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“Peter possesses a keen sense and insight for turning telecom services and products into customers and dollars. He is passionate about this industry, his work and the people he serves. Visit his site, read his blog and sign up for his newsletter at marketingideaguy.com and you will discover what makes Peter a sought after marketing consultant.”

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What Business Are They in?
NSP Strategist
Friday, 09 December 2011 10:12

The VZW-SpectrumCo deal has every blogger in a frenzy. GigaOm is writing how DirecTV's partnership with VZT is over since VZ will start selling cable's TV product. My head hurts from even reading that. The Duopoly are going to start re-selling each others services? Where and when?

Yes, the SpectrumCo MSO's - BHN, TWC and Comcast - will be selling VZW mobile data and voice as sales agents (like Qwest). I don't know how they leap from that to VZT is going to be selling Comcast TV. But the WSJ printed, "Then these rivals will cooperate and cross-sell their services in ways to confound regulators who pay lip service to creative destruction but still expect businesses to stay in their neat categories."

FiOS is done. That project was a financial failure for VZ, because it costs more than they thought to pass a house with fiber, acquire that customer, install that service over the FiOS network, and retain that customer. The costs were higher, the take rate was lower (expectation was 50%, they are at 28% partially due to MDU FiOS projects) and the ARPU was lower. It's as low as $79 for a triple play bundle in Tampa - not including the huge fees and add-on charges.

VZW is piloting fixed LTE, maybe in conjunction with DirecTV to sell more broadband and voice. DirecTV has installers for this. However, GigaOm reports that Verizon Communications CEO Lowell McAdam confirmed this pilot is dead. This doesn't mean DSL is dead (as DSLR is speculating and what LightReading is saying). DSL has always been under attack by cable. Cable won. Cheaper and faster (at least as marketed.) But not everyone cares! Some people want cheap broadband (DSL). Some people still want to pay $20 per month for dial-up!!! So who knows?

Has VZ given up on copper and fiber? Maybe for this quarter. As soon as the landline revenues drop enough for a stock hit, Lowell will have to re-steer the ship again.

And wait for it....

What are the cable magazines writing? That Cable is getting out of TV!!!

Why? Because content - especially ESPN and other sports stations owned by cablecos - is getting too expensive. Cable-cutting has started. Google, Netflix, Apple, Amazon and soon DISH (which owns Blockbuster) are all eating into the lucrative VOD/PPV (video-on-demand and pay-per-view systems). The economy has not helped.

As there was a shift at ATT and VZ when they announced that they were mobile companies last year, Time-Warner Cable's strategy chief, Peter Stern: "We're basically a broadband (Internet) provider....As a convenience to our customers we (also) package and distribute television (programming)". See that shift?!

Cable is the winner because the MSO's had $100B in debt from DOCSIS 2.0 upgrades, which gave them the necessary network plant for HDTV and Internet. TV gave them the eyeballs. Moving to Internet was gravy, since TV is the least profitable service in the triple-play (just ask Frontier or VZ).

VZ and ILEC's can't give up the ghost on wireline yet anyway. Why? Business services. Voice and data to businesses is a huge revenue silo for ILECs.

If Clearwire had its act together, it could have been the LTE or WiMAX provider for the cablecos. Sprint has been too busy rearranging deck chairs to do what it needed to do to solidify its partnership with cablecos (going back to Pivot).

Having dealt with VZ, I wonder how long the 3 SpectrumCo partners will feel like "partners" before they are reaching for lawyers.

Too many moving parts. The FCC has to approve it.

Peter Radizeski is a telecommunications consultant and analyst with RAD-INFO INC. Service Providers have called on RAD-INFO INC for assistance building a channel, improving sales, managing online marketing efforts, and overall company strategy. Contact RAD-INFO INC at 813-963-5884 or http://rad-info.net

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Section 179 for 2011
NSP Strategist
Thursday, 08 December 2011 06:03

Disclaimer: We are neither accountants nor tax lawyers. This should in no way be construed as tax advice. Talk to your CPA or visit www.irs.gov for details.

"If you’ve been contemplating a software or hardware purchase, there is no better time than now to take action. Congress has extended IRS Section 179 to cover the 2011 tax year," according to this VAR. "This means, businesses are allowed to deduct the full purchase price of qualifying equipment (including software and hardware) purchased or financed during the tax year instead of being amortized over several years. In 2011, the amount you can write off has gone up to $500,000 (from $250,000 in 2010) and the total amount of equipment that can be purchased increased to $2 million. It’s an incentive created by the U.S. Government to encourage businesses to buy equipment and invest in themselves."

This VAR writes that "Congress decided to prolong IRS Section 179 to cover the 2011 tax year. That means eligible business equipment purchases (including most computer hardware and software) can be deducted at full cost on your 2011 business taxes, instead of being amortized over several years."

For tax year 2011, this means the equipment must be put into service between 01/01/2011 and 12/31/2011.

Section179.org seems to have up-to-date info. But the IRS has pdf's here and the instructions for form 4562 are here to claim your deduction for depreciation and amortization; make the election under section 179 to expense certain property; and provide information on the business/investment use of automobiles and other listed property.

Again check with your tax specialist, but it could be a way to make purchases AND to get prospects to buy NOW!

For example, if a prospect was to purchase $10,000 of IT equipment by December 31st and were in the 35% tax bracket, they could write off $3,500. The equipment’s net cost to them is $6,500.

Peter Radizeski is a telecommunications consultant and analyst with RAD-INFO INC. Service Providers have called on RAD-INFO INC for assistance building a channel, improving sales, managing online marketing efforts, and overall company strategy. Contact RAD-INFO INC at 813-963-5884 or http://rad-info.net

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MicroCorp Acquires Another
On Rad's Radar
Wednesday, 07 December 2011 09:39
MicroCorp-Blue.png

Master Agent MicroCorp announced yesterday another acquisition (following the purchase of 5 Star Communications in June).

Combined the Company will be the largest Telecom Agency on the East Coast.

MicroCorp will also expand its portfolio by signing a strategic partnership agreement with Premier Solutions Group, LLC to provide Technology Solutions throughout the United States.

Atlanta, GA & Lancaster, PA - December 7th 2011 - MicroCorp, Inc., the Nation's leading Telecom Master Agency, announces today the signing of a definitive agreement under which they have acquired the assets of Premier Management Group (PMG) of Lancaster Pennsylvania. PMG is a business unit of Premier Companies, LLC and provides managed telecom solutions to small, medium and enterprise sized business customers throughout the Northeast.

This strategic relationship will allow MicroCorp to expand its portfolio of services through a partnership agreement with Premier Solutions Group, LLC (PSG), thereby allowing MicroCorp to provide converged single-source-solutions to its nationwide distribution channel.

MicroCorp will retain the "Premier" brand and operate PMG as a wholly owned subsidiary that will collaborate with PSG in providing integrated and converged telecom and technology solutions. The Company will continue to operate from the Premier Office Building in Lancaster, PA, alongside the PSG team. PSG will increase its focus on application development, managed services, Cisco advanced technologies such as wireless, voice, video, data center and security, while also launching some voice cloud services through a soon-to-be announced joint venture.

The PMG and MicroCorp transaction closed on December 7th and the full integration of operations will be completed by February 1st 2012.

It's an example of the channel side consolidation. As carriers acquire cloud and managed services companies, master agencies are bulking up to migrate from a transaction only model as well.

Read more... [MicroCorp Acquires Another]
 
What's the Difference Between a Contractor and Employee?
NSP Strategist
Wednesday, 07 December 2011 07:56

Today, many companies are bringing on temporary workers, 1099's, contractors, freelancers, and other types of workers to fill projects and skills. How do you classify them and pay them? That's a job for your CPA and attorney.

The Top 10 Payroll Mistakes are here. The top three mistakes are misclassifying nonexempt employees, failing to apply the latest laws/regulations and incorrect Social Security numbers on W-2 forms.

The IRS has a page that explains: "Independent Contractor (Self-Employed) or Employee?". Employers must way 3 factors about the degree of control and independence that a worker has:

"Does the company control or have the right to control what the worker does and how the worker does his or her job?"

"Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)"

"Are there written contracts or employee type benefits? Will the relationship continue and is the work performed a key aspect of the business?"

Consider carefully - and define it clearly - the relationship with any worker.

Peter Radizeski is a telecommunications consultant and analyst with RAD-INFO INC. Service Providers have called on RAD-INFO INC for assistance building a channel, improving sales, managing online marketing efforts, and overall company strategy. Contact RAD-INFO INC at 813-963-5884 or http://rad-info.net

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MVDDS for New Mexico Internet (Maybe)
NSP Strategist
Wednesday, 07 December 2011 06:30

So this is the press release. The correction is at the bottom.

ALBUQUERQUE CHOSEN AS FIRST COMMERCIAL U.S. SITE FOR NEW BROADBAND TECHNOLOGY ROLLOUT

Albuquerque is the first U.S. city selected to receive breakthrough, Internet connection technology that promises up to 50Mbs, wireless Internet speeds at very competitive pricing.

The technology is called Multi-Channel Video and Data Distribution Service (MVDDS) and is already operating in the UAE, Ireland, France, Vietnam, Greenland and Serbia.

The technology was developed by Florida based, MDS America. Deploying the technology in New Mexico is Agave Broadband, the exclusive licensee for New Mexico.

“This partnership with MDSA will provide the latest internet, high‐speed connectivity technology to the Albuquerque market and outlying areas,” said Les Matthews, Agave Broadband Director. “This is another step in our long‐term strategy to bring affordable, high‐speed connectivity to both commercial and residential users in Albuquerque, Santa Fe, and in parts of rural New Mexico.”

MVDDS uses patented and patent-pending technology to take advantage of a licensed broadcast spectrum owned by Agave partner, MDS America.

“We’ve successfully deployed this technology in many rural parts of the world,” said Kirk Kirkpatrick, MDS America, President and CEO. “The Albuquerque market provides an excellent opportunity to deploy in a combination of rural/urban markets containing a wide variety of climatic conditions. New Mexico is just the beginning of our roll-out of MVDDS technology into the United States.”

Agave recently acquired Cibola Internet Services, who had begun the preliminary discussions with MDS America. Lou Uttaro, Cibola’s owner, who had for many years been on the forefront of bringing innovative Internet services to New Mexico, will remain involved with Agave in deploying the MVDDS technology in the state.

Agave Broadband currently provides wireless broadband internet service to the East Mountains from Edgewood to Mountainair. The partnership with MDS America will allow expansion of the company’s current service offerings to many population centers in the State of New Mexico.

Now the correction and tech specs:

"I'm not sure I would call this "NEW BROADBAND TECHNOLOGY", 20 some years ago this technology was first developed."

This technology uses the DBS (Direct Broadcast Satellite) frequencies but at a terrestrial level.

It uses spectrum (US / FCC) in the 12.2 - 12.7 Ghz range.

The technology is UNI-DIRECTIONAL, in other words its a SEND TO SUBSCRIBER ONLY technology. [ME: like the original satellite broadband service.] The Internet is a BI-DIRECTIONAL technology, needing traffic in BOTH directions.

The primary use is to deploy multi-channel VIDEO via wireless and thus circumvent existing "Cable TV" franchise rules that municipalities presently have and are required by FCC.

The technology was initially developed in the mid 1980's and was known then as HyperCable.

In 2002, the FCC decided to hold a spectrum auction (Auction 53 and 63) for the land based use of the spectrum. The Albuquerque-Santa Fe market (Market ID MVD049) was granted on 7/26/2004. It EXPIRES on 7/26/2014. There is potential for renewal, if there is substantial service. The licensee has a requirement to provide substantial service within five years of the initial authorization grant. The initial authorization grant was on 7/26/2004. Add five years and you get 7/26/2009. [ME: missed by THAT much. So how come the spectrum didn't revert back to the FCC?]

Permissible Operations: MVDDS licensees may use this spectrum for any digital fixed non-broadcast service (broadcast services are intended for reception of the general public and not on a subscribership basis) including ONE-WAY direct-to-home/office wireless service. Licensees are permitted to provide ONE-WAY video programming and data services on a non-common carrier and/or on a common carrier basis. Mobile and aeronautical services are not authorized. Two-way services may be provided by using other spectrum or media for the return or upstream path.

So the licensee can use the service for ONE-WAY service and MUST NOT provide common carrier services. This could impact "VoIP / Voice" service offerings.

To deploy this technology Agave will need to deploy a DIFFERENT technology to get the packets from the subscriber BACK TO THE INTERNET. [ME: like a telephone modem :)] This can cause significant problems in actually achieving the bandwidth claimed.

Further, MDS Operations SHALL NOT partition or lease any portion of its license within the prior approval area, including Bernalillo County, Sandoval County. There do not appear to be any FCC approval records filed.

A few technical issues:

1. The licensee is permitted a SINGLE TRANSMITTER located at Sandia Park [35° 13' 01" North Lat. - 106° 27' 08" West Long] Since MDS Operations can only have a SINGLE TRANSMITTER, then is is a SHARED bandwidth system. The more customers they put on the system the less bandwidth will be available for each user.

2. The total amount of bandwidth will also be limited by the amount of bandwidth they can reliably get to the top of Sandia Peak. I do not believe there is FIBER at Sandia Peak. So they will have to use additional wireless technologies to get up to the peak. *** For 100 customers to get the 50Mb/s they will need to have 5000 Mb/s of uplink to Sandia (That's 5 Gbps) *** Unless they oversubscribe the system.

3. There is no "redundancy" in the system. If the single FCC authorized transmitter breaks, then all subscribers are DOWN.

4. Bandwidth will be limited by the latency and reliability of the back-channel technology deployed. Same problem that Satellite based systems have. The latency won't be quite as bad, but that really depends on the back-channel medium they use.

5. I suspect there will be NAT and other network address / routing issues that will cause certain Internet based applications to break or not work very well.

6. Assume they also deploy video on this technology (Video is/was the major driver of this technology), then the aggregate bandwidth available for "Internet" will be significantly less. A single HD video stream requires around 6 to 8 Mb/s, raw. That does NOT include the overhead of IP. So a 100 channel video service all in HD would need around 600 to 800 Mb/s of Bandwidth, in addition to the bandwidth consumed by Internet applications.

END

Peter Radizeski is a telecommunications consultant and analyst with RAD-INFO INC. Service Providers have called on RAD-INFO INC for assistance building a channel, improving sales, managing online marketing efforts, and overall company strategy. Contact RAD-INFO INC at 813-963-5884 or http://rad-info.net

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Mergers Cost Jobs
On Rad's Radar
Wednesday, 07 December 2011 06:25

In the wake of AT&T getting caught misleading the federal agencies about the benefits of its merger with T-Mobile (FCC report here), we see that the merger of PAETEC and Windstream has already resulted in job losses.

Windstream cuts 58 jobs at Palm Harbor office is just the start of at least 280 jobs being cut from its combined workforce of 14,500. Synergies require job cuts. Richmond is losing 70. Even Rochester is losing 52 jobs, according to 13 WHAM TV.

Mergers can't work without job losses, office closings, and other economic detriment. It is what it is, but don't put lipstick on it and try to sell the pig as a boon to anyone but your shareholders. And I think that means short term shareholders, because mounting debt combined with flat markets and more competition in a climate of stagnate job growth means the long term picture is worse than the pig.

lipstick_pig_080910_mn.jpg

Now the ILEC mouthpieces are writing about how unfair the FCC report was. Really? Because the FCC staff had 2 million pages of documents from AT&T and T-Mobile to sift through, including the "smoking gun memo" that said AT&T didn't need to buy T-Mobile, it could spend one-tenth the $39B price tag to build out the network itself. AT&T also admitted to Congress that it mismanaged its network. They all have spectrum. Or be like VZW and buy it from Leap and SpectrumCo - or LightSquared or DISH et al.

And let's not forget one big thing: both cellcos have lousy customer service records. That HARMS consumers. The FTC, DOJ and FCC were established to protect CONSUMERS, not other companies (Sprint) or shareholders. We have very little (real) competition in telecom.

Final thought: Most mergers fail!

It isn't about bigger. It's about Better. Zappos grew to a $1B with great culture and customer service. Say that about a telco.

It isn't about bigger. Ask Intermedia (ICI, the first billion dollar CLEC that had to sell to MCI) or PAETEC (the company that Arunas Chesonis said needed to be a billion dollar company. For what?). It's about Innovation. Ask a company in the Duopoly about Innovation.

Read more... [Mergers Cost Jobs]
 
Sprint Deals With Clearwire
On Rad's Radar
Monday, 05 December 2011 11:50

The best details of the Sprint-Clearwire deal is at Marketwatch, but Tammy Wolf at TMC did a good job, too. Clearwire gets "up to $1.6 billion over the next four years in payments for WiMAX services, possible pre-payments for LTE services and potential equity investments" from Sprint. "Sprint will pay Clearwire a total of $926 million, approximately two-thirds of which will be paid in 2012, for unlimited 4G WiMAX retail services during 2012 and 2013, subject to certain conditions." So Clearwire is stuck with WiMAX until like 2015 while also building an LTE network. The speculation begins: is $1.6B enough for Clearwire? Who will buy the bundle (Sprint-Clearwire)? The Senate wants to know more about Lightsquared. DISH wants someone to build it an LTE network. VZW picked up the SpectrumCo 20 MHz from the cablecos. The cablecos will now be selling VZW services to its customers as an authorized VZW sales agent. (Isn't that stupid?)

Read more... [Sprint Deals With Clearwire]
 
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