Tuesday, March 28, 2006

Cable TV Franchising

In the uphill battle to get Congress to address the Net Neutrality issue, Congress has instead introduced bills to ease at&t and VZ into video, because, by golly, there are only 3 choices for TV - cable, DTV and DISH - and people need to watch more TV. BTW, three is one more choice than we have for Broadband. And which is more important? Does a community get economic advantages from TV? No. But entrepeneurs do. And that translates into tax dollars and a spur to the economy. Small business is the driving force to Innovation, JOBS, and the Economy. About 80% of all job growth comes from small business. Not from Merging Monopolies who are laying off folks in the thousands (about 45,000 over the last 3 years actually). One more rant: Congresspeople: We already have the dumbest and fattest people on the planet, do they really need more must see TV like reality shows and poker? But then if the populace was smart, you wouldn't get re-elected; nor could you line your pocket with special interest cash; and we would have a thriving competitive landscape.

Net Neutrality Update

DSL Reports tells us that the Congressional telecom bills have been watered down to just TV. Even the Barton bill, which originally contained Net Neutrality language, has been changed to say "Let the FCC Decide." This is the same as saying WHATEVER! The FCC's own Harry Potter has been waiving his magic wand around so much for the Tele-Barons that I'm surprised it has any juice left. Maybe that juice is being provided by the "Telecom & technology firms [who] spent $152 million in the first half of 2005 alone to lobby Congress as they were preparing the rewrite....The biggest communications spender for all of 2005 was the USTA [surprise], whose members include the former regional Bell operating companies." Now that BT has told its bandwidth hogs to pay more or get off their network, it seems that a tiered internet (or a metered internet) is almost upon us. Even Qwest CEO Dick Notebaert says that a Tiered Internet is Reality; and he is so irrelevent he has to echo the big guys in hopes VZ will buy his debt-riddled @ss and give him a big golden parachute. Love telecom. Just love it lately.

Merger Mania

Business 2.0's Om Malik writes on CNN Money: "The proposed $34 billion merger of two telecom hardware makers, Alcatel and Lucent Technologies, is like the firing of the starting gun for an industrywide race to consolidate. Whoever crosses the finish line first will have the upper hand in a vastly transformed telecom landscape. A vast number of smaller equipment makers will be swallowed up. And we might even see more megadeals, like Cisco buying Motorola." Wow! We will be exporting middle managers soon to the world, since all these mergers and down-sizings are giving us an excess supply. And we need to import some jobs as well.

Friday, March 24, 2006

Selling VoIP through MLM

This is the story of Lightyear Alliance (formerly Unidial) selling Residential VoIP via MLM. My question: How do they pay all these people when, as I have pointed out in the past, these companies aren't making any money???

ITC's numbers

ITC^Deltacom reported "For the quarter ended December 31, 2005, ITC^DeltaCom reported total operating revenues of $120.5 million, a net loss of $32.0 million.... For the full 2005 fiscal year, ITC^DeltaCom reported total operating revenues of $520.4 million, a net loss of $50.8 million."
  • "2005 financial results were negatively affected by anumber of challenges," said Richard E. Fish, EVP/CFO.
  • "They included churn and price deflation in our LD business,
  • continuing price deflation in our wholesale business, and
  • low sales productivity and
  • high customer churn in our integrated communications services ...
  • Refinanced its secured indebtedness raising $239M from an investor group led by Tennenbaum Capital Partners, LLC
  • They were smart to leave Resi voice & sell colo center
  • tick-tock goes the death watch clock

satellite radio on cellphones

As techdirt explains: Satellite Radio Firms Don't Realize Mobile Phones Are Simply Pocket Computers. Some fans are using Windows Smartphones to log onto Sirius radio's website and stream the music, which is peeving off both the cellular network and the satellite radio companies. Go figure! Then give them what they want!

Bells need to Pay Google

DSL is only valuable if people can do something with the connection. The Bells & Cablecos pay HBO to carry their content, why should it be the reverse on the web? Maybe Google should collect $2.25 per DSL subscriber just like ESPN does.

In fact, as he points out, that's exactly how it works in the video business. Verizon just worked out a deal whereby they're paying CBS to be able to carry CBS on their new IPTV offering. It's hard to see how Verizon can argue that it makes sense for them to pay CBS, but that Google should pay them. In both cases, it's about adding content or services to the same network to make it valuable enough for consumers to sign up. Evslin points out (as we have in the past as well) that none of this is an issue if there's real competition. The fact that we're seeing these threats (even if the telcos are trying to backtrack a little) suggests that the telcos don't see themselves in a competitive market when it comes to internet connectivity.

In fact, the one thing that ISP Marketing misses out on is not the price but the value of an end-to-end experience plus the many ways that the hand-holding makes the internet experience so much better.

Alcatel Buying Lucent

In a move that will consolidate two telco hardware companies that have hit rough times, Alcatel is in merge talks with Lucent. Lucent, a former AT&T, only has a couple of customers left - AT&T, Sprint, Verizon and Qwest (who is being eyed by VZ). The CLEC market has dried up for Lucent. Alcatel made its fame in BOC DSL. Now it is pushing into PON, but how many customers will that be? Marconi (the famous radio company) was eaten by Ericsson. That leaves Nortel standing alone, feeling like Qwest. (Nortel does have a JV with LG, might be some future there).

Wednesday, March 22, 2006

USIIA's Phantom Problem

One of the US Internet Industry Association's problems is that they mis-represent themselves as an ISP association. They are a mouthpiece for VZ, who comfortably sits on their board. But in this article Dave McClure says the Net Neutrality is a "phantom problem". The quote: ""Network neutrality continues to be nothing more than a solution in search of a problem," said David McClure, president and chief executive of the organization, whose membership is heavily relying on telecommunications companies. " BTW, Cisco weighed in on the side of no laws for Net Neutrality. Makes me think ISPs should start using other gear.

Home Backup via NAS

Saw this crazy little machine clicking around tonight. "Yellow Machine FailSafe network storage appliance provides your home with a full suite of storage, security and networking features once found only in big company data centers. .. Yellow Machine provides you with an all-in-one solution for storage, backup and secure networking with VPN router/double firewall/8-port auto-sensing switch." Check it out. Then figure out how it (or something similar) can be sold to your clients.

Net Neutrality and the DMCA

If Telcos start prioritizing traffic, it would suggest that they are packet sniffing. (The wiretaps would suggest something similar). This puts them in a psoition to lose common carriage protection under the DMCA. Under the Act, ISPs aren't responsible for the traffic over their network unless they are sniffing. This may open the gate to the RIAA and MPAA suing the Telcos OR the telcos curbing bittorrent and p2p traffic. [ This is just late night musings. Tim Lee at Cato disses the DCMA here].

Martin and Net Neutrality

Martin Says FCC Has Authority To Enforce Net Neutrality, but that doesn't mean they will. Since he also states that "he supports network operators' desires to offer different levels of broadband service at different speeds, and at different pricing -- a so-called "tiered" Internet service structure that opponents say could give a market advantage to deep-pocket companies who can afford to pay service providers for preferential treatment." Former Chairman and Gorilla lap dog, Mike Powell, says everything is great and consumers will continue to win. I'd like to know how he defines winning and consumer. A New York Times Editorial is pro Net Neutrality, suggesting that the greedy b@stards that run the Telcos will suck every dime out of the consumers pocket that they can. Other articles suggest that it is big media (Google) versus big telco. My money is on Google, since the telcos have had a continuing brain drain for 3 straight years. This argument is so important that many people, groups and institutions are starting to weigh in. As DSLR asks: Is it about incumbents pulling a new profit stream out of thin-air to help fund inevitable (IP video cometh) network upgrades? And if so, haven't we already paid for those network upgrades from 1996 to 2006 with all the rate hikes? (Ask Bruce about the Tele-Barons' $200B Scandal).

Bundling Frustrations

"Surveys show that only 5 percent of subscribers buy bundled services, and only about quarter of consumers are interested in buying all their services from a single provider, she said." DSL Reports and the Washington Post write about the cable and telco bundling. Consumers " are reluctant to put all their subscriptions in the hands of a single company in an industry whose customer service is notoriously inconsistent." Biggest mess: quoted price is without fees and taxes; billing rate is usually a surprise! Plus details and small print kill it. Cheap LD is usually not part of the package. Pass the article on to your customers. Maybe get some real life stories from your clients - and use it as testimonial.

Charter Cable Update

DSL Reports: "Cable broadband provider Charter, struggling with $19 billion in debt, continues to sell off unprofitable cable systems, reports TVWeek. Today the company announced they've sold off networks serving almost 75,000 broadband and TV customers in Nevada, Colorado, New Mexico and Utah to subsidiaries of Orange Broadband Holding Co. This comes right on the heels of the $896 million sale of networks in West Virginia and Virginia."

IP Pulse on Vonage IPO

IP Pulse: Vonage filed a $250 million IPO with the SEC last month, after unsuccessfully trying to find a buyer willing to pay $2 billion for its consumer VoIP operations. The company considered a $600 million IPO but adjusted the IPO down before filing. As part of the move, Jeff Citron switched job titles to chairman and chief strategist, and Mike Snyder stepped in as CEO. Although Citron is the company founder and holds a 41% stake in the company, he brings in baggage, especially for a 35-year old. In 2003, he paid $22.5 million to settle charges from the SEC that he engaged in improper trading while a chief executive at Datek Online Holdings. Snyder's nose isn't altogether clean. He was president of ADT, while the company was involved in a $2 billion accounting scandal involving Tyco. Snyder came out of the company unscathed but ADT's CEO and CFO both were convicted of criminal conduct. In the filing, Vonage claims that it generated $174 million in revenues and a loss of $189.6 million. The service provider stated that it spent $232.4 million in marketing during 2004 and the first three quarters of 2005 and has plans to increase spending. Based on '05 marketing expenses, the company spent $213.77 for each new customer. The filing included the ominous declaration that "you should expect us to continue to generate net losses for the unforseeable future." At the end of February, Vonage reported that its customer base grew to exceed 1.5 million subscribers, making it one of the largest VoIP service providers in North America.

Who owns the Internet pipes?

Nifty PDF map of 134,855 routers on the internet and who owns them. "while AT&T and Verizon have the biggest piece, they don't dominate enough to be considered monopolist candidates."

VoIP is NOT about Price

"Yahoo actually recognizes that VoIP is just a feature of a more integrated personal communications platform. Given everything that the company is integrating into messenger, this makes a lot more sense. They're trying to make Yahoo messenger your "console" for communications (not just online communications). " Integrated Communications. One Number. Find-me/Follow-me. Unified Messenging. Voicemail-to-email. Conferencing. TAPI Compliant features. Click to dial. Drag-and-drop-conferencing. Call logs. Billing integration. Video phone. Video and web conferencing.

Why Attend Expos/Seminars/Conferences

One of the main reasons to attend industry events is the vibe. Meeting other people who are basically in the same boat as you. Share ideas. Brain Storm. Collaborate. Get energized. Learn. Grow.

Tuesday, March 21, 2006

VZ: No Common Carrier

Most of VZ's FCC Petition 04-440 was about DSL and Broadband, which the FCC already UN-regulated. But another part of it was about UN-regulating Frame Relay and ATM, since:
As of January 2004, these three long distance carriers together controlled 79% of the Frame Relay market and 60% of the ATM market, for a combined market share for enterprise broadband services of approximately 75%.% In contrast, Verizon accounts for only 4.2% of nationwide Frame Relay revenues, and only 5.6% of nationwide ATM revenues. The big three long distance providers are also the major providers for other specialized high-speed data services provided to business customers, such as IP VPN. And while AT&T, MCI & Sprint dominate, other carriers, such as such as Level 3, Qwest and XO also actively compete.
That's funny, because the competition NO LONGER EXISTS! Qwest and XO are reeling under debt - and really cannot compete against the new mega-telcos.

The Computer Inquiry rules impose a series of obligations on wireline common carriers that own transmission facilities and offer "enhanced services," including, among other things, Comparably Efficient Interconnection ("CEI") and Open Network Architecture ("ONA") requirements that force them to unbundle their broadband transmission services and to separate out and offer the transmission component of their services pursuant to tariff, on cost-based terms and conditions.

Common carrier was established in the 1934 Communications Act, which is the act that formed the basis of the FCC. "The concept of a common carrier is not exclusive to the telecom industry. It is a legal and social concept that dates back centuries. It was developed to ensure that the public retained access to fundamental services that use public rights of way. Other examples of common carriage include transportation services. For example, a ferry operator under the common carrier concept is free to operate a business transporting people and goods across a river, but because he is using a public waterway, he is required to provide service to everyone. He cannot indiscriminately choose to service some customers and not others. And while the ferry operator can determine the price for his services, the prices must be fair and reasonable." (From ZDNET) This begs the question: IF VZ is no longer a common carrier, do they have a right to the public right of way? Soon you will only be able to get any telecom service only if you live in a nice neighborhood.

VZ Gets a Gift, We Get the Bill: USF Goes Up!

Verizon gets forbearance on Docket 04-440 on March 20, 2006 and the consumers get an increase on USF from 10.2% to 10.9%. This is the notice from VZ:

Effective April 1, 2006, the Federal Universal Service Fund (FUSF) surcharge will increase from 10.2 percent per month to 10.9 percent. FUSF helps maintain affordable local telephone service for all customers, and also provides discounted service to schools, public libraries and low-income customers. This charge is reviewed quarterly by the FCC and does not result in any new revenue to Verizon.

Not directly, but who do you think is on the receiving end of much of the E-Rate monies? The BOCs. A good percentage of USF goes to rural areas like Alaska to keep the cost of local service from being $200 per month.

FCC Ducks Responsibility

In yet another gift to the Bells who are helping them wiretap, the US Gov't's communications agency, the FCC, let a forbearance petition from VZ expire with no vote. The result: VZ no longer is a common carrier on data circuits. Letting the petition expire with no vote was the coward's approach of the FCC Chairman, Kevin Martin. I don't know if he believes the dribble that comes out of his mouth or he justs like the power, but statements like this are starting to get stale: Martin said freeing Verizon of many "common carrier" obligations on those lines will give the company "the flexibility to further deploy its broadband services and fiber facilities without overly burdensome regulations." Someone should audit his bank account. Where's the oversight of this agency? If they aren't going to regulate anything, then please close shop and save me my tax dollars!

Net Neutrality

Let's think about this for a minute: How can prioritized networks work for the BOC? Independent ISPs, New Edge, Covad, cable, CLECs, WISPs, BPL and satellite - all provide alternative access to the internet. So how do the Bells think that they will keep customers under their new network plan?
  • Indie ISPs are being shut out of DSL in VZ-land. Access to FiOS will only be as a sales agent for VOL. ISPs need access to Layer 2 to differentiate services.
  • BST just added a PVC to the NSPs that looks like reselling the IP Product will be the next step. Commercial DSL agreements end in less than 2 years.
  • NEN and Covad can offer broadband --> for now. When do those commercial agreements expire?
  • WISPs - not enough subs to worry about
  • Cellular/EVDO - owned by the BOCs
  • CLECs - well, they only sell T1 service... too expensive to be a replacement
  • BPL - who knows? First of many competing standards was just released by OPERA. Trials are underway. IBM, Google and Microsoft have jumped in the fray.
  • Satellite - expensive and latency issues. Could it scale?
  • Cable - the MSOs would probably launch a similar plan
  • None of this will happen in the near term - it would jeopardize the merger plans. Also, it will require th deployment of IMS. The technical problems they are having with IPTV, ADSL2+, and VDSL, while rolling out more fiber, swapping out copper, deploying IMS, and merging all these companies together will keep them busy through 2007. Look for Net Neutrality to end in 2007.

Do CLECs still have a chance?

Combine the ever shifting sands at the FCC with the empty stares from most state PUC offices and top it off with the termination of UNE-P this past week, what do you get? Some rather weak looking companies. CLECs have relied on low pricing for their value for too long.
  • How many CLECs offer Integrated T1?
  • sell VoIP services?
  • How many say they own their network when in fact it is leased or piecemeal?
  • How many call themselves Tier 1 when Tier 2 (or 3) is more accurate?
  • How many CLECs have an original offering?
  • A one-page bill?
  • How many offer more services than competent salespeople to sell them?
  • How many now call frame relay MPLS?
Additional thoughts:
  1. With the BOCs cutting copper pairs every chance they get, CLEcs are losing access to customers. Impaired COs. Special Access Rates. DLCs. Remote COs. No wonder everyone is praying that WiMAX lives up to the hype. (Sadly, physics is still physics and you can only do so much with X amount of power in Y unlicensed spectrum).
  2. With the BOCs in bed with the NSA/Intelligient community and getting special favors in return for special favors, don't you think that CLECs need a new strategy?
  3. Might be time for a company retreat to brain-storm some good ideas and get a focus on who you are; who your customer is; what he needs; and provide it. --->Please note: I'd be happy to accept that invitation!
  4. BTW, local CLECs are in a different position from regional CLECs, like ITC and USLEC. Marketing is easier. Face to face contact with the customer is more prominent. You can feel and know th emarket more intimately.

Monday, March 20, 2006

A Look at the Cable Stocks

Here is a short sample of the analysis of cable stocks by FindProfit.com: "After decades of borrowing heavily to build out and then continuously upgrade their networks, cable companies finally turned the corner in recent years and broke into the black. Powered by their sheer scale (enabled by non-stop consolidation) and the bottom-line fruits of their fast-growing and high-margin broadband Internet and telephony services, all of the major cable companies started generating free cash flow."

Skype Me-Too's

P2P SIP was the next evolution from IM. The problem with Instant Messaging is that they are closed propriety systems. They don't inter-network. P2P SIP is the same way. Skype, Pulver's FWD, Y!'s Dialpad, et al. Most are free PC-to-PC within the community and pay outside of that. Keeping traffic inside the network has been an idea since the days of MCI's Friends-and-Family plan. It was two-fold: the users would bring more users to the network; and it is cheaper to leave traffic on one network than to drop it off to another network. Some collaborative software has IM built in so that people within can also communicate. Maybe ISPs should start thinking about adding it.

NetZero Offering Free VOIP

Well, it wasn't long before it became free, huh? NetZero, a United Online company, announced that "HiSpeed 3G users will now be able to make 100 minutes per month of free calls to any phone number in the United States, Canada or Puerto Rico using their computer." NetZero also has a Voice Unlimited plan for $14.95. It seems everyone wants to offer Voice.

Content Still King at AOL

I have been saying for a long while that for Residential ISPs, content is the way to stickiness. It is extremely difficult to compete on price in the consumer broadband space. And the triple-play option is a nice idea, but implementation is a whole other hair ball. So content is the key to sticky. "AOL has chosen to offer the early-reading program created by StudyDog Inc., a 4-year-old Beaverton company, as part of its new educational services products."

Selling Managed Services

Telecomweb's survey results shows:
"Although there are shades of difference between company employee-size segments, the primary motivator of reduced cost is closely aligned with operational improvements. Buyers and influencers of managed services report their top six motivators behind the consideration of the adoption of a managed service include improved overall network performance, increased network reliability, increased network availability, reduced operations cost, improved network quality of service and reduced business risk."
What does this tell you? It tells you WHY they buy. Shape your message accordingly.

How did the Bells Get a Free Pass?

It took Dave Burnstein at DSL Prime to point this out to me: "Telcos massively help governments to spy, whether in the U.S., France, or China. The EFF suit against AT&T for illegal wiretaps makes public what everyone in the business knows. AT&T has a former CIA director on the board, and every company has a high-level liaison. Just reading newspaper reports about all the “intelligence intercepts” make it obvious surveillance is pervasive. Occasionally, a telco will quietly complain that security demands have escalated so much they want higher government reimbursement, but mostly no one talks about it. " Leslie Cauley at USA Today has been writing about telecom for a while (and has a book out about the history and fall of AT&T). Her article about the NSA wiretaps and the Tele-Barons cooperation might go a long way to explain the RBOC friendly FCC. The Tele-Barons help the Gov't and the Gov't helps the Tele-Barons. Meanwhile all of the Boys Club gets rich. But at what expense?

Two-Thirds In U.S. Have Broadband

"In February, the number of households with high-speed connections rose 28 percent to 95.5 million from 74.3 million in the same month a year ago, Nielsen/NetRatings said. That amounted to 68 percent of the U.S. online population. Nearly three-quarters of Americans can get on the Internet from home. " The Bells love-hate this. To get to this penetration number they had to drop their DSL rates to $15. VZ added 600k users and claims it ran out of DSLAMs. But at the same time home users are burning up bandwidth on video sharing at iFilm, Y!, YouTube, etc. ----- If the pipe is $15, and entertainment is available from other providers (like Starz, CinemaNow, iFilm), the Bells ain't making much. And that pisses them off!

Monday, March 13, 2006

BST Merging with at&t out of weakness

Great cynical view of the RBOC model and why consolidation is necessary from Kevin Maney at USA Today. Even a good quote from Bruce Kushnick from TeleTruth:

"Using their own data, Verizon and SBC claimed they would spend $48.9 billion and have 36.5 million households by 2000" on hot new broadband systems, says Bruce Kushnick, who this week released his e-book The $200 Billion Broadband Scandal, which details alleged phone company misdeeds in broadband. "This was fiber-to-the-curb services ... with 500-plus channels," Kushnick says. Not only did those build-outs not happen, Kushnick says, but every time one local phone company merged with another, nascent broadband projects got shut down. "These companies failed to deliver on their fiber-optic commitments, and it is now clear that the mergers were to blame," he says. After Sunday's announcement, AT&T CEO Ed Whitacre said the combined companies would be in a better position to build new networks and compete with cable TV. But if history repeats, those projects will get just about as much priority as McDonald's gives to health food.

The other consideration is that SBC has a lousy record on merger acquisition and integration. Absorbing AT&T and BellSouth into the old SBC infrastructure will be a challenge. CNN Money writes: "With its $65 billion agreement to buy BellSouth Corp., AT&T Inc. faces one of the biggest challenges in its history: integrating two stodgy telephone companies with the nation's largest wireless company and making good on $18 billion in promised cost savings." -----> Have you read Bruce's book yet?

Wednesday, March 08, 2006

Cisco's Unified Messaging Embraces SIP

Reposted from Tom Keating's VoIP & Gadgets Blog article:
Cisco at 12am March 6th will launch their new Unified Communications System aimed at streamlining business processes, and helping to drive productivity. Unified Communications (UC) will feature new presence, desktop tools, mobile integration and network intelligence to improve business agility and customer interaction, but just as importantly as I will indicate later, Cisco is fully embracing the SIP standard on their desktop phones.
Coul dthere be any more marketing speak in that paragraph? streamlining, presence, integration, and productivity. Buzz words. If you are offering VOIP or UM, you need to leave the buzz behind and tell a story. Like: With the new UCS, you can point-and-click your way to easy communications and even click off the noise of the phone and email while you focus on a project or a client meeting. That is a better message than the marketing.

Jack Trout on WOMA

Jack Trout, the father of Positioning, writes in his Forbes column about WOMA (word-of-mouth advertising). John at Brand Autopsy is mad about his comments. (Probably because it doesn't have to do with Starbucks, which seems to be nearly all he can talk about). And George Silverman, who calls himself the father of WOMM, weighs in on how out of touch Trout is. George and John neglect to mention that WOMA mainly works for REMARKABLE products and services, like ipods and Starbucks. How many remarkable things are there? The Segway did indeed get buzz, but it was all negative. Looking at DSL Reports (or ApartmentReviews.com or TripAdvisor or Amazon book reviews), people want to offer their opinions. But how much weight should that opinion had? Some people love something at the same time other people hate it. George points out that WOMA is really about "Decision Simplification in the Age of Overload: Making it easy for the customer to find a solution to a problem (or desire or need), sort through the BS, try successfully and use your product pleasurably." In other words, we have too many choices, so you tend to listen to people you know and/or respect for a testimonial. And Jack is right: You can't control that.

Tuesday, March 07, 2006

By Dropping Prices, DSL catches cable

SBC and VZ slashed DSL pricing to as low as $13 per month in order to penetrate the consumer broadband market that cable has dominated since 1999. 2005 was the first year that DSL had more new lines than cable - DSL gains 5M to cables 4M users. But cable has an overall lead with 24M to ILEC 18M. Cable typically charges $35 and up. Also, cable triple-play has registered 5M customers now. No wonder the Bells are putting Mama back together.

DTV, DISH and WiMax

Analysts speculate that DirecTV and Echostart will team up to build a WiMax network to offer their own triple-play into the rural markets that they already have a foothold.

BST-att: the argument

Mercury news breaks down the arguments:
  • "If approved, this merger will lead to higher local, long-distance and cell phone prices for consumers across the country,'' said Gene Kimmelman, of Consumers Union, publisher of Consumer Reports.
  • "But AT&T says it's facing competition from all sides.
  • The company competes with cable companies like Comcast over customers for television and broadband services.
  • AT&T's Cingular Wireless competes with Verizon Wireless, Sprint-Nextel and T-Mobile.
  • And new technologies that allow consumers to make phone calls over the Internet leave AT&T battling with upstarts like eBay's Skype software and services like Vonage."

Embarq

Sprint is set to spinoff the new wireline company, Embarq Corporation, in 2Q06. The new company will be providing local phone and data services across 18 states, and wireless and video services through partnerships with Sprint Nextel and EchoStar Dish Network. Embarq will have about $6B in revenues and be the 5th largest ILEC.
Debt concerns slowed the process, says Sprint spokesman.

ISP Ideas

BellSouth Managed Home Service: "BST trials help desk service to help customers install and troubleshoot their home computers." GDrive: "Google Inc. is preparing to offer online storage to Web users, creating a mirror image of data stored on consumer hard drives, according to company documents that were mistakenly released on the Web."

at&t-bst after-thoughts

Some other mega-merger thoughts:
  • "AT&T’s purchase of BellSouth and Cingular means the loss of 10,000 jobs over the next three years, said CFO Rick Linder. Those cuts are in addition to the 13,000 jobs that will be phased out by 2008 from the SBC-AT&T merger."
  • "Cingular Wireless LLC, a joint venture of AT&T and BellSouth, cut about 7,000 jobs after its $41 billion acquisition of AT&T Wireless in October 2004," Forbes writes.
  • Isen points out: "Don't be so sure the Duopoly will last! Here's one clue: the first draft of the Barton BITS Bill prohibited telcos from buying cablecos. The second draft didn't."
  • Forbes: "The wireless operations will be the growth engine of the new company, and will account for one third of the combined revenue."
  • This deal isn't about phones--it's about every other service that can be stuffed down a phone line. "This merger is about buying the lines that connect to the homes of BellSouth customers and selling them everything you can squeeze down a fiber-optic line, including television, Internet, movies and music." (It is mainly about Cingular, as cellular is the growth engine of the ILECs - just ask Sprint-Embarq, Alltel-Valor, and VZ-VZW)
  • Banc of America Securities said Cablevision may be the biggest beneficiary of the AT&T deal. I say it is the lawyers and banks that win the biggest. (Consumers of course get to take another shot to the 5-hole).
  • Some of the $2B in savings from the proposed acquisition would come from reduced advertising expenses and combining the backbone network and information-technology operations of the companies - as well as combining payments to lobbyists, lawyers and Congressmen.
  • "The deal also makes it "highly unlikely" that AT&T would move to acquire EchoStar, the analyst said."

Ma Bell Buys BellSouth

Om Malik from Business 2.0 writes in CNN Money about the at&t-BST merger: "If you include the roughly $21.6 billion in proportionate debt, the total purchase price equals to about $89 billion." "One cannot fault AT&T for making such an audacious move, since it has been runner up in the broadband business to cable providers. .. In addition, it has been losing wireline customers to wireless properties, and also to new VoIP-based phone services from cable companies. According to UBS research estimates, there were 5.1 million cable voice users at year end, up 63% annually." "It is ironic that market forces are putting back together what the Justice Department broke up with the Judge Greene consent decree (in 1984)," says Sanjay Subhedar. Maybe we should focus on the positives:
  1. Less lobbyists because there will only be 2 companies.
  2. Less voices on that side as well - up against 5 cableco voices and many CLECs.
  3. Less customer service.
  4. At least 12 more months of consolidation and back-office integration - plenty of time to take market share from them in a single niche.

Seth Godin Speaking at Google

Google video of Seth Godin speaking at Google about Marketing. Priceless.

Friday, March 03, 2006

VZ Biz Gets Into Remote PC Mgmt

MCI, now called VZ Business, has unveiled "a Basic option for managing the operating systems on its customers' servers." Managed Apps and taking over IT services for your customers is the strategy that has some legs.

E-Myth and then some

I'm reading E-Myth Mastery and it is work. Gerber takes pages to ramble on about something that boils down to 2 sentences. This is why I like reading Seth Godin, Tom Peters, Jeffrey Fox, and Harry Beckwith. Short and to the point. I could see if the book was loaded with examples and case studies, but, in fact, it is a running monologue of what crosses his mind and his conversations with Sarah, his client. (I want to point out that Sarah was a consulting client, who apparently did not get the message the first time round, so has to go through a second round of consulting, only to find there might have been a problem with the consulting process itself). Anyway, here's the basic lesson, besides work ON your business not just IN it.

Strategy + Systems + People +Passion + Execution = Success

... and you can not skip any component. My coach, Loral Langemeier, says that if you are still cleaning your house (or doing other menial tasks) then you will never be successful. You lack the ability to manage, delegate, and prioritize. (I still clean my house, so I haven't gotten their yet).

Content & Social Media

Yahoo's media chief on Y! strategy and content

Indeed, Mr. Braun said yesterday that the way to keep users on Yahoo's site longer — and thus be able to show them more advertising — was to offer ways they can create their own content and look at content created by others. He pointed to the site Yahoo built for the 2006 Winter Olympics, which prominently featured photographs from Flickr, Yahoo's photo-sharing site, along with articles both by news agencies and by a few columnists exclusive to Yahoo. "I now get excited about user-generated content the way I used to get excited about thinking about what television shows would work," he said.

The Web 2.0 is all about sharing, connecting, communicating. Social Media works when it allows people to express themselves; kep connected to family & friends; share what matters to people; and allows for control of who sees it. As Jennifer Rice explains:

Above risk aversion we find connection and belonging. Combine this fundamental need with the fact that our society has become extremely fragmented, and you've got (IMO) the primary fueling factor for the explosion of social technologies like blogs, wikis and forums.

On the creative / business side, it is about collaboration and productivity. Broadband Penetration - the capturing of the market, the selling deep into a lit area, the creation of customers - is about telling the story from the customer side about connecting, sharing, producing, creating, expressing and communicating.

Thursday, March 02, 2006

Manage Services for Money

  • From Telephony magazine: "Businesses today are looking for help for a wide range of communications technologies, from VPNs and IP telephony to network security and remote access. They are increasingly interested in outsourcing these and other advanced network requirements in order to reduce capital expenditures while increasing their focus on core competencies. "
  • From another article: "Managed voice-over-IP (VoIP) services will see a 65% compound annual growth rate over the next three years, according to Ovum. And managed network security is now the most commonly adopted IP service."
  • And more telling: " The results indicate that these end users are now ready to accept managed services.... When technology is new, enterprises are less inclined to entrust another entity to run their network, but as technology becomes mainstream, there is more of a willingness to out-task to a service provider because it is no longer seen as a science project,” Jorgenson said.
  • This means that if you can tell the story of how you are better equipped to manage their network (and they trust you to do so), they can spend those hours making money in their own business. If I spend 3 hours per week on PC and network repair, dependning on my billing, that's $300 per week wasted.
  • Also, because we are storing great and great amounts of data, both personal and business, managed storage solutions will be in demand. (Can't you offer online file storage to your customers? It is disaster recovery.)

VOIP's Irrelevance

With FiOS and other integrated and converged networks, VOIP is becoming irrelevant. People don't think about the technology - they just want dial-tone. Best way to market VOIP is to talk about the productivity, the solution, the dial-tone with integration.
"In the short span of two years, voice-over-IP service has gone from being the hottest thing on the market to the brink of irrelevancy.... A recent InStat report stated that 73% of the consumers buying voice did so without making a conscious choice about a technology change."

NYC moves closer to broadband plan

"Broadband is a fundamental civil right and human right," Bill de Blasio, a city council member, said during the session on Wednesday. (No further comment).

Intrado 911 Update

Telephony mag has the update on Intrado - it's purchase by West and it's partnering with 3 location determination technology vendors.

BB Penetration, not Deployment

"Many U.S. households that do not have Internet service have reported they are not interested in going online anytime soon, a survey has revealed, raising speculation that Internet adoption might be on the cusp of a major slowdown.....Many stated that they do not feel the need to hook up the Internet at home because they already have it at their workplaces. Others noted that they simply are not interested in anything on the Web. And a smaller number, 8 percent, said they are not sure how to use the Internet. "
For similar reasons (I suppose), many still find dial-up to be sufficient. Hence, why the price of BroadBand has to drop to dial-up rates to get conversion. OR You have to tell a story about why BB is enriching. Do you remember the AT&T ads Reach Out and Touch Someone? That same approach will be needed to get BB Penetration. (It's not about deployment; it's about getting customers on the networks that are already deployed).

Viacom & Social Networking

In the "fight to stay relevant with fickle young tastemakers on the Web", "MTV owner Viacom Inc. plans to enter the business of connecting youth viewers on the Internet this year, a top Viacom executive said on Wednesday, amid threats of losing its cool cachet to News Corp." News Corp. owns MySpace.com, the number 5 most viewed site on the web. Social Media is a blossoming business on the web, because it attracts advertisers who like those 17-25 year olds.

VPN II

(PRNewswire) "BellSouth today announced that health care organizations are relying on the provider's flexible, managed VPN service to route medical records and imaging files between multiple patient service locations. This service provides the high bandwidth needed to move large files and permits customers to mix different access speeds and types on the same meshed network infrastructure."

  • Multi-location is difficult for local ISPs, but it can be done. These types of customers can not use DSL effectively. Large file uploads require more bandwidth than best-effort DSL. Wireless, frame, P2P, MetroE.
  • When you have an opportunity to propose a network like this, you need to really reach outside the box and get creative.
  • VPN and MPLS are all the rage, but what does that mean to the customer??
  • Secure, reliable, connection, worry-free, simple bill, one-single-contact, no toll-free number, Bob-here-will-take-good-care-of-you, just-like-we-did-for-Jim --- these are the things that make the customer buy from you.

Need help with these proposals? Give me a shout at peter at 4isps dot com.

dot com price hikes

iCann gives Verisign the go ahead.

IPTV's biggest challenge

IPTV's biggest challenge is Growing the market. Telephony mag gets it right with this article: "Virtually every video customer a telco wins will come at the expense of either cable or satellite," becuz the TV market is static. "Even DTV has faced some challenges in growth but could be positioned to be a leader in HDTV." “With telephony [the service telcos are defending with their video services] one of the things that fools everyone is that you have more than 100% penetration with cell phones... If you look at the figures, somewhere around 85% of households can be accounted for with some type of pay TV. Unless you can come up with a scenario that is very improbable at this point, the most likely case is people won't subscribe to more than one [video service].” "Bells should keep satellite friends despite slowing growth. “If there's one group you don't want to push into broadband, it's the satellite guys,” Schnee said."

BST Net Adds of DTV Customers Q105 = 113,000 Q205 = 80,000 Q305 = 66,000 Q405 = 63,000 Source: BellSouth

Telephony mag states, "For anyone doubting the ability of communications service providers to capture market share from cable, the entertainment services market-share leader, they need look no farther than DBS." It's a good read: InFocus: How to compete against DBS and cable

BST and DTV

"BST announced its agreement with DirectTV to continue a five-year exclusive marketing partnership under which DirecTV customers in BellSouth’s areas can order FastAccess DSL service through DirecTV, “effectively creating a new sales channel for the broadband service,” the analyst said in a report." “We believe increased competitive pressures from cable operators will present a challenge to BellSouth’s industry-leading wireline metrics,” said McCormack.

ELN Rolls Out Treo on Cellular

  • EarthLink Wireless is an MVNO that runs on 2 major CDMA networks - the primary one being Sprint. (This means that ELNW or Helio or ELN-SK is just a Marketing firm.
  • "* EarthLink Wireless network services are provided on the Sprint® Nationwide PCS Network. Where Sprint coverage is not available, your phone will roam on another nationwide CDMA network, FREE. Under EarthLink's arrangement with Sprint, EarthLink customers have access to service anywhere on the Sprint Nationwide PCS Network, reaching more than 250 million people. Although Sprint provides EarthLink Wireless subscribers access to its wireless network and its wireless services, EarthLink Wireless is responsible to the EarthLink Wireless subscribers for the service. Please call EarthLink Wireless with any questions or comments regarding this service."
  • Funny that they mention this: "EarthLink is one of the few companies that still operate all of their sales and customer support call centers in the USA!"
  • Blackberry 7250 for $49 and the Treo 650 for $69 beats the SprintPCS deal that I can offer (Palm Treo 650 for $99.95).

VZ VOIP Plan

"New services will include dedicated toll-free numbers over IP." That's nice, but the Integrated T1 offering targeting SMB's is a direct attack on CLECs: "A flexible IP T1 service will also be offered for smaller businesses that have less than 24 phone lines. These companies will be able to keep their existing equipment and calling features, but upgrade to a converged T1-like system that allows voice and data to be transferred over a single connection." This has been the CLEC bread-and-butter. Oh, well, looks like USLEC, Nuvox, ITC^Deltacom, and Xspedius better get busy with a new plan. (UNE-P ends in 13 days as well). (See my VPN post about customer perceptions).

BellSouth, Vint Cerf debate 'Net neutrality

Bennett Ross, BellSouth's general counsel, was actually debating Net Neutrality, because, let's face it, the Tele-Barons don't know squat about the Internet. It is just one more vehicle to grab money to shore up it's failing revenue engine. How do you debate Net Neutrality? You either have it or you don't. The US economic engine could not withstand a burp in the e-commerce engine. Banks need Bill Pay to reduce churn. Terminal Services, Citrix, VPN, AS/400 - all these apps require low latency, which would be effected if we lose the way the Internet is currently running.
I had argued that letting Bells buy Internet Backbones would be a bad thing. What do they know about running a global IP network? Even the guys at AT&T, MCI and Sprint are still trying to figure it out.

ELN Extends BST DSL Deal

EarthLink, Inc. announced the extension of its DSL agreement with BellSouth. The agreement will be extended through to 2008. Said Steven Dean, EarthLink VP of infrastructure ops, "This agreement extends our long-term relationship with BellSouth to deliver an always-on, DSL connection to customers who want an enhanced Internet experience."

BST Still Fighting LUS

The only time Cox and BST agree is when it's time to oppose muni projects. They have been relentless in Lafayette, LA. Stop wasting time and money fighting it - and COMPROMISE! Maybe build the network for them. (Munis do not want to run a network, but with the greenlining that the Tele-Barons are prone to, city governments don't have much choice. As BB Properties magazine can atest, without broadband availability, a town is at a disadvantage in this global economy).

BellSouth Numbers

BellSouth was seriously hurt by hurricanes. But also line erosion: "By the company's own admission, customers are abandoning traditional landlines in droves. They're switching to cell phones, as well as voice over Internet protocol (VoIP) service... The competitors have steadily eroded BellSouth's customer base by offering cheaper calling plans packed with features such as free voice mail and unlimited long distance." (So VOIP adoption really is all about price). Revenues were up on DSL and Cingular: "Revenues rose about 2% to $5.24 billion, thanks to the addition of 204,000 DSL Internet subscriber lines; nearly 3 million customers now surf the Internet via BellSouth's DSL."

"Technological advances are increasingly integrating computers, phones, and wireless devices into the ways we communicate. That's a challenge for a company that relies heavily on traditional phone service for revenues, since the landline business is becoming less and less relevant to the average consumer. BellSouth's key to success, at least for now, is to bundle together wireless, DSL, long distance, and satellite TV service at competitive rates. This strategy will likely keep profits growing, albeit more moderately than before, and allow the company to reap higher margins via its entrenched infrastructure. "

AOL's Broadband Plan

AOL raised the price on its dial-up service to match its pricing for broadband. AOL is charging $29.95 for AOL and BST DSL. AOL is working with TW cable and VZ to offer BB service as low as $22.95. I say: Too little, too late. One reason AOL is still relevant is because the content is still desirable to some - and many people with @aol.com emails do not know how to switch from AOL to another service. Help people switch - while saving address books and email messages - and there is a market for the grabbing.

VPN

Why do the Tele-Barons keep landing the Enterprise VPN sales? A couple of reasons:
  1. The Perception Problem: Is the Customer comfortable with the idea that your smaller company can deliver all the services you offer in a similar manner as a Tele-Baron? In other words, is your catalog so big, that you are not perceived as an expert at any one service. This relegates you to selling on price sometimes.
  2. The Sales Problem: The Key is to NOT talk about the technology, but to talk about How the Solution You Offer Makes Their Lives easier and productive and in many cases compliant. Time does equal Money. Tell a Story without the acronymns about how you can take a way the pain of running/managing the network and get back to running the business.
  3. The Sales Problem # 2: Do you have anyone spreading the word about your business? There was a good article about Guerilla Marketing to beat the Gorilla in BB Properties. You can't out-spend them (or follow their marketing strategy); you have to out-smart them instead. (That's where a Marketing Idea Guy like me comes in! ;)

Adidas Posts 4Q Loss on Reebok Acquisition

I guess I focus so much on telecom and politics that Adidas buying Reebok slipped past my radar. I guess Nike is still kicking everyon'e butt. I remember when Reebok and Nike used to go head-to-head like BK & Mickey D's and Pepsi-Coke.

Wednesday, March 01, 2006

Social Media - a follow-up

Yesterday RAD-INFO ran a webinar on How to Add Revenue through Web Apps. For Residential ISPs, Social Media is something to watch. This issue of Business 2.0 features the Top 25 Internet companies to watch (Web 2.0).
  • Social media: Digg, Last.fm, Newsvine, Tagworld, YouTube, and Yahoo
  • Mashups and Filters: Bloglines, Eurekster, Simply Hired, Technorati, Trulia, and Google
  • New Phone: Fonality, SIPphone, Iotum, Vivox, and Skype
  • (Funny, but in a separate article it says that MSOs are dominating VOIP)
  • WebTop: JotSpot, 30Boxes, 37Signals, Writely, Zimbra and Microsoft
  • (Zimbra is online email powered with AJAX)
  • Under the Hood: Brightcove, Jigsaw, SimpleFeed, SalesForce.com, SixApart, and Amazon.com
  • Veoh, a San Diego Internet video start-up, is taking on the the likes of YouTube, iFilm, and vSocial.

The slides from the webinar are available online. Also, get a free 30-day trial of HyperOffice collaboration suite by emailing me at peter at rad-info dot net.

How can you get unstuck?

NFIB (National Federation of Independent Businesses) publishes a quarterly magazine called MyBusiness. I encourage you to join NFIB and read the magazine. This issue has an article about problems business owners have - and how to fix them.
  • Is self-doubt keeping you from pursuing all the opportunities within your reach? Try Jain’s tips on reenergizing yourself: Reframe your feelings. Try a variety of techniques to shift your perspective. For example, try sandwiching a task you find difficult between two activities that relax you or give you confidence.
  • Invest in ongoing learning. Read a book, take a class or find a mentor. Learning is energizing. You are moving toward something rather than running away.
  • Develop systems. Whether it’s a software program that helps you organize your sales leads or just a daily to-do list, systems can help you apply best practices and boost your confidence.
  • Get back to the basics. Business owners often sacrifice sleep, good meals and exercise. But you can't feel good if you aren't taking good care of yourself.
  • Spend time with yourself. Don't neglect your own inner wisdom. Advisers are important, but be clear about what you want. If you are initiating a strategy, make sure you're behind it 100 percent.

Corel and Lenovo

"Corel and Lenovo Group have inked a deal to ship Corel's office productivity and small-business software on the new line of Lenovo PCs." What is the Corel Small Business Center? A suite of office productivity software that includes Corel WordPerfect Office, Corel Photo Album 6 Starter Edition, Corel Paint Shop Pro X, and CorelDRAW Graphics Suite. ==> Why not ship OpenOffice on your PCs and laptops??