Verizon and AT&T hate to be reminded that they are the remaining RBOCs, monopoly ILECs. They are monopolies on two levels – cellular and wireline. About 80% of the US is covered by these two, despite their being numerous other rural LECs, HT and 4 non-Bell giants – Windstream, CenturyLink, Frontier and Fairpoint. Of coourse, 3 of those – Hawaii Telecom, Fairpoint and Frontier – consist of former Verizon assets.

The RBOCs would like to be unregulated. Despite the fact that they are where they are today exactly due to the regulations that they say choke them. Yeah, choke them. Have you seen their financials?

VZ: “Total operating revenues in third-quarter 2013 were $30.3 billion, a 4.4 percent increase compared with third-quarter 2012. Cash flow from operating activities totaled $28.4 billion in the first nine months of 2013, a 14.7 percent increase.”

ATT: “Consolidated revenues of $32.2 billion, up 2.2 percent versus the year-earlier period; More than 2 million new wireless and wireline high speed broadband connections. Wireline consumer revenue growth of 2.4 percent versus the year-earlier period. First billion-dollar U-verse revenue month.” NOTE: billion $$ MONTH!

Meanwhile, at C-Link (which is a roll up of CTel, Sprint, Embarq, Qwest and Savvis) – “Achieved operating revenues of $4.52 billion, including core revenues of $4.10 billion. Added 33,000 broadband and nearly 17,000 Prism TV customers during third quarter.” [clink]

In the case of VZ, it would like to shed everything but VZW, Terremark and FiOS. The current CEO came from VZW, not VZB or VT. VZW is the land of no unions, no pension liability, no regs. Now VZ announced a re-org but when you have about 100,000 employees how does that change an ingrained culture of unions, bias, monopolistic mindset, and cubiclism? These are non-innovative mental and physical states.

So what do you do? Try to trick regulators as often as possible — and buy the legislation that you need to move to unregulated.

What was the trick? Post Storm Sandy, VZ tried to replace copper with fixed LTE. NY State authorities called them on that BS and demanded that VZ replace the copper as the ILEC and carrier of last resort is required to do. “Now VZ is doing their best to not share what the costs were.. naturally, because they had given extremely high estimates to justify not doing it in the first place.” Other than looking like stupid liars, they will pay a small penalty and do whatever they want. ATT and VZ paid more in lobbying than they did in taxes!!!! In fact, “Verizon received over $12 billion in government subsidies, money which helped fund the $52 million it paid for lobbying during that time.” Nice huh?

For AT&T, it’s all about revenue growth. They have hit a ceiling (kind of). As one of the largest telcos in the WORLD, their revenue at this point can only slow down. Stymied from buying T-Mobile and expanding into Europe, they are stuck with organic growth which isn’t fun for them.

Broadband is the new utility. The FCC wants it everywhere. Google jumped into the fray with its Gigabit FTTH project more to make noise and push the Duopoly to step than to be an actual SP. Our economy turns on the heels of our Internet — not just shopping, but learning, entertainment and jobs! And broadband in most of the US is on Copper. Windstream, C-Link, Frontier, HT and Fairpoint don’t mind. Some rural ILECs are getting loans or funding to roll out FTTx projects. Ethernet to businesses in most cities is over copper. Windstream gets 72% of its revenue from broadband! The RBOCs don’t like that idea at all.

ASIDE::: C-Link just raised the price of its stand-alone DSL product by $2 per month. Not sure the RBOCs even offer naked dsl any more. “One CenturyLink subscriber in Broadband DSL Reports’ user forum said that the combination of the latest $2 increase and the $1 increase that the telco implemented in June means the total price of his service jumped to $72.99 a month,” wrote DSLR.

Meanwhile, in Austin, ATT is offering gigabit service for $70 IF you let it spy on your searches! It will do that anyway and send a copy to the NSA for free, so you might as well take their offer.)

And we aren’t done yet. In most states, DSL and business POTS service is unregualted. In some states, almost all telecom services are deregulated. Now AT&T is pushing a bill through Michigan that will reform telecom, landlines and inter-carrier comp. Fun stuff.

According to Paul Timmons, “What AT&T wants to eliminate is something very specific:”

Telephone service that is:

• Regulated for price and quality,
• Offered on nondiscriminatory, consistent and identical terms to everyone in their service area,
• Is delivered on copper pair,
• Has dialtone even with no equipment attached inside the customer premises

This comes on the heels of the Special Access Price changes. “See CLECAM13-099 as an example of the changes they’re making to eliminate DS1/DS3/OC-3/OC-12/OC-48/OC-192 service around the same time by removing the ability to sign contracts that go past this target date.”

Consumers, CLECs, ISPs, cellcos, and others need to pay attention because Comcast-VZ-ATT are carving up the country!

What happens when there is no Carrier of Last Resort? When you want phone service to your new building, you will have to pay to have it brought to your building. This will not be cheap. New residential sub-division will have to pay as well. A storm knocked out Internet and phone lines?? Too bad. We’ll fix it when we fix it. Screw you! Plus your cellcos – Sprint, T-Mobile, C Spire – are out of luck. Copper to towers have to be replaced with fiber, with construction costs and higher rates. Fun times to mess up the only two things – cell and broadband – keeping the economy spinning.

Windstream CEO Jeff Gardner presented at the Bank of America Merrill Lynch 2013 Leveraged Finance Conference Monday. It’s a pitch to sell debt, prove stock value, blah blah. Oh, the things that CEO’s of public companies have to do. Dance, you monkey, dance. Anyhow…

Gardner talks about the ARPU increase in broadband, explaining that folks are choosing higher speeds. I thought it was a rate increase. Also, some of the ARPU increase is due to cross-selling items like anti-virus protection.

72% is a significant number. WIND broadband penetration is 72% – which is high. 72% of revenue comes from broadband, which is crazy when you consider that they sell lots of T1’s as well.

Due to CAF funds, WIND will be building out to new rural areas where they will be the sole broadband provider (in theory, although they will face competition from satellite and some WISPs). The take rate for broadband in these CAF areas should be 72% or higher as well. However, “Gardner noted that areas where construction will be funded through the CAF program have an average of eight access lines per square mile, compared with 19 lines per square mile in the company’s overall business.” That is Rural!

The preso is here in PDF.

The new chairman of the FCC, Tom Wheeler, wrote an ebook about what he thinks about networks. It is called Net Effects: The Past, Present & Future Impact of Our Networks – History, Challenges and Opportunities (and is available as a pdf, on Amazon and at Scribd). See more here.

“What is clear about our network revolution, however, is that the new information networks are the new economy.” I just wrote a blog post for Blouin about our economy consisting of a macro-economy that is a service economy and a micro-economy that is the Internet or Creative Economy. Knowledge workers are leveraging the Internet to build a bright future (in theory).

The other big news is that the House is calling for a re-write of the Telecom Act. “They envision a multi-year effort that will start next year with a series of hearings and white papers next year.” The last re-write in 1996, took years and much compromise to make a mediocre bill that spawned millionaires while siphoning trillions into bad debt. I can see a repeat coming because we don’t learn from mistakes, these idiots in Congress are too stupid to understand the Internet (and its effect on the economy), these same critters in Congress don’t grasp compromise either, and they are all bought and paid for.

More about the telecom act re-haul.

TechRepublic writes, “When Edward Snowden leaked 200,000 classified documents that uncovered the NSA’s digital surveillance programs, it rocked the IT world. We break down the three biggest impacts.”

The biggest impact is that international organizations are not buying from US based cloud companies, which will have a chilling effect on growth, jobs, and more in years to come. Yet US enterprises are re-considering cloud services as well.

It’s amazing to me that more people are mad at Snowden than to the US government for doing this. And don’t forget that we knew that they were doing something like this back in 2006, when Klein revealed that the NSA was tapping the AT&T’s Internet feed in room 641A.

5 takeaways from the surveillance disclosures.

I talk about targeted marketing a lot. Many people argue with me. They are wrong. Not everyone is my customer. Not everyone is your customer. If 40% of the marketplace shop on price and you aren’t the cheapest, not everyone will buy from you. Also, if you don’t have a clear value proposition, most people will go with the cheapest. I could go on and on. Like if you don’t have fiber or tower or a collocated CO or can’t port their number, they are not a prospect.

Seth Godin writes about the NY Times classified ads, how they are just one page, and how most of the ads are useless. It’s a less in target marketing as well as a lesson in recruiting talent.

In recruiting talent, expend your resources looking where your best candidates will be. Where have you found great talent before? Another place: ask your current employees. It will help retain the culture.