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.
]]>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.
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With this crowded of a field, there will be factors that position you better. For instance, playlists, especially suggested playlists for workouts, seems to be a highlight for many. Another is the catalog of music. (Many complain that some services are more like public radio stations repeating the same 25 songs all day.)
For me, SiriusXM radio is a nice to have because no commercials.(What does that say to advertisers that TV and radio is annoying because of ads? It says that your attention interruption methods are out dated and suck! Get some fresh tools!) I like Pearl Jam radio and Pulse. You get 6 months free with the car purchase. Then it's renewal time. Mailings, emails, phone calls about renewing your service. The offers are all over the map - from $10 per month to $30+ - with savings this and savings that. I signed up for another 6 months on a credit card I was going to cancel anyway because auto-renewal (at a higher rate) was part of the deal.
So now its letters, calls, emails and the haggling begins anew. SiriusXM called me last week and didn't even give me a chance to say "I can't talk now." I called to cancel today. After 10 minutes of hold (with annoying hold messages), I got 4 offers in 5 minutes. I have to ask. Why?
Why do folks dislike shopping for a new car? Haggling. What makes SiriusXM think anyone would like this. They kept saying "We value you as a customer." No, you don't. You value the revenue. Plain and simple, you want my wallet.
I just don't understand this sales tactic in this day and age. What's funnier is their social media team telling me that they don't have any promotions at this time. Really? So what were those 4 offers on the phone?
You have to have more than just a billing arrangement with your customer. There is too much competition today. If you aren't engaging your customers, then you end up a commodity.
Think about the investment: SiriusXM had to negotiate with the car manufacturer to get its radio installed. It then has to give away 6 months of service to hook people (after an arduous turn on process). Then it chooses to annoy the prospect instead of engaging some discovery. "Hi, you just had 6 months of service with SiriusXM. What's your favorite station?" You could then suggest other channels before easing into the renewal. Why do it that way? Why do they want you to take a test drive? So you will picture owning it. You want the customer to re-live the ownership experience so you can separate him from his money.
]]>So with that said, DISH Network is set to do battle with ABC/Disney over ESPN. ESPN is the most expensive channel to carry for MSO's since the carrier is required to take all 7 ESPN channels now. Seven channels of bowling, NASCAR, Sportscenter, arm wrestling, and poker cost the carrier over $6 per subscriber. You ask why your cable bill is rising? There it is.
Every contract dispute means costs are increasing for content - and each dispute that ends favorably for the content, strengthens the content player. Add in another $5 per subscriber for over-the-air retransmission, which means that the carrier has to pay to carry the local TV stations that used to be free. It was free because most people with cable don't have an antenna too. The local stations were losing viewers and dollars. Now that reasoning has reversed - mainly just because it can.
Content is in a battle with DISH over its Hopper DVR and with Aereo. There is already a strategy in the works to mess with them - dual stream with embedded ads. It will be awesome .
The one thing that all of these idiots - content and carrier - forget is the Consumer. The guy paying all of your bills and making you all rich. You can't pay each star $750K per episode without the consumer, the viewer.
The viewer, who you treat like an after-thought and a pirate, isn't going to put up with your antics much longer. When you are paying out $150 for TV and you can't watch what you want, when you want, well, you will shift.
As less people work at an office (tele-workers), there is less water cooler talk about TV shows. As more people experience TV while on social media, less talk the next day about the show. This kind of limits the peer pressure to Must Watch TV. It undermines the power of TV.
It also means piracy. People get peeved when they are treated as pawns. We live in a society that more and more wants immediate gratification - give it to me now, the way I want to consume it. It's why we have DVRs and On-Demand. People will find a way to get what they want. That's really all piracy is.
Cord cutting is real. As the price increases or they get tired of a 3 week blackout of their favorite shows, people will cut cable TV - long before they cut cell service or Internet access. With the Internet you can watch Netflix, Hulu, and other content online. Over-the-air antenna does still work, too.
What happens to the current model if 15% of the population uses over-the-air antennae, Roku and smart TV's? I remember when DISH didn't have local TV. Google's Chromecast may be the answer that some viewers want.
A la carte channels are supported by Senator McCain (probably because he just wants the 3 channels he has had all his life). However, it will cost a lot more for channels than people think, since most channels are subsidizes by the popular ones in the package.
"What programmers are basically saying is that demand for these niche channels is so meager, they need to be underwritten by people who watch more popular fare."
Content providers like CBS and Disney are stuck in an old model, one that pre-dates the Internet, which is disrupting everything. "Dish Network Chairman Charlie Ergen said a new ad-skipping feature that has infuriated major broadcast TV networks is a "competitively necessary" response to the explosion of cheap Internet video. That Web video threatens the pay-TV ecosystem, he added, and it is partly caused by the TV networks themselves," reports Benton.
"Ergen aims to force the networks to develop "more meaningful" ads, using, for example, demographic targeting of viewers. "Ultimately, broadcasters and advertisers have to change the way they do business or they run the risk of linear TV becoming obsolete," he said. [Benton]
As DISH confronts ESPN, people should take a look at Google Fiber's package - no ESPN. How many viewers really watch sports - and which sports? Personally, I only have cable TV to watch volleyball (college and pro), NFL, college basketball (Go UCONN Huskies!) and some tennis. I can get everything else online. (It is cheaper to pay $1.99 per episode for Newsroom on Amazon than to pay for HBO each month. And I can consumer it as I want - binge or not.
There is certainly a financial model that has to be recognized and realigned for the content companies, but they better start trying stuff fast - while they still have time to fail.
As I see it, cord cutting will escalate as soon as it gets simple enough to do so. If your neighbor cuts the cord and can set it up for you for under $200, BAM!! It's all over but the crying.
A lot of industries - newspapers, bookstores, music, movies - did not adjust to the Internet-Smartphone Age before it ran them down. Will TV be next?
]]>DISH merging with Sprint would be interesting. I mean, who wouldn't want Blockbuster stores to also sell satellite gear AND cell phones? It would look like a mini-Best Buy.
As TechCrunch explains, "That pre-existing deal came with a lot of visible support from both Softbank's and Sprint's top management, and came also with financial help worked in for the continued build-out of Sprint's network."
Would DISH be able to help Sprint build out a network? Now it would be 3 sets of spectrum - DISH, Clearwire, Sprint. It would be wholesale and retail. It would be Satellite TV and cellphones and videos. Did Charlie ever (successfully) do anything with Blockbuster? DISH announced that it sold the British arm of Blockbuster video last month.
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Comcast buying NBCU was a little different, but cablecos have owned channels before, especially sports channels (MSG, YES, BayNews9).
Maybe the TV-cord-cutting crowd is scaring the cablecos, despite the rhetoric to The Street. Content is expensive to license and to deliver. And getting more expensive all the time. Meanwhile more video is being delivered as bits and bytes by Netflix, Amazon, the networks (USA, Comedy Central, ABC, CBS and CW - all have shows that can only be seen on-demand from thier website) and apps (HBO-on-the-Go and TWC Anywhere, for example). This means that TV revenues WILL decline.
How does the Duopoly make up the money and pay off the $250 Billion in debt it has accumulated????
Metering is one way. It increases the ARPU.
BTW, I find it interesting how the RBOC's have basically given up on DSL.
So VZ is now partnering with the Coinstar subsidiary, Redbox, to launch a video streaming service to compete with Netflix, Amazon, and Hulu.
This means that ATT will HAVE to go after DISH. Why? The wireless spectrum primarily but also DISH owns Blockbuster, satellive TV service, and Slingbox. Telco is a me-too industry. Unless ATT is going to abandon theh consumer space, relinquish it to the cablecos, it will have to make a move soon.
While Echostar owns Hughes Communications, the DISH company bought up spectrum from DBSD and Terrestar that DISH plans on utilizing to offer a hybrid satellite/terrestrial mobile broadband service. Today, DISH has a market cap of almost $13B, while Netflix is at $7B. Since spectrum is finite and like real estate, the extra $6B seems like a steal. Consider that AT&T bought spectrum from Qualcomm for $2B. That spectrum, which, according to Huffington, "Qualcomm stands to make a handsome profit on the spectrum. It paid $38 million for one slice of nationwide spectrum - the former UHF channel 55 - in 2002, then another $558 million in 2008 for UHF channel 56 over New York, Los Angeles, Boston, Philadelphia, and San Francisco." Qualcomm was using that spectrum for FLO TV, which failed. It consists of six D-block and five E-block licenses in the Lower 700 MHz band, giving AT&T post-transaction holding between 6 and 80 megahertz of spectrum below 1 GHz. Holding is key, because, like all cellcos whining about spectrum, AT&T HAS spectrum it has not deployed.
AT&T says it needs the spectrum, especially if VZW gets the SpectrumCo deal to go through whereby VZW buys all the AWS spectrum from the cablecos. So do the Rural Cellular Carriers. Makes DISH a big target for acquisition. However, Charlie Ergan still owns 51%.
]]>"Former T-Mobile CMO Denny Post says carriers should focus on retention, rather than relentless promotions aimed at new sign-ups." Post says that it is the end of the New-to-Wireless Customer Era and that cellcos must re-think customer care.
Post continues, "It is going to become an absolute competitive scrap battle, [because] any customer is going to have to come from somewhere else."
This isn't just the cellular market. Look at broadband, landlines, cable TV, voice - all flat.
While VoIP revenues are increasing, it is because TDM revenue is decreasing. Hosted UC or Hosted PBX sales are more than voice sales, but functionality, productivity, efficiency, collaboration and one-inbox. (At least, in my humble opinion).
And while the FCC has a $4B fund to get more broadband deployed, those sales will go to the first network operator that provides it IF the price is right. Although even in rural, it is a battle between satellite, local wi-fi, dial-up, and 3G/4G data cards - which isn't exactly a slam dunk customer acquisition market. Everywhere else, it is The nice thing is that Channel churn numbers are better than direct sales. Now if the Channel could just cross-sell and upsell better....
So Charter has purchased the "cable television systems from US Cable of Coastal Texas, LP serving, in aggregate, approximately 16,000 customers in Missouri, including the communities of Hannibal, Moberly and Mexico," according to The Mexico Ledger.
TDS parent, Telephone and Data Systems, Inc. announced it will acquire OneNeck IT Services for $95 million. OneNeck, generated revenues of $37 million in 2010, will be a subsidiary of TDS Hosted & Managed Services, LLC (TDS HMS). OneNeck is a hosted application management and managed IT hosting services provider, specializing in ERP apps.
Meanwhile, DISH scoops up TerreStar Networks operations and spectrum for about $1.4B out of bankruptcy court. According to Rodrego Byerly, an M&A advisor, "The DISH deal structure accepted by Terrestar was unannounced. The balance sheet for DISH shows $2.9B in cash and marketable assets. There weren't any other bidders, so the DISH bid had to be accepted. Terrestar had approximately $1B in debt. The deal sheet doesn't have to require cash; there are other scenarios: i) Debt assumption or re-fi, which would put TerreStar's debt on DISH's balance sheet with minimal cash outlay (while also allowing creditros to exit); or ii) there could be a soon-to-be-announced capital raising event (like a PIPE or secondary offer); or iii) the deal could be written to satisfy creditors with some mix of cash andstock as the debt could be converted to DISH stock through some mechanism. Not enough details to say right now."
DISH recently purchased Hughes ($1.33B) and Blockbuster ($320M), including the stores. Some have thought that it was a smart way to enter the retail space for DISH and its various products (like Slingbox, Hughes broadband, DISH DBS TV). Byerly notes, "DISH is somewhat quietly building a broader distribution pipeline. When combined with its now more robust content and delivery channels, it's quite impressive."
TerraStar gives DISH 20 MHz of S spectrum adjacent to 20 MHz of spectrum that DISH is acquiring with its purchase of DBSD also from bankruptcy for about $1.4B. That's a nice block of spectrum - 20 × 20 - at the cost of $2.8B - is about auction value. "Both failed companies have spectrum with ATC rights, which allow them to run hybrid satellite/terrestrial IP services in satellite frequencies," according to Rethink Wireless. Other interesting pieces from that article are that this is Charlie playing chess and that Craig McCaw is in the picture.
[Please note some of this is DISH and some of this is Echostar, both controlled by Charles Engen. EchoStar is TerreStar's largest creditor.]
And then the Denver Post gets funny with an article saying DISH could now buy Sprint.
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Of course. Why shouldn't another bunch of billion dollar companies ask the federal government for money. From the Benton Foundation: "A group of satellite broadband providers -- Dish Network, EchoStar Technologies, ViaSat/Wildblue Communications and Hughes Network Systems -- told the Federal Communications Commission that they should be allowed to participate in the Connect America Fund."This is the second asset purchase for DISH as they bought DBSD North America, Inc., a hybrid satellite and terrestrial communications company, for approximately $1 billion in February.
Looks likeDISH's parent company, ECHOSTAR, purchased Hughes Communications (NASDAQ: HUGH) for about $2 billion. So they may have a retail outlet for Hughes satellite "broadband".
DISH Network, Cellular South and the Rural Cellular Association (RCA) are asking the FCC to block AT&T's $1.9 billion purchase of Qualcomm's Flo TV spectrum, according to news reports.
Meanwhile today the FCC is having an open meeting on Inter-Carrier Compensation.
]]>Why AT&T will not be buying Echostar: Echostar has been on a tear buying up bankrupt assets of BDSD and Terrestar; then Move Networks; and now Hughes. It's too big to merge with Ma Bell. And Ma can't afford to wait over a year for that merger to be approved. Much better to strengthen the partnership to market cell/satellite bundles.
Minnesota postponed granting access to CenturyLink/Qwest merger.
National Broadband Map comes out tomorrow (2/17/2011)
Masergy, a network reseller specializing in MPLS, filed its IPO.
early Bird Special! ITEXPO Austin for just $99!
]]>There are latency issues with the service (due to the physical distance the packets have to travel to the satellite and back to Earth), as well as bandwidth constriction and bandwidth caps.
Echostar-9 is being used by StarBand for service; Echostar was an investor in StarBand. Echostar provides satellite service to DISH Network, which spun off from Echostar in 2008. Echostar operates 14 satellites, with DBS licensing from the FCC.
WildBlue runs on Telesat Anik F2 satellite and was acquired by ViaSat in 2009.
Along comes Lightsquared, an upstart bankrolled by Harbinger Capital Partners, which announced it is building a new nationwide LTE network dubbed "Lightsquared" using spectrum owned SkyTerra. "Harbinger acquired SkyTerra and took it private in March, with plans to use the satellites, coupled with 36,000 earth-bound stations across the U.S. to set up a next-generation wireless network covering the entire U.S. population," according to the Washington Business Journal. Where did this spectrum come from? Well, SkyTerra used to have rights to spectrum for satellite telephony. Then it received permission from the Bush FCC to use that same spectrum for cellular telephony. Hence, the launch of LightSquared as the next 4G-LTE nationwide whoilesale cellco, which launched its first satellite to orbit this week. [Details are here].
Remember that Clearwire has 100 MHz of spectrum nationwide and has burned through close to $5B already. Plus let's not forget that VZW and ATT spend $7B and $5B respectively on CAPEX annually on their network. It isn't clear if Clearwire will survive. So what makes Harbinger think he can build out a 4G-LTE network from scratch? It costs about $400M to launch a satellite into orbit. That's not groound stations or anything. That's one single satellite. (The second one goes up in 2012 for another $400M approximately).
Apparently, investors also forget that T-Mobile is sitting on AWS and 700 MHz spectrum and is an also-ran at 4th place with 33M subs. 33M and it is in 4th place and struggling. Speaking of struggling, Sprint owned much of the spectrum that Clearwire has and still couldn't roll out the 4G network amid its own corporate psychosis. So what's a bunch of upstarts with less than 2M subs to do?
On that note let's not forget about Google's dream for the Third World called O3b.
O3b plans to launch medium earth orbit satellite service for the "other 3 billion" people who do not have broadband."O3b is financially backed by SES World Skies, Google, HSBC Principal Investments, Liberty Global, Allen and Company and Northbridge Venture Partners. By mid 2012 O3b plans to launch a constellation of 8 satellites into orbit to provide low latency Internet services to billions of users in remote areas of the world," according to Wikipedia.
Finally, we have HughesNet launching a high capacity satellite that will make consumers re-think about satellite broadband. According to a press release, "Hughes Network Systems, LLC successfully demonstrated 16 Mbps of TCP throughput and over 20 Mbps of UDP streaming throughput to a single HN9400 Ka-/Ku-band broadband satellite terminal. This allowed the terminal to support Web browsing, streaming video, voice, and video conferencing applications simultaneously. The demonstrations were conducted in Australia using broadband satellite capacity provided by IPSTAR and SES World Skies." Supposedly, this is a game changer. DSL Reports thinks it's just smoke. People forget that they are real, physical limits on spectrum and bandwidth. X amount of spectrum in the Ka or Ku range can only deliver a finite amount of bandwidth through the satellite - no matter the compression algorithm - there is a finite amount of bandwidth available. Plus that satellite feeds all subscribers at once. There are computing limits on that on top of the latency and weather issues.
Where Hughes is making a change is in the launch of its M2M service that will likely look for some revenue streams in the Smart Grid sector.
And think about this: all that spectrum being used - including TV and radio signals - at one time was public domain, sold away to private corporations for one time payments. If we really wanted to pull ourselves out of national debt, that spectrum would be taxed or in a revenue share model.
Also, by the new FCC definition of broadband (4MB x 1MB) most of the satellite and other wireless high-speed Internet Access is not broadband. Oops!
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