Wednesday, June 30, 2004

June - What a Month!

June has been marked by one hit after the other... ... UNE-P regulations ruled out by the Federal Court on June 15th (CLECs reeling from that ruling as Z-Tel & AT&T backed out of 18 states by June 29). ... Brand-X / Open Access Cable decision extended till July 24 SuperComm 2004 had many surprises: Chairman Powell talking as if the industry was going great; triple play; and IPTV by Microsoft. "Powell said that, overall, he is optimistic about the future of the telecom industry, and he thinks its worst days are over. "I think that the industry will be hot a year from now. We'll be on fire."" Rural Telocs are being encroached by both cable and Vonage. Hey, why should they be any different? This battle being played out in Texas. Time Warner and Vonage—both of which are overbuilding in its territory north of San Antonio, Texas are competing against Guadalupe Valley Telephone Cooperative. VoIP over Powerlines ..... that was quick! First, the power companies weren't sure they wanted to enter telecom again (or if they could with their ancient grid infrastructure). Now they are trialing both Internet and VoIP. (Makes sense, TW says that there is more margin in VoIP than broadcast. No kidding with ESPN getting $2 per subscriber). "You've no idea how much the MSOs have to pay content owners such as ESPN for their feeds," warned Piehler, who said that while the cable operators might drive a lot of revenue from their video and broadcast capabilities, most of that goes back out the door to the major content suppliers in license fees. "The MSOs look at VOIP as a better profit opportunity," he added. Triple Play challenges include Billing (big surprise) and the "legacy" DSLAM architecture that was made for Best Effort service which video and voice are NOT. AT&T dropped selling Residential Local & LD in 18 states this month. Ma Bell is rolling out VoIP to Residential as well as the SME market. (Ma Bell is actually SBC or Verizon - both bigger and meaner than the original AT&T pre-divestiture). TimeWarner is rolling out VoIP in its major markets. Starz & Real Networks are offering Starz on Demand for $13 over broadband. Verizon hints at summer changes... "All this new stuff is going to be coming over the summer, and consumers are going to be the beneficiaries," one Verizon marketing exec tells the LA Times- referring to the company's VoIP and 3Mbps plans. On the one hand, this month has been wild. Watching everyone encroach on everyone else - Broadband taking landlines, LD and now premium channels from the Big Boys. Cableco versus RBOC. Soon RBOC versus RBOC. The yipping at the RBOC heels by AT&T and MCI over the UNE-P rules. The total absence of equipment vendors and CLECs to even show up to watch the fight. On the other hand, it all represents the next telecom implosion. Only the smart will survive. Retaining customers will be more important than acquiring new ones. -------------------- "It’s no secret that the more services bundled under one trusted brand, the less likely customers are to leave a provider. In fact, Yankee Group finds that tying two services together causes churn to fall by one-quarter; tying three causes it to fall another eighth; and adding a fourth leads to churn rates falling an additional sixteenth. JD Power and Associates maintains that as much as 40 percent of consumers would prefer all their communication services—including local, long distance, Internet, TV and even wireless—to be delivered by a single provider on a single bill. The question remains of whether they’d prefer that single bill to come from their phone company or their cable provider. There’s no question that cable providers are poised to realize substantial revenue gains, as they can upsell VoIP to existing subscribers already using pay-per-view and Internet capabilities. Cable companies have already witnessed a 41 percent increase in spending, with an average of $42 spent each month. " "Off the record, many industry pundits concede that triple play bundles could potentially cripple existing activation, order management, provisioning and billing systems. Some go so far as to say this will be the thing that finally kills off legacy OSSes, as sophisticated access networks will require complex configuration, provisioning, activation and discovery. " "However, consumers will respond to price for only a limited time, because they will want to migrate to QoS-based enhanced services. Carriers will have to acknowledge when someone downloads MP3 files it can cause a VoIP connection to drop out or a video to be shaky. Carriers will have to have well-defined service levels that exist independent of one another. “You still have to put a physical DSL connection, but also define and configure three or more logical connections on top of the physical layer,” says Mark Nicholson, CTO and head of product development at Syndesis. ---------------------------------------- from Jeff Pulver's blog: June 25, 2004 Telecom is a 2004 Presidential Platform Issue! Yesterday's speech by President Bush followed by a speech by Kerry made it official: Telecom has become a platform issue in the 2004 Presidential race! While I was in Washington, D.C. listening to President Bush, Kerry offered what seemed like similar ideas on Thursday in Silicon Valley. I liked what the President said regarding his Broadband Policy and I am supportive of it. I'm not sure how long ago it has been (if ever) since Telecom Policy has been a campaign platform issue but I think it is great that it is, and my hope is that we as a Nation can achieve the President's stated Broadband goals for the United States by 2007. Bush's speech is online; both a video and transcript.

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