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Cynthia de Lorenzi, CEO, Patriot Computer Group
Predictions 7 Months Later
On Rad's Radar
Tuesday, 27 July 2010 17:54
Back in December, I made some predictions in an interview with Rich Tehrani. One of them was about HD Voice. We added another Alliance slash Peering Group, but still not enough density yet for HD. I'm thinking maybe in 2012.  (BTW, I still get asked how to do Fax over IP and TDM is still the answer for any volume of outbound faxing. Heck, we have SIP to SIP calls breaking down.)

Smartphones: can you say DROID!

RT: What's the most innovative product that's going to hit the market in 2010, from a company other than your own?
 
PR: Someone is going to figure out how to put UC in a simple GUI similar to SUTUS's box.

Well, Ringio has done a pretty good job of this and SUTUS is adding hooks and apps to its new box, too. So UC is getting simpler for the small business owner.

 
Read more... [Predictions 7 Months Later]
 
Another LTE Player?
On Rad's Radar
Tuesday, 27 July 2010 12:34
No, not Sprint, although according to the media, Sprint is thinking about deploying LTE. I'm talking about Lightsquared.

This new LTE venture promises 100,000 jobs and a 4G network that will reach 92% of the populace. Lightsquared is a consortium based on Harbinger Capital Partners acquisition of SkyTerra Communications. "SkyTerra will provide the spectrum for this venture. Nokia Siemens will design the network, install equipment, and manage the operation, which consists of about 40,000 cellular base stations." [source]

How does a new player enter the market, a market that Sprint and T-Mobile can barely compete in? A market so flat that VZW had more wholesale (pre-paid through Walmart and Tracfone) adds than retail (contacted). A market that cable is going to start penetrating which is why VZW started wholesaling. And how do they get cool handsets? That's the biggest issue facing any MVNO or Wholesale Cellular customer. 

I just don't see it. I understand that wholesale cellular is an untapped market, but the MVNO model is challenging to say the least.
Read more... [Another LTE Player?]
 
Losses All The Way Around
On Rad's Radar
Tuesday, 27 July 2010 11:55
What a terrible quarter. 

The FCC is playing around with Broadband - plans, definitions and classifications. The NTIA took the summer off from its task on the broadband stimulus. 

Meanwhile, VZ releases its quarterly numbers as a loss due to pension payments and layoffs. It is planning more layoffs, because it has to cut head count in its wireline business to reflect the declining revenue. The spin was that VZW was counter-balancing any revenue losses, but with wholesale (pre-paid) cellular subs, not direct, contract ones. Less profit. Less ARPU. 

The one thing (I repeat often) is that most of these markets are flat - cellular, TV, consumer broadband, consumer voice, wholesale voice. It's a zero sum, take-away game. That is expensive.

"The race to the bottom makes sense when you consider two other numbers: Despite improved enterprise sales and better FiOS penetration, both global enterprise revenues and mass market revenues were essentially flat. On the global enterprise side, declining wholesale revenues were at fault while on the mass-market side, access lines continue to decline." [source]

The good news is that the Duopoly has gotten into a price war. VZ reports healthy ARPU of $145 per FiOS customer and $81 for others. Because customer acquisition costs are so high - advertising, direct mail, special offers, installations, equipment, discounts, referral fees - the Duopoly has not lowered its MRC. 

I don't know the impact that Satellite TV (DirecTV and DISH) are having because in some cases the TV part of the ILEC bundle is one of these two.

Level3 didn't have a great quarter either. Year-to-year quarterly revenue fell to $908 million from $942 million. 

I don't know how that isn't expected across the board in telecom. Prices are dropping every where. Qwest is cutting local loop costs in some markets. AT&T is dropping MIS rates. Cogent is giving away ... oh, never mind, they always do that. 

Thnk about it this way: Many business customers are in three year deals. So customers coming out of contract now were signed up in 2007 when pricing was (my best guess) 20% higher. Today, you almost get 10MB of IP for what a T1 cost in 2000. There are markets where 10MB is $800 including loop. 

Meanwhile, we have the SIP trunking situation, whereby every carrier is offering SIP Trunks as a low cost replacement for one or more PRI's. The total telecom spend is shrinking.
Read more... [Losses All The Way Around]
 
ReClassify the FCC
On Rad's Radar
Monday, 26 July 2010 20:08

You have thousands calling for reclassification of broadband service by the FCC. In other words, let's regulate broadband. As if that will help. More government red tape. Regulation didn't get CLEC's to develop a viable model in 14 years, so what will change with more regulation?

Dave Rusin, CEO at AFS, sold his company to Zayo, I think, to spend more time blogging about changes needed to both the FCC and CLEC strategy. (Hey, Dave, can you start with your Rochester pal?)

Rusin has a couple of gems in this post, but the problem is that the government is stuck. The NTIA hasn't gotten past Phase 1 in stimulus apps yet. WTH? Why?

I didn't really think that the Wireline Bureau would have said, "Job Done, Let's Close Up" - but really what do they have left to do? The ILEC's are all but unregulated. The cablecos as well. (Except for required paperwork and reporting to keep the FCC employees busy for 18 months before they can issue a report.) Cellular has little regulation. The FCC is all about spectrum now. The FCC doesn't tackle real issues like Inter-Carrier Compensation or Spoofing CallerID or CPNI actually.  It's all about looking busy. How about saving the taxpayers some money and shut the lights off. That way you can all go get a cushy job in the private sector that you "regulated".
Read more... [ReClassify the FCC]
 
How Does This Keep Happening?
On Rad's Radar
Monday, 26 July 2010 10:39
How does someone get yet another VP of Sales after that person did such a less than mediocre job as VP of S&M at another VoIP Provider? Bouncing from place to place with no more than 2 years in any one company. Huh?!
Read more... [How Does This Keep Happening?]
 
FCC Report of Obviousness
On Rad's Radar
Friday, 23 July 2010 07:17

The FCC released the Sixth Broadband Deployment Report. Due to the FCC changing the definition of broadband from the decade old standard of 200 Kbps downstream, most DSL won't count as Broadband since the FCC now defines broadband as 4 Mbps downstream and 1 Mbps upstream. In accordance with that, you would expect the report to state that hundreds of millions of Americans cannot get broadband, but  "The report, based on data provided by service providers for December 2008, found that between 14 million and 24 million U.S. residents (which is about 4.5% to 8% of the U.S. population) cannot get broadband where they live." [source]  That's less than I expected.

Cable, FTTH, FiOS and U-Verse may deliver the requisite speeds to be defined as broadband. However all the 3MB and 1.5MB DSL out there is now discounted.  

"The FCC concludes that "Broadband is not being deployed to all Americans in a timely and orderly fashion."

No kidding. But when the NTIA takes 18 months to issue just the Phase I winners, what do you expect? When you announce $7B up for grabs and it can't be used for current projects -- all projects halt.  Then Congress sees that the money wasn't spent and takes some of it. Really smart.

"The National Broadband plan model and Form 477 data show that 14 million Americans in 7 million housing units cannot get the 4 Mbps/1 Mbps broadband service. Based on the Form 477 subscribership data, 1,024 counties out of the 3,230 in the United States are counted as un-served areas--where less than 1% of households have subscribed to broadband services." [source]

"As a consequence of this conclusion, section 706 of the 1996 Telecommunications Act mandates the FCC to "take immediate action to accelerate deployment of [advanced telecommunications] capability by removing barriers to infrastructure investment and promoting competition in the telecommunications market". This gives the commission a mandate to implement proposals for commission actions that form the national broadband plan." [source]

So manipulating the 477 data with the new definition gives the FCC the mandate to make some moves, which is certainly making the ILEC's mad.

REMINDER: FCC form 477 due Aug. 2 (see here).
Read more... [FCC Report of Obviousness]
 
CPNI Training
On Rad's Radar
Wednesday, 21 July 2010 08:14

CPNI Training is an FCC requirement. AT&T stuffs this training down the throats of its agents annually. And when their is a computer glitch, twice a year.

While it is strictly applied to agents, internally CPNI is a joke for an ILEC. How else can they know that a customer has DSL with a wholesale ISP? Or that a contract with a wholesale client will expire soon? These are just some of the examples of CPNI infringement over the last couple of years.

I can't tell you how many times this has happened:

ILEC tech is at the customer premise to repair a CLEC or ISP transport service (DSL, frame, T1, Metro E) and tells the customer that they wouldn't have this problem if they went with the ILEC directly! Hello?! That's in violation -- and it almost admits that the ILEC messes with its wholesale customers.
Read more... [CPNI Training]
 
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