The INCOMPAS Mission

INCOMPAS still has a mission in DC. At the east coast show in Washington, FCC Chairman Wheeler came to talk to the association and its members with a message that we still need Competition.

He says that as Charter is set to eat two cablecos to become almost as large as Comcast. After AT&T just bought DirecTV. After Level3 and Zayo have gobbled up most of the smaller players – and as Verizon is buying XO. Competition you say?!

AT&T, Verizon and Qwest had $235 billion in revenues at the end of 2008, up from $73.3 billion in 1984, when AT&T was broken up. As I have written before, all of the other carriers’ combined revenue doesn’t match a quarter of revenue for Ma and Pa Bell. Comcast is only one-third the size of either carrier.

If you talk consumer competition in broadband, well, the FCC’s Broadband Report says, “approximately 19 million Americans–6 percent of the population–still lack access to fixed broadband service at threshold speeds. In rural areas, nearly one-fourth of the population –14.5 million people–lack access to this service. In tribal areas, nearly one-third of the population lacks access. Even in areas where broadband is available, approximately 100 million Americans still do not subscribe.” Even “8 percent of urban Americans lack access to 25 Mbps/3 Mbps broadband.” And that is without talking about the price per MB of broadband or caps.

FYI… Cable television companies provided Internet access to 43 percent of households, although it was available to 88 percent of the population….DSL from telcos is available to about 89 percent of the population in 2013, according to Dept. of Commerce report.

In the B2B side, cable is winning this war. Comcast’s CLEC business is approaching $6 Billion (since just 2006). That dwarfs almost all of the competition except Level3, WIND and C-Link. Zayo only pulls in $1.2B in annual revenue. XO and EarthLink are around $1B.

Google Fiber has about 110K subscribers! So the competition makes a lot of noise, but isn’t winning the hearts and minds of customers.

The Special Access pricing docket is still alive and well. The real problem here is that cable and telco are regulated differently – and cable doesn’t have to wholesale. Also, the definition of wholesale needs to be explained, because wholesale pricing – like volume pricing – is lower than retail in every instance but telco.

After at least $1 Trillion in spending via BTOP, BIP, CAF, CAF II, USF, RUS and private investment, there still is fiber to every neighborhood. Best estimate on lit buildings is 50% have fiber. The other 50% are still on copper, which is fine if they are within 7000 feet of a CO or have clear line of site to a tower.

One problem is that the few larger CLECs, while visible via PR, do not make their voice heard at the FCC. The voice for lobbying is done by associations like Incompas, CCA, CTIA, NTCA, WISPA and NCTC — all up against USTelecom – and all with almost competing agendas.

Healthy competition is important for the Channel because without it, we may be squeezed out of a job.

The USTelecom and the Top 10 ISPs hold big sway in DC and at state capitols. They win big battles. They can sway legislation – and they have deep pockets to sue the FCC every chance they get. The rest of the pack: notsomuch.

How do you win?

Let’s look at the first game of the NHL Stanley Cup playoffs last night. They were calling a lot of penalties last night – 18 of them. Plus the cheap shots and the fights. The Lightning won? How? By scoring. Focus on winning. Protect yourself but have a plan, execute the play and go score some goals. Same for the Competition.

You can whine to the refs (the FCC). You can hope for penalties to be called so you have your competitor short handed, but even short-handed, you still have to score a goal.

Most people go to a show to meet customers, to make deals. More of that. Want to help your members? Bring in more prospects and customers.

We need competition. We need the smaller providers to be financially healthy. We all need to be closing business.

SIDE NOTE:

One problem the telcos have is mentality. CLECs are used to resale, not owning or operating anything.They sell on price not value or brand. The ILECs can’t comprehend competition. They think — but I am the ILEC!!!!! It make it difficult to shift away from network to sell cloud or managed services. And we have examples of how tough it can be.

The other mental issue is nostalgia. So many are hung up on how much better it was from 1995-2003. No kidding! But get over it and realize those days are gone, learn some lessons from then and apply them to today as you get back to the hustle!

Tags: clec, competition, comptel, FCC, incompas, strategy
Related tags: percent population, areas nearly, available percent, approximately million, million americans, competition