Recently in telco Category

On a listserv today, I replied to a wholesale account exec at a reseller that had just plugged his service to the list. In the reply, I said "that's one way to pimp your product" then went on to explain that he missed the point of the original email -- and in fact doesn't quite get the goal of the membership of that list/group.

Well, the AE got offended and pinged me offlist. I always say "pimping your stuff". Let's face it: in telecom most everyone is pitching and selling and pushing a commodity. Not much original stuff (except maybe fiber guys). Telecom people especially at Reseller CLEC's and IXC's are just pimping it out. Charging a little less than the company they buy from; adding a middle man; but what value? It's a straight price sale. (A rant on resellers coming in another post).

In many cases (not this one), the AE's move around so much that their business contact information should come with an expiration date. (You go to conferences to get the new business cards and find out where so-and-so is working now. What do they do with all that company logo-ed clothing?)

Do you think this industry is pimping it out? For the most part, I do. Exceptions in a later post. 

The New York Times has an article explaining "traffic pumping" here. This practice largely centers around Iowa Independent phone companies who are partnering with phone service companies like chat lines and free conferencing companies. AT&T has been complaining to the FCC about it for a while Many of these companies are in litigation to get paid by the IXC's.  What it really comes down to is that the "new" FCC has to take a stand on Inter-Carrier Compensation soon. It has been "studying" the issue for years. It's a political hot potato. Bill-and-keep is the system most pundits see as the quick fix. I'm sure its deeper than that.

UPDATE: NPR has a couple of articles about Google Voice and Traffic Pumping. One here about the 100 numbers that GV is blocking and the other here about the blocking.  BTW, GV has over 1M users now.

I moderated a panel on Telecom Billing Issues at Channel Partners this week. It was a full room. Apparently, one or two people thought it was too hard on the carriers (or I was too hard on a carrier). 

If you have been in telecom for more than a year (and have any voice customers) then you know that there are billing issues. Heck, even on simple IP or transport bills there are errors and surprises. And by surprises I mean line items that aren't obvious.

One carrier in the audience to offense to some of the panel discussion, but what it boils down to is that they don't charge what it costs to deliver a minute of service. The numerous extra line items (other than legitimate federal, state, county and city taxes and USF fees) are just ways to make a profit - but confusing the customer. As I said on the panel, if it actually costs 4 cents to deliver a call, why not just charge 4 cents instead of quoting 1 cent then adding $80 in additional charges? 

Airlines are the only ones nickel and diming the consumer.

The WSJ has an article titled, "AT&T, Verizon Still Pouring Billions Into Mobile Networks". It notes that cellcos have already spent billions upgrading their networks to 2.5G and 3G -- and now will spend billions more on 4G.

In addition, both companies are also dumping billions into International routes, domestic broadband networks, and their respective triple play networks, U-Verse and FiOS. 

On top of that, both companies have been acquiring companies, like Alltel and Centennial. Ummm, how are they not toppled over in debt? 

These companies have felt intense pricing pressure from cable companies as well as T-Mobile and Sprint. Customer Acquisition and Retention costs have to be high, even as ARPU remains about the same. Debt costs more right now. Wireline income has been declining for at least 4 years.

Where's the money coming from?

As stated previously, as telcos spend billions to deliver TelcoTV to the masses, the masses decided they don't want it.

The cellular companies want to deliver some kind of TV content exclusively to their uses. This makes no sense because these guys bitch a storm when you actually use your EVDO/High speed Internet card, but streaming video to my handset is fine? Schizophrenic much?

Also, these same companies - ATT and VZW - are building out telco TV networks and 4G networks. Can you say redundant billions?

Why they didn't just stick with the satellite TV partnership instead of their current play is beyond me. On top of all this fiber and VDSL deployment, there are head-ends, set-top boxes, ONT's, and disappointed customers everywhere. Plus they have to fight with cable for access rights to sports networks. Oh, and DirecTV and DISH have sweet DVR software. Others not so much.

But does it matter? No. Because people are moving to the Internet as their home entertainment network. Hulu, NetFlix, DirecTV, Joost, and so much more.

So it becomes a fight to be the best dumb pipe to the home - at an ever increasing customer acquisition cost due to a flat market that requires taking customers from each other. 

Here's the latest Report: TV Networks Should Be Afraid -- Very Afraid -- of Hulu. Even the TV Networks are in trouble. They will need exclusive content to keep viewers, because Content is still King.

I've been trying to order Dry Fiber out of the AT&T Southeast FCC Tariff # 1 for over a month.

The Service Inquiry used to be manual paper - now it is a system called NSS. No idea how to access that system. 

I tried to order it through the Channel. It is not on the commission schedule so my Channel Manager wrote me, "We need to concentrate on products we get paid for, dry fiber is not one of those products."  So nevermind helping the customer.  Or sell product and bring in some revenue. Or that the customer has a huge spend with AT&T already. (Or that I just need an SI done - nothing more).

Product Management indicated that AT&T is no longer offering the Dry Fiber product. "The product was removed once the merger between AT&T & Bellsouth took place." But that is erroneous as the following filings will prove.

BellSouth filed to discontinue Dry Fiber service in July 2007 (see letter PDF here). Then AT&T filed with the FCC to withdraw its Section 63.71 application seeking to discontinue its provision of Dry Fiber service in Jan. 2008 (see letter PDF here). It currently is written into the FCC Tariff # 1 as 4-strand fiber transport (see PDF Tariff here).

Next it's over to the CLEC side of the house where the Wholesale account rep says that she only handles UNE. The other Wholesale rep handles FCC tariff items, but not a word out of her yet. 

My big problem is that this service is listed in the tariff. It shouldn't be that hard to order service. 

Next step for the client is a phone call. Either to call a telecom attorney (either Kris Twomey or Jonathan Marashlian); or to call the FCC Wireline Competition Bureau (202) 418-1500.

I look at the new IP Phones and wonder: Are they morphing into a cell phone?

I like cordless handsets, mainly because I walk when I am talking. It helps me think and it sounds better for the caller. And I use a corded headset.

So when I look at the newest DECT phones like Aastra 600D series, Cisco WIP310, and others, they are so small, lightweight and are starting to resemble a cell phone. Right? A perfect example is the UniData Wi-Fi phones. These look just like a cell handset and come with video capabilities and cameras. No other handset has that yet.

Broadsoft extended Web 2.0 services to the mobile device. So has Mitel. Blackberry wants to mobilize your PBX - to make your cell phone an extension on the office PBX system. So does Mitel. So does Broadsoft. Oh, and so do the cell carriers because they want you to spend those minutes.

It looks like only difference between your IP phone and your cell phone will be signaling technology (Wi-Fi, CDMA, GSM, DECT). When we get a phone with half those chips in there, will the desktop phone become obsolete? Are we really that mobile? I sit at my desk at least 40 hours per week when I am in town. I can't see getting rid of my cell phone even with those home phone systems that jack into your cell phone. For me the call quality on the cell is inferior to either my VoIP line (most times) and my POTS line.

I think that battery life will always save the desktop phone. I wish it could do more: like updates and texts or IM or something. After all the desktop IP phone by Polycom or Aastra (the ones I am familiar with) are mini-computers. Broadsoft and Aastra have XML marketplaces for apps for them, but I have not heard (or seen) anyone taking advantage yet. (Anyone?)

As more minutes move away from the PSTN to VoIP Networks and Cellular systems, what happens to the PSTN? Where's the Tipping Point when the telcos can't or won't maintain it anymore?

There was a question on LinkedIn today about the MVNO model making a comeback. It seems that Sprint buying Virgin Mobile has sparked a slow news day. 

Let's not forget that SK Telecom dropped almost $300M on the Earthlink MVNO formerly known as Helio, which was given to Virgin Mobile last year. SKT was looking for a foot hold in the US market (just like every other international player). If SKT decided to sell its one stake, what chance does the MVNO model have?

As more minutes move to the cellular networks from the wireline network, how does that scale or make financial sense for a virtual operator? (Many analysts note that it hardly makes financial sense for the network operators).

I'm thinking that Sprint bought it to prop up some pre-paid revenue (short term). Or that Sprint needs to just embrace pre-paid altogether in which case they need to go buy some more players including Yak.

Doug Mohney tweeted this morning that Verizon has a 7-day repair window which may be why they are losing landlines. I would suggest that the RBOC have been lobbying since 282 Relief for Forbearance relief as well - at both the state and federal level. For the most part they have won. 

Gone is the regulation for most telecom services in most states, which means the state PUC cannot deem that POTS lines be fixed in 24 hours (the old standard), especially when Digital Voice (VOIP) is dependent on broadband that does not have an SLA or mean-time-to-repair.

After VZ's 6-city forbearance petition was struck down in 2007, VZ legal took it to the court system and won a review by the FCC.

By letting landlines go, the majority of the existing POTS type service will go to cable or other providers, which would almost insure that VZ would get forbearance on a new review. Slick and devious.

Everyone has some plan to spend money for broadband now that the BTOP is out there.  Much of the broadband problem revolves around lack of fiber. There's no conduit and no fiber, so what do you do?

This one blog post explains the conduit and fiber access dilemma and how if it is not addresses will create problems down the road. 

Then you have a couple of Congresspeople pushing a bill to build conduit into any highway expenditures. Except the Highway Trust Fund is broke.

Maybe we need to stop looking at the federal government for broadband deployment and start looking at the business plan for after you sink all those assets in the ground. Need we forget that there is plenty of fiber in the ground from companies that have long been forgotten that lies unused (because no one knows where it is, where it goes or who owns it). 

At the end of the day, there needs to be a business plan that allows for sustainable broadband. Paying for the network usage and maintanence.

The USF contribution is now 12.9%!! WTH?  That is too much. And that doesn't include the companies that will take loans or grants under BTOP and go under (never to pay it back or deliver service). What will USF look like in 2 years?

Meanwhile, you have the NTCA saying that Google and content providers should pay into USF. Excuse me? They do pay into USF on transport billing. 

What do they think people want the broadband for? Email? Bell-heads need to figure out what happens when the system they love crashes. What happens when the Universal Service Fund collapses upon itself? Most ILEC's, including VZ and ATT, get millions from the fund.  Millions of my fee dollars go back to prop up an unsustainable system.