Recently in telecommunications Category

Stacey at GigaOm writes about the data problem for cellular companies. On the one hand, data revenue of $40 to $60 more per month from an account seems pretty good; on the other hand, 70% of the traffic on a tower is from data cards (about 3-4% of subscribers). This seems like they should have known this.

Voice calls take up less than 10K per stream. 3G data takes up to 3MB. AT&T sees how much bandwidth an iPhone pulls off its network (read: a lot!). So are they just getting us addicted to a flat rate service and smartphone access only to charge us per byte later? It would seem so.

Once again they designed a voice network instead of a data network. (Remember the busy signals on dial-up?) And misjudged how people would use it.

With the workforce becoming more mobile and virtual each quarter, cellular data will increase. As households drop landlines, cellular usage will climb. I hope they have a plan for this.

Like terrestrial broadband not having a good enough business model for the network operators, it looks like cellular broadband will have to be re-tooled -- now that folks are addicted to 24/7 unlimited access.

In a short article in INC magazine, one entrepreneur explains how he uses Google Voice for his startup business. He is a straddler - he has a full-time job while launching his own business. 

As noted by Ring Central, many of the features in Google Voice have been available for a while from VoIP Providers. However, it's partially the brand (it's Google) and partially the price (um, free). Once Google allows number portability, it will be tough to beat. Why?

For one thing, Raving Fans. Google has a lot of Raving Fans. And those fans tell stories about the service - even better than a testimonial. Who is your storyteller?

For another, easy explanations about what each feature is on the product page, the help pages, and on fan pages. Could your Grandmother understand what youare offering?

Another would be the brand. Most VoIP Providers don't do much marketing, even less branding. The only exception is Vonage. The other might be 8x8. Do the businesses in your local Chamber of Commerce recognize your company name (or product name)?

What are you doing to counter these factors?

As per the press release, you would think that the last bunch of transactions had just crippled the accounting firm.

As previously announced in its Form 8-K filings with the SEC, the Company has been delayed in filing financial reports pending completion of its 2008 audit. The Company's change in independent registered public accountants and the complexity of the technical accounting treatment required with respect to the embedded derivatives resulting from the sophisticated financial instruments used in several of the Company's financing transactions were factors in the delay, which has resulted in the suspension of trading from the OTC Bulletin Board. Completion of the audit and filing of financials with the SEC is expected during July, at which point the Company plans to apply for reinstatement of trading of its common stock on the OTC Bulletin Board.

But a document mailed to me today states that Global Capacity, Inc. is experiencing "an unplanned cash constriction". Nice phrase. What does that mean? No commission payments since January.

Global Capacity Inc purchased 4 companies in 33 months. The acquisition of Vanco Direct in 2008 was the pincher due to $6M in accounbts payables. Revenue doesn't mean diddley. Cash flow is king, folks.  I hope GCG's plan works because I like getting paid my commissions on circuits sold.

In a recent conversation with a buddy of mine at a state PUC, we were discussing small rural ILEC's. Many are cash strapped which makes providing advanced services difficult - no cash to buy a head-end (half a million or more). 

RLEC's can get RUS loans for the upgrade to fiber, but OPEX and labor for installation are not covered by the loan. That creates a quandry.

Why are the RLEC's cash strapped? They get all that Universal Service funding (both state and federal). But they are losing the best clients to cellular and satellite (and in some cases cable).

I have a couple of clients that are small MSO's who are in a similar situation. They are losing customers to DirecTV.  It costs big money to replace an MSO (cable) system in the ground. (Verizon started at $2000 per home passed and supposedly has it down to under $900 per home passed). There are other costs besides the fiber, optics, conduit and labor - the head-end, the softswitch for Voice, and the set-top boxes. The set-top boxes used to cost $400 each but supposedly are dropping towards sub-$200. But at $5 per month rental fee, even the $200 can't be capitalized. 

With Verizon dumping its unprofitable landline regions onto companies that have no hope of deploying broadband to their regions, the question becomes what are we to do about American Broadband Deployment in Rural America?

At some point, if you want really fast broadband, you will have to move to an area with it.  However, with our current housing situation, how will you do that? If you live in an area without broadband, your economic options are slim. Communities with fiber add more jobs, have higher income, a broader tax base - than communities without fiber. 

My friend says that maybe Broadband isn't a right for everyone. It's just too expensive. Even the $7.2B BTOP funding is a drop in the bucket when you spread it out to 50 states. Can we bridge that Digital Divide?

We talked about how the FCC policy has not helped to further broadband deployment in the US in the last 8 years. Revenues at the RBOC's go up, but we haven't done anything about the Tipping Point of the PSTN. At what point does the PSTN become endangered because too many ILEC's can afford to keep it working? Or the disparate VoIP Providers and Cable Companies can't deliver dependable E-911 or inter-connect efficiently. (Inter-Carrier Compensation Reform anyone?)

The new FCC as well as the RUS and NTIA are managing a lot of funds. USF contribution factor is now 12.9%, but the contributions are dropping as landlines decline. So the thing they need to look at is Going forward what do we do to preserve E-911 service in America as well as spread the availability of true Broadband for economic diversity.
 

Tech Data's Senior Product Sales Champion for UC was at the event last night. I spent a few minutes chatting with him about his position, but couldn't really get a definition of UC out of him. Polycom and tele-presence are what he pushes - to me that's not really UC. HD Voice? No we leave that up to Polycom and the vendors. Seems even a tech company has a problem wrapping the head around Unified Communications. (UC doesn't mean the latest gadgets).

XO has some components to build a UC bundle - overlay IVR, Broadsoft SIP Trunking, some straight forward Hosted PBX (with a limited feature set), and Hosted Exchange for the email integration piece.

If the UC Champion thinks UC is tele-presence and video conferencing, what does that say about well defined the term is in the Industry?

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.

This will be a strange post but Alex Balashov and I had a Twitter exchange today about the telecom industry and its relentless pursuit of arbitrage plays. From long distance to calling card to SIP trunking, it's all about changing the bucket of minutes for something cheaper so someone can make some short change coin. Kind of ridiculous.

I asked where the Purple Cows are. Where's the HD Voice in my Hosted PBX? Where's the mobile component that is stupid easy? 

Alex doesn't like Hosted PBX. "As for Broadsoft, it's an overpriced waste of time. Not because it sucks- it is a very feature complete multitenant engine...its cost simply doesn't scale to what people are willing to pay for hosted PBX and dial tone. Shot up by commoditization." 

I think that there are two camps: one that thinks Voice should be free - and I hear that more from folks IN telecom than from buyers. And these folks simply do not grasp the stranglehold that the ILEC's have on the PSTN, which for years to come will still be the network of the final mile to end user. Yes, cellular is large and cable voice is growing, but most of that traffic still resides on the ILEC operated PSTN. ENUM and Voice Peering domestically in the US has not  reached a level that will cripple the PSTN yet, luckily. (What will we do when that happens?)

The other camp will gladly pay to reliably and clearly communicate with family, friends and customers. 

Maybe I am in the minority but I can't hear folks well on Skype, Magic Jack or cell phones. I for one would like less computer features on my "smartphone" and better clarity, volume controls, and speaker. But that's just me.

Alex does make a good point that all ITSP's need to pay attention to: "No process, no standardisation, no infrastructure = no chance of making money, on something that is a red sea to begin with."  What's a Red Sea? A bloody marketplace built on price, not value. "Develop business processes that can be replicated at decreasing marginal cost, standardize." That at least helps when you live in a Red Ocean.

The Starbucks of Telecom. Who is it? Alex suggests that it is "Ifbyphone, Callfire, and various niche call center and dialer vendors (far from all)." And certainly these companies offer a value add on in a niche way. However, who is providing the dial-tone while delivering a communications experience? (I don't know). I have a laundry list of stuff I want from my Hosted PBX vendor:

• HD Voice
• Easy access on smartphone
• Easy transfer to/from mobile/desktop
• Presence
• Video capability
• IM/Chat
• Email-Voicemail Integrated mailbox
• Voicemail text 
• UM (unified messaging)
• User portal
• Click to call

Alex thinks that the Duopoly is getting better at delivering smaller transactions. I think that they still suck at it and it is costing them a fortune in acquisition cost. Then a fortune more in brand deterioration when people get frustrated with the experience. (Part of is it the B.S. marketing that they have been doing for years that raises the level of expectations to beyond the network to deliver. Can you say More Bars or No Dropped Calls or Best Network?)

Very few Purple Cows in our Industry. And if you think you are one, I suggest you talk to your customers. Why? Because while you may think you deliver a great service, your competitors are taking your customers.

Alex and I did agree that the way SIP Trunking is sold is yet another arbitrage play. "So, I think we agree - trunking in itself is a very mathematically exacting but mostly pointless waste of time.  As far as who captures the value in the non-enterprise VoIP space, you're absolutely right - the very few value-add vendors." 

It's food for thought from twitter.

Alex talks further about TDM - that it is still the winner in reliability, inter-operability, and call quality. 

"From a cost perspective that is a hard OPEX formula to meet. TDM is still the only reliable means of PSTN access. Stuff just doesn't work well. Eventually the smart ones widen up and get cheap TDM circuits, and ISDN gateway boxes. ... 90% of their technical overhead drops off, churn slows, but the margins take a dive unless they got a really good deal. "good deal" usually means meeting an IXC in a hotel and not paying loop on the circuit, just blended usage."

This leads me to wonder what ever happened to Voice Peering and ENUM? Well, one thing is that everyone wanted to start one. There wasn't just one. The rules and connection costs get in the way. Why didn't COMPTEL force its membership into a Voice Peering arrangement in 2005? Add in the Cable Industry, VoIP players, and Sprint's network of cellular minutes and you take a lot of the minutes out of the ILEC's PSTN. Costs drop. Or would they? Seems that the CLEC's would still want Inter-Carrier Compensation since some have this built into their financial model (as it were). Because Bell-heads (traditional telecom execs) don't think the same way that Net-Heads (IP execs) think. The settlement model would have to be forced on them. Even the FCC has balked at that for 10 years. 

Alex doesn't get my Peering point so let me spell it out further. Take Sprint as the manager of the Voice Peering Points in Dallas, NYC, LAX, CHI and maybe VA. CLEC's, cablecos, ITSP's could drop traffic either as TDM or IP on the switch and not pay for termination. A flat rate if you will. But Alex is correct that the settlement issues just won't float. Too many Bell-heads left in charge. 

To mean VoIP was able to take off for 3 reasons: broadband deployment, expensive TDM, and cellular acceptance of crappy call quality. We haven't come much further than that.

CNN's Money's Customer Service Hall of Shame includes mainly banks and surprise telecommunications companies. These are the top 10: AOL, Comcast, TWC, Sprint, Cap1, HSBC, Abercrombie, Qwest, BOA, Citigroup.

I have a problem with a dangling phone number - my home phone. It's the number that my parents, in-laws, friends, doctors, bank, etc. has - plus all those tele-marketers. My wife and I each have a cell phone, so what do we do with that home phone number?

RCF (remote call forwarding) from Verizon is about $40. A home phone line with fees is $58 with Bright House cable and $63 (+LD) with Verizon. I want to port it to a Google Voice kind of system. (Only Google doesn't port numbers - yet). 

GotVmail (now Grasshopper) used to have something like it. I guess if I don't plug in an ATA, I would still get the web portal and call forwarding features from any ITSP.  

This came in from Peter Shankman's HARO:

So you have a phone number you love. But you can't move it when you move, can't hang onto it if you want to change a cell phone, blah, blah, blah. Thanks to HARO Family Member Number Garage, you can!  NumberGarage.com services were created to solve a unique telephony problem: local number portability. Small businesses pay a ton for a Remote Call Forward (RCF), and NumberGarage has an affordable solution compared to those fees charged by traditional landline operators. Some people are actually foregoing their landline and adopting their cell phone as their primary telephone. NumberGarage
helps those who are "cutting the line" as a way to transition to one phone by having all calls to their old telephone number forwarded to their cell phone. NumberGarage makes it possible to capture ALL callers for a fraction of the cost. Landline operators won't forward your home line to your cell line without costly service charges. NumberGarage gives you an easy and economical
solution. Check them out! http://numbergarage.com - On Twitter at
@numbergarage

I have to wonder why more ITSP's don't see the need for RCF-like options, more Voicemail box options, Virtual-NXX numbers (so I have local numbers everywhere), and other Google Voice kind of features. 

From an FCC Filing by Birch:

On May 11, 2009, Birch Communications, Inc. (f/k/a Access Integrated Networks, Inc.), Birch Telecom, Inc. (BTI), and BTI's certificated subsidiaries, and Cleartel Communications, Inc. and its subsidiaries, Cleartel Telecommunications, Inc., IDS Telcom Corp., nii communications, ltd., Now Communications, Inc., Supra Telecommunications and Information Systems, Inc., and Telecon Communications Corporation, filed an application pursuant to section 63.03 of the Commission's rules seeking approval to complete a proposed transaction whereby Assignees will acquire substantially all of the customers, customer accounts, and telecommunications assets of Assignors.

The interesting part is this statement: "BTI is a Delaware corporation, and together with its subsidiaries, is wholly-owned by BCI, a Georgia corporation. .. The following U.S. citizens hold a 10 percent or greater direct interest in BCI: Holcombe Green (66 percent) and and R. Kirby Godsey (32 percent)." Two people collectively own pretty much half of all the UNE-P CLEC's in the Southeast.