Sustaining Power — Metro Fiber
August 12, 2008
It’s about one hour before the tw telecom analyst call, and I can’t wait. Larissa Herda (tw telecom CEO) and friends have hit a home run at a time others are pointing at the “soft” economy as an excuse for not performing. tw telecom’s results and especially margin growth are consistent with owning and operating from your own local fiber optic platform.
If you have read this blog before, I openly admit I am a metropolitan fiber optic bigot. No shame in that. I came out of the telephone closet on this years ago.
tw telecom has done what few of us had set out to do. They have executed a long term strategy to sustain their business. That strategy, pooped on quite often by Wall Street over the years, was to build, own and operate their own metropolitan fiber optic infrastructure. And much to holding steady to this strategy, the proverbial rooster is coming home to roost while others not fiber-fortunate get squeezed by falling prices, Ma Bell renting costs and copper capacity being outstripped by physics for optical connectivity demand applications.
Besides the control you get over your costs and the unlimited bandwidth of optical access which are apparent in tw telecom’s results, you also get a certain level of regulatory immunity. This is true because the fiber is a by-pass mechanism of Ma Bell’s copper loops and special access end of life legacy network — pieces that others think they must buy!
(Sometime I will write about why I think Ma Bell’s pieces and parts are like having a drug addiction with said addiction locked in by the sole supplier.)
What most of us don’t understand, which gives tw telecom and others likely situated an even greater advantage, is that without a fiber platform you will always be disadvantaged. Customers churn when things don’t work. Customers churn when their experience sucks. Customers churn when inadequate bandwidth is available for a content rich experience (i.e., applications).
Contrary to telecom culture, customers don’t wake up in the morning telecom centric and believe that their life revolves around their provider of connectivity. Yes, as hard as it may be to believe, all the customer wants and needs is a robust, reliable rich experience. They really don’t care about our telecom acronyms either!
Being the metropolitan fiber network bigot that I am, today it’s not about the applications. In the near term, perhaps the next five years, it will be about bandwidth growth outstripping copper, bandwidth reliability and a bandwidth-based robust user experience. In my simple mind, you can have all the gee-whiz applications you want, but if they are not “bandwidth experience” supported and reliable, you might as well as sell pong as an application. (Pong – a primitive TV ping pong game back in the 1970’s which required minimal bandwidth but at its time was the best user experience).
I believe the tw telecom results and some recent inklings from Level 3 are reflecting the beginning a fundamental separation point based on demand from those that rent pieces and parts calling copper a “broadband network” from those that actually can deliver bandwidth over an owner operated local fiber optic facility.
With 90%++ office buildings still being served by one provider – Ma Bell – the bandwidth connectivity upside remains significant. However, such enormous opportunity can only be addressed by a card carrying, network owning, metropolitan fiber optic bigot(s). Don’t put applications ahead of the cart; it’s all about local fiber network location, location, connectivity…
tw telecom’s phenomenal results are solid indications that a new era of bandwidth intensity is just beginning. Those having a tummy ache over the economy … get a dose of fiber in your system and see what happens.
Remember – a clear conscience is the softest pillow.
Written by Dave Rusin - Telecom Executive
Posted by admin | Filed Under American telecom, Telecom news, Telecommunications companies, Telecommunications industry, Trends + telecommunications, Trends in telecommunications
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