Friday, January 15, 2016

The Ole Business Model Needs to Pivot

The original ISP bought a PRI and an Internet T1 from the ILEC, plugged it into a modem bank and then sold some accounts for $25 a pop. CLECs helped to reduce the cost of the PRI and Internet over time. But dial-up gave way to DSL. DSL was mainly resale of the ILEC or CLEC (Northpoint, Rhythms,Covad). The ISP bought a hub circuit and sold DSL circuits off the hub.

The surprising thing is that as we make the move to fiber and Gigabit, the resale business model is in full swing. The time when CLEC's colocated in the central office, added their own gear and used copper to supply the last mile to the customer for T1, T3, xDSL and EoC is coming to a close I think. VZ, AT&T don't care what anyone says they are selling off, decommissioning and not installing any new copper wires. It is all fiber, all theirs and available only through commercial agreement.

In the current resale model, CLECs would need to remember the era just after UNE-P was canceled. In that era, they struggled to survive until commercial agreements were negotiated that replaced the UNE-P deal. Granite Telecom is a billion dollar company based on copper contracts, but even they are shifting to an MDU product and cloud.

You can ride it out like the UNE-P guys and LD minutes did. Or you can pivot or innovate or change up your game a little bit. At the FISPA Live event in Tampa on Fen. 24-26 I will presenting on How to Compete. I have presented that before (2012, see here and buy the mp3)... and this will be a 30 minute session. If you can't make it, then join me on a 1 hour webinar about Competing Against the Incumbents on Friday, Feb. 19, 2016 at Noon Eastern time. REGISTER HERE:

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