing wholesale to one person in a nursing home in Phoenix who only has phone access an hour a day. True story. Ask any VZ wholesale customer.
Until a vendor comes along like Hatteras did with G.SHDSL making it easy to deliver g.Fast to premises end to end, DOCSIS 3.0 will win. VDSL2 is just now becoming economical and stable. And the deployment costs for VDSL2 with fiber-to-the-node is less than FTTH. I think if you didn't see the industry from the ground level, you can make pronouncements all day long that are misleading or skewed.
We need the best broadband network in the world if we are going to compete globally. If not, no one will be able to pay their cell phone bill.
]]>Step into 2015 and FTTX is huge. Yes Comcast has Gigabit2, CenturyLink is rolling out Gigabit along with AT&T, TWC and others. Yet the majority of FTTH projects are not from the top ISPs. They are from the smaller, more nimble providers in communities.
On the product side, it hasn't been the Big Boys (Top 10 ISPs). [BTW, here is an interesting map of the ISPs by state majority.]
The Big Boys are working on ways to compete with Netflix and Sling TV, especially Ma Bell. AT&T is really trying to design a bundle that will appeal to a large swath of the market by trying Hulu, Amazon Prime, HBO and now a wireless receiver. Frontier is rolling out a Tivo that can DVR streaming content. Showtime is bundling with Hulu now too for additional OTT options for cable cutters. Nothing wrong with testing out different options and avenues.
In a twist, start-up firm Insensi is debuting the ILY Family Phone to re-invent the home phone for the elderly and children. It is eight-inch touchscreen device without a browser for video and voice calls and some messaging among family.
One of the most creative ILECs is Frontier. Yeah, I know, I am surprised and sad at the same time. Frontier just announced a bundle with Nest. They are going Google and Home Automation, which is where AT&T, Bright House and others in the Duopoly see the quad play going. Own the Home.
I remember when Powell was FCC Chair -- oh, those dark days - it was all about the converged living room. Years later, with the help of manufacturers, your TV with Xbox can watch you!!! Now that is converged.
There are lots of ways to skin the cat to provide a valuable bundle to your customers. Copying what others are doing isn't likely to get you to stand out. Be inventive. It's okay to fail. Just learn and try again and again.
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