God Talks to Rusin
January 29, 2009
In lieu of recent events, we must interrupt the current series of posts on Infrastructure to run the following important message. The current series will resume next week.
While attending a telecommunications conference recently, God spoke with me.
Yes–the Big Guy. The One and Only. God.
Now, God speaks with me frequently–it’s just a matter of me paying attention. Often, I miss the message. But, this time, I’m glad I was listening closely, because He told me I am on a path of great success.
As anyone would be, I was relieved to hear this. God seems happy with me so far, and I hope I live long enough to see my work to fruition.
This was a timely message from God, because I recently returned from the 8th Annual Metro Connectivity and Local Access Conference in Miami.
First, let me share my detailed thoughts on the conference: The folks from Capacity Magazine, along with a few other, organize the show every year. You can check out their website for future shows at www.capacitymedia.com.
The MetroConnect Show is unlike any other Telecom conference you will ever attend. The folks at Capacity Magazine make this event rich in networking, learning, knowledge sharing, and relationship building. They don’t invite panelists to speak unless the speaker agrees to participate, to share knowledge and ideas, and to provide audience members with golden nuggets of information.
MetroConnect is not about boring, big brand CEO’s standing up and airing a commercial for their company (should something like that happen, that panelist would not be invited back). They bring in executives from various segments of Telecom, with annual sales between $10mm to $250mm, who open themselves up to the audience and share nuances of success not found at any other exhibition. They share street-smarts, insight, and tactical innovations; you’ll hear what works, what doesn’t, what’s being sold, and the truth about demand.
For the most part, Executives attending Metro Connect are fairly well grounded, with no traces of condescension to others. We share the common bond of competition and desire to beat the ILECs, instead of competing with each other. This is the MetroConnect culture.
There is a strong mutual respect for each others business which is awesome. No pretenses, no arrogance … just a value experience.
In short, it’s a great conference, and here are some of my personal highlights:
1. Most of the companies presenting and attending are doing well. We are doing well, at AFS. We are not unique in this regard based upon the attendees and results reported.
2. My take away is that successful companies in our industry are experiencing a bar bell affect. On one end of the barbell are tightly disciplined companies that are doing well–with common 2008 growth rates ranging from 40% to 100%. On the other end of the bar bell are the dumb bells (pardon the pun)–the ILEC’s and cable companies, who are also doing relatively well. Lesson learned: being out in the middle of the bell bar right know is not a good place to be!
3. It was nice seeing Danny Bottoms back in action as President of Cavalier. That consumer business is going to drive Danny nuts – you heard it hear first.
4. There was an excellent data center panel with plenty of good insights, statistics, and disclosure. I came away understanding that Data Center owners are working strategically with Metro Networks in order to succeed and they clearly understand the necessity of win-win relationships in serving customers. Hunter Newby moderated this panel in a probing style akin only to him. Hunter’s stealth company, Allied Fiber, is already operational with employees … definitely on the success track.
5. I participated on a panel that addressed the Business Case for investment in infrastructure. Infrastructure meaning fiber–real networks for real players. I was also pleased that our panel had two women holding Executive positions participate – Carmen Perez of FPL, and Colleen Gallagher of First Telecom Services. You go girls!!! I thought one of the funniest moments of the day came from panelists Ron Johnson of Knology – in speaking about building out fiber – as he said, “Build it and they will come … and take your office furniture.” My friend, and newly ordained (by myself) Choir Boy, Andy Lipman of Bingham McCutchen, moderated the panel.
6. I had the opportunity to moderate a panel on Wireless Backhaul Business Models. It was a very open panel discussing everything from what works, what doesn’t, costs and models. It was the last session on the last day … so we all worked hard to make it interesting.
I have watched the quality and participation of MetroConnect increase year after year. There is nothing like it anywhere. It’s a knowledge-sharing experience. You are in a closed setting with real hands-on CEO’s and executives making businesses grow, work and succeed. The financial discipline and focus is self-evident — something other industries could learn from. You get direct networking access to one another by breaks that are designed to promote this interaction alongside special events. Face time at these events is quality face time.
If you read this blog regularly and are a CIO, CTO, or a significant player in a large IT Enterprise setting, you should attend MetroConnect. The insights and information will be invaluable to you in understanding the Telecom guy sitting across the table from you. You will also gain an appreciation for tricks of the trade, what separates the real players from the pretenders, and how things really work! I highly recommend it.
To the large Private Equity firms that read this blog: I suggest you attend MetroConnect to listen – we already know your are really smart guys and have money!! What you will hear and see are highly disciplined businesses that operate so efficiently, it may just change your mind about hiring Celebrity CEO’s, who could spend your money and go bankrupt. You know the Chapter 22 CEO’s that can’t help but spend money? It’s their primary skill, and they’re really good at it. If you are looking for historical CEO retreads that piss through cash, you will not find them at MetroConnect. There is a lot of talent running these companies that attend MetroConnect–really good, proven talent that grows business organically, and even prospers in the worse of economic conditions. Given the small funding sizes of MetroConnect companies, you will be amazed at what can be done with so little. Funding these CEO’s will get you more for your money. Take a chance! We don’t care about fancy offices, private jets and toga parties …. just results.
So what does all this have to do with God speaking to Dave Rusin?
Yes–back to that. God did talk to me.
He called on the phone last evening and spoke in the voice of my my thirteen year old daughter, Leah, an eight-grader at Our Lady of Mercy High School.
Once a month, the school faculty and administration that run this all-girl parochial school meet and choose one student, out of 1300+, who exemplifies a particular character trait. This month’s character trait was Trust.
Leah’s wasn’t expecting it, but there she was, sitting in her seat at the assembly, when her name was called. My daughter was recognized as the “Most Trustworthy Student” in her entire school.
I wanted to jump through the phone to hug her! (Maybe a killer video app!!)
My wife, Lori, and I couldn’t be more proud.
And I do believe this is God’s way of telling us we are on the road to pre-mortality life success. I happen to believe that success in life is defined by quality and character of your children as they grow and become adults. And when we leave this earth, the character of Leah’s and our grandchildren as human beings, is how we will be judged.
Success defined by materialism, control, ownership and wealth (at what cost), are nice measures in worldly economic terms, but they are not the ultimate measure at your day of judgment. Earthly ownership means nothing, as God really owns everything on earth and we are only stewards of all that God owns on earth. if you have been a bad steward, that’s just something else to account for.
“Most Trustworthy Student” — age thirteen — God is telling me I am on a successful path with my life so far…
A Brief Vocabulary Lesson for the “Real Smart Guys”
January 28, 2009
I have been reading about the lobbying efforts of the “real smart guys” in Telecom, and their ideas on how and where “infrastructure” money should be spent for greater broadband deployment. Once again, it’s the usual suspects lobbying for the cash machines in rural America, municipalities who should not be in the telecom business, using children’s education and welfare as an excuse.
I will give you my thoughts on these Mensa-like ideas in a week or two. I struggle with their lack of reality, commonsense, and forked-tongued speech.
America–you have been lied to about network infrastructure.
Working from the physical definition of infrastructure, did you know that any “carrier” can claim they have X thousands of fiber route miles while owning only 2-strands of fiber? That’s right–2 strands. Some “carriers” claim they have a network, yet own zero optical fiber.
A brief vocabulary lesson …
Fiber Route Miles: Fiber Route Miles are measured by the cable sheath. A cable sheath can have as few as 12 fiber strands, and as many as 1024 fiber strands inside it. If you own 2 strands of fiber inside a sheath, you really own zero fiber route miles. The owner of the cable sheath is the party that owns the route miles. I’ll get to why this is important…
Fiber miles: Fiber Miles are measured by taking the number of strands in a cable sheath of fiber and multiplying that number by the route distance of the cable sheath. For example, a cable sheath having 10 fiber route miles, but 144 strands in the sheath, equates to 1,400 fiber miles. The owner of the cable sheath owns 1,440 fiber miles. I’ll get to why this is important…
Owner of the cable: This is the entity that actually installed or acquired the entire cable sheath and has title to the infrastructure. Some owners let others rent or lease fiber strands within the cable sheath, which is affectionately known as an Indefeasible Right of Use or IRU. Some owners do not let others rent or lease fiber strands, which is called closed network. The owner of the cable sheath controls things. Like it or not, this is the reality.
Read, review, and check back on Friday to see why all of this is important…
Today’s Buzz Words: Infrastructure and Bandwidth
January 26, 2009
Infrastructure.
It seems to be the big buzz word around the beltway. Many hands are extended looking for our tax dollars to “build” infrastructure. Even a whisper of telecom infrastructure is in the air.
So what, exactly, is it? When is a network really a network?
Before the beltway elite start handing out our money for telecom infrastructure, let’s get on firm footing. Outside of rural America, we still need to install lots of fiber in all sorts of markets other than of big top-tier cities and the beltway. Forget about calling a technology box or software “infrastructure”–-these are all nice, but useless until we have the physical means of bandwidth connectivity/transport in the ground, on a pole, or on a tower. Until then, bailout…I mean “infrastructure investment”…for box companies and software is unwarranted. Do not put the cart before the horse.
Real bandwidth is not this garbage we have now as measured by the feel good FCC. No one is willing to say that our Broadband Emperor has no clothes…but I will.
Sorry, America, but copper facilities and wireless are not cutting it if we are really serious about bandwidth connectivity. Before “broadband” everything else had a data speed rate, or it was called “narrow band”. There is nothing broad about copper facilities. It’s time for America to come out of denial and stop holding onto things like archaic 100 year old copper plants.
On Wednesday, we’ll have a brief vocabulary lesson for the “really smart guys” on Wall Street…
Gotham News Looks Under the Manhole Covers
January 23, 2009
I am not piking on Verizon or the Union but facts are facts – copper is not a broadband medium, it is not reliable. The arguments in the article below are age-old between ILEC management and Unions. Why any serious business would want to rely on copper infrastructure is beyond me.
Below is just a little peek under the covers at any ILEC. Those of you out there reading this BLOG in Outside Plant – just chime in to these two words — “tan wire.”
Love & Kisses,
Dave Rusin
America’s Favorite Fiber Bigot
Verizon crosses wires with critics
BY NICHOLAS HIRSHON
DAILY NEWS STAFF WRITER
Verizon is pushing its aging copper telephone lines to limp along with quick fixes – often leading to outages – until its heralded FiOS fiber-optic network becomes available citywide in 2014, critics and company insiders charge.
A spokesman for the telecommunications giant insisted that copper remains “the backbone of our business,” and denied the allegations of neglect.
But union officials said that Verizon foremen regularly instruct workers in the field to splice faulty copper lines instead of replacing them – cutting costs but sacrificing quality.
The patched-up lines often go out of service just days later due to rain, snow or heavy winds – creating headaches for customers – but Verizon keeps instructing workers to splice instead of replace, union leaders said.
“They ought to be providing the best possible service for the people who are still on the copper,” said Joe Connolly, president of Communication Workers of America Local 1101, which covers Verizon workers in the Bronx and Manhattan.
FiOS was launched in parts of the city last year and continues to expand, but won’t cover all the boroughs until 2014, said Verizon spokesman John Bonomo. He said Verizon stands by its product.
“I’m not sure why or how we wouldn’t pay attention to our core network,” Bonomo said. “That can’t be further from the truth, and I can’t stress that enough.”
Union heads who represent Verizon technicians in Queens and Long Island shared similar tales of the company neglecting copper as it holds out for FiOS.
“Obviously, the customer isn’t getting the service they’re paying for,” said Tony Caudullo of CWA Local 1106, which covers Verizon workers in Queens.
Bob Morrow, president of CWA Local 1108 in Suffolk County, scolded Verizon for its apparent repair philosophy that forces technicians to revisit problem areas again and again.
“We don’t have the time to do it right. [But] we have the time to go back,” Morrow said.
Anne Dalton, spokeswoman for the state Public Service Commission, which regulates Verizon, said the company improved service recently, but must “balance its legacy network” of copper lines with the long-term benefits of FiOS.
Chris Keeley, associate director of the New York chapter of the citizen’s lobbying group Common Cause, called out the commission for “a complete lack of oversight” on Verizon’s splicing practices.
“If there are these problems with Verizon, then they should be addressed by Verizon – but it’s the PSC’s responsibility to ensure that’s done,” Keeley said.
Top 10 Reasons to Own Your Own Fiber
January 21, 2009
Here’s a great article by Telecom Ramblings’ Rob Powell on the importance of owning your own fiber…Click Here to read “Top 10 Reasons to Own Your Own Fiber”, or read more below…
Top 10 Reasons to Own Your Own Fiber
January 13th, 2009 by Rob Powell
As readers of this blog know, I’ve always preferred service providers that own their fiber rather than lease all their connectivity. Dave Rusin over on Telecom Straight Shooter goes perhaps one step further, referring to himself as a “fiber bigot”. Now there are all sorts of justifications and reasons for our common obsession, but the jargon can get kind of thick and make the eyes glaze over. So here is a simplified and maybe light-hearted way to look at things:
1. Independence from regulation – Leasing from the ILEC is like being at the rodeo and sitting on a bull in the chute. For now he can’t move, but the guy keeping the gate closed likes to play with the button so we don’t forget about him. Owning fiber is like eating steak in the press booth watching the other guy.
2. Limited competition – Did someone just say “fiber glut”? Over there on that route there are piles of it certainly, over here it’s just little ol’ us. Fiber is only a commodity where it is geographically concentrated, everywhere else it is buried treasure.
3. Stickiness – If you are fiber free, you work really hard to keep your clients very happy at all times because they usually have many alternatives. If you supply the fiber to their building, you are the alternative.
4. Service quality – If you own the fiber and something breaks, you fix it. If you don’t own the fiber, someone else will fix it for you. Soon, he says… Soon!
5. Higher margins – When your customers can’t threaten to leave every time they want a better price, you don’t have to live on razor thin profit margins. Unless you want to of course, it is still allowed.
6. Asset Ownership – Fiber in the ground stays in the ground for decades, it can’t get up and walk away when times get tough. If your principle asset is a customer list, its value can change on a much shorter timescale.
7. Bandwidth growth – Of all the ways to satisify the potential explosion in traffic that will eventually come from the next wave of video, telepresence, holograms or whatever, nothing scales like fiber. You can always add more fiber on a route, 10 time, 100 times, whatever. You can’t add more spectrum, physics frowns on that. And if you bury that much copper, metal detectors won’t be able to find pennies anymore, and we can’t have that.
8. Flexibility – A business built on fiber can always move vertically, from dark fiber to transport to IP to managed services and all the way to consumer services. The other direction is much more difficult, like building a pyramid upside down.
9. Coolness – If you are fiber free, you get to spend all your time using and teaching your employees to use one of these:But if you build your own laterals and loops, you sometimes get to play with use one of these:
’nuff said?
10. Fame – you might even get to be on the metro fiber and lit buildings update on Telecom Ramblings! And who doesn’t want that?
Got any other reasons to add to the list? Leave a comment below!
Sh!**y Little Companies
January 19, 2009
I need to lay some ground work on this topic before I give out a general warning to CEO’s and CFO’s during this economic downturn:
I read a book a few years back–a kiss and tell book about the Investment Banking financial community. Nothing I read surprised me as much as it validated my observations and informed opinions.
The book called, “The Accidental Investment Banker: Inside the Decade that Transformed Wall Street” was written by Jonathan Knee, who became an accidental investment banker himself. Knee exposes the banking industry for the ilk they are based on his experiences while working at Goldman Sachs and Morgan Stanley. Like I said–this is a kiss and tell book. But–to be fair–if you choose to read it, don’t confuse the moral quandaries and questionable ethics with boutique investment banking firms who actually work honestly for a living.
Sh!**y Little Companies or SLC’s is a term used in the banking industry to describe small companies (less than $500mm market cap) that are of no interest to big time bankers unless one of two things is present: The first is if there is an economic slow down. The second, when there is a need to understand innovation.
Let me dive deeper into these two points.
During the telecom downturn of 2001-2003, when Bankers were sitting on their hands, all of a sudden SLC’s (such as AFS) started getting phone calls from Bankers (who would not have given AFS or me the time of day just a few short years ago). Though they tell you one thing, like raising equity/debt while bantering their brand, what they are really doing is calling for a free seminar and industry update since they have nothing to do. My warning to other SLC’s is to be wary as our economy slows – because will start up again: don’t give any free seminars to anyone making financial claims too good to be true – no matter what they tell you. The bigger they are, the more suspect you should be. After the free seminar, you will eventually be told you are to small, not the right fit, it’s too early, too late or some other garbage along those lines.
Read the book if you don’t believe me.
A byproduct of giving the free seminar is disclosure. I have a saying about big Wall Street Bankers – they all share the same spreadsheets and spit. If you get suckered into giving a free seminar, a Banker may be trying to pimp you for some of your tricks-of-the-trade. If you disclose the family jewels to impress the Banker, you will be provided with all sorts praise about your creativity and innovation. What will really happen is value creation…but not for your shareowners.
Since big companies find it difficult to innovate or move quickly, the Banker will share what you revealed with their big company clients, but as their idea. Why? Because they endear themselves as knowledge-value-adding after pimping the SLCs because they get bigger fees from these clients.
Never share the family jewels.
Sorry, I don’t buy NDA-anything within the financial circles.
Read the book if you don’t believe me.
Time, Money, and Program Managers as Dumb as a Bag of Rocks
January 16, 2009
History just keeps repeating itself…
I just finished reading an article titled: “Upgrade or else” by Ed Gubbins at TelephonyOnline.com. The sum and substance of the article are alleged practices by the ILECs to force customers to upgrade from certain services through altering speed, “shoddy service” or, believe it or not, late delivery.
How can they get away with this? It is really simple – there is a concentration of market power and wealth – that allows this to occur. Three “modes” of platform technologies – cable, wire line, and wireless – do not bring choice and robust competition. The Telephony Online article just touches the surface of what I have called “non-price behaviors” by ILECs since 1996. These behaviors are not unknown to the FCC or Public Service Commissions, and by and large, remain ignored as “soft complaints.”
When you are a non-ILEC and don’t have a 100+ year head-start along with protection as a monopoly, non-price behaviors of the ILEC are used to delay or destroy competition by sucking up two finite resources any viable competitor has — time and cash. I allege it is purposely done.
Let me share with you two real life examples of how the game is played by the ILEC to stymie, delay and burn-up the cash and time of alternative competitive business models. Once again, I have changed the names to protect the innocent and the idiots.
Example 1: Leasing ILEC duct.
Upon written request, the ILEC must–by law–make available for lease any excess duct to competitors at tariff published rates. Sounds simple. Sounds fair. Doesn’t it? Here is the game: you fill out the paperwork for a duct search, say, on Maple Street. You may have to pay a fee to apply – as high as $700.00 which is an off-tariff charge. The typical ILEC, after 100 years in business, has very limited CAD-related records on where there ducts are or their availability…so they claim. Once you fill out the form, the ILEC has 90 days to get back to you about the availability.
Yes, they get back to you on day 89.
On that day, depending upon the opinion of the ILEC, they will inform you that they “believe” the duct is available, but you will need to pay an off-tariff charge for the ILEC union worker to go out and conduct a physical search. Can you say 90 more days? If you agree to another three months, and agree to pay even more cash, you may be charged anywhere between $75 – $300 per manhole for the ILEC union worker to look and document what they should have been doing for the past 100 years.
At the end of the physical search, the ILEC may have just discovered, based on their interpretation, that they have no duct available. However, they may know a duct is available on a street one block over but fail to tell you unless you fill out the form and start again. There’s another 180 days and more cash lost. Also, an ILEC trick is to say that the duct is in use – they place a fiber cable in the duct that is not being used but report it as “occupied.”
Next time you see me in person, remind me to tell you how AFS beat the ILEC at this game.
What does it cost per mile to trench or bore if the ILEC ducts are “occupied” — $100,000 to $300,00 per mile depending upon all sorts of factors plus the time.
Nice.
Example 2: Wholesale service bonding and renting.
Several competitors went before a Public Service Commission (PSC) to complain about the lack of responsivness the ILEC has offered in wholesale matters such as provisioning, on-time delivery and–believe it or not–service reliability. The PSC listened and called a hearing. At the hearing, a senior executive of the ILEC proposed a “solution” to the “perceived problem” of lack of urgency and accountability as alleged.
It was then proposed that the ILEC would dedicate a Program Manager directly to each wholesale customer as their single point of contact, providing accountability to the wholesale buyer and the ILEC. The PSC applauded, tears flowed and singing broke out across the heavens.
Right.
In reality what happened was that each wholesale customer did, in fact, get a full time, dedicated Program Manager as promised. The ILEC chose the nicest people one could find but they turned out to be as dumb as a bag of rocks and couldn’t get anything done if they tried. This non-price behavior just added another layer of delay, cost and time loss.
These two examples are reason enough why AFS stopped spending money on fancy lawyers to lobby the FCC or Congress a long time ago. Instead, we put our cash to work on an immunization program from the regulators and the ILECs – we own and operate our own unique metro fiber rings and the laterals into the buildings we serve. We are not big advocates of ILEC Type 2 and all the price and non-price behaviors that accompany it.
If anyone reading this has similar experiences, please chime in. Our regulators are in the pockets of the largesse.
Seriously? “MagicJack”?
January 14, 2009
Despite the name, I decided to try the MagicJack. Turns out, it’s not as bad as it sounds.
You can get all the long distance you can manage across the USA and Canada for about $8/year under a 5-year deal.
You can travel with the device and plug it in anywhere there is an Internet connection. You can even be in Europe and call the US from it. Have anyone living abroad? Just program it from your U.S.-based computer, ship it to your family or friends overseas, and they can call you (or anyone in the U.S.) anytime as though the call originated in the United States.
In general, pretty good. The key is … drum role … you must have a very reliable DSL or Cable Modem connection for it to work perfectly. If your connection is any less, you can expect the occasional “tinny” sound and sometimes a latency issue.
Here’s more on the product:
CES: MagicJack celebrates two millionth customer
Jan 6, 2009 1:29 PM, By Sarah Reedy
Coming off a banner growth year, magicJack partners with Best Buy, Radio Shack to drives sales past two million
More than 2 million customers purchased a MagicJack in 2008, at a rate of 250,000 subscribers added per month. The palm-sized voice-over IP (VoIP) device and telephony service stole the spotlight in a crowded VoIP market this past year, attracting mixed reviews, including praise of its low-cost service and complaints about its online-only customer support. Still, the telephony application has resonated with consumers as it promises up to $1,000 in savings per year. According to inventor Dan Borislow, having continuously improved the service, MagicJack will lead to $1 billion in customer savings in 2009.
The company, which will be celebrating its banner year at a party at the Consumer Electronics Show this week in Las Vegas, also inked its first retail deals to kick-start 2009. The first was with Radio Shack six weeks ago and the second will be Best Buy, beginning this week. Thus far, Radio Shack has had to continually adjust its inventory numbers to handle higher than expected demand, Borislow said, adding that two more large retailers will be announced as partners by the end of the month. He anticipates 20 different retail locations by February. Consumers can also still get a free 30-day trial or purchase online.
“Our online sales have recently gone up again,” Borislow said. “They were down in the December time frame. As it turns out, we weren’t really a gift item, nor would I ever suspect that a telephone service would be. It’s something that people rely on… With the economy and the credit crisis and people trying to buy presents, December was a good month but not as good as November. And it won’t be as good as January. Our online sales have recently picked up pretty dramatically.”
Borislow is no stranger to heading up start-ups in the midst of an economic recession. He formed Talk.com in 1990, which sold long-distance service to four million AOL customers. Like MagicJack, the emphasis was on an affordable, necessary service for the typical American. To date, MagicJack has been marketed in late-night infomercials, a 28-minute spot to educate consumers, Borislow said. Now, it is switching to 30-second commercial slots, showing its cost-savings in relation to services like Vonage.
“I’ve had these professional media companies telling me how to brand it as a mainstream brand name and all I’ve ever done my whole life is sell a discounted service,” Borislow said. “I know no other way than by keep on pitching the price savings that you will get. Especially in these economic times, I think it’s resonating even more with people as they look at cost savings.”
Welcom Back Danny Bottoms and Lynn Refer!
January 12, 2009
Welcome back two class acts.
I believe fairness, stellar ethics, and integrity and character counts. I like to work with people who have these traits.
Back into the telecom fold for 2009 are two past CEO’s I hold in high esteem – Danny Bottoms and Lynn Refer.
Danny was the former CEO of OnFiber which was acquired a few years back by Qwest Communications. OnFiber was a growth company and never went bankrupt. Dan recently joined Cavalier Telephone as President of Wholesale and Government Division. Dan is back from a two-year “venture” as a COO of a cables services company in Dubai.
Lynn Refer is the former CEO of Looking Glass Networks, acquired a few years back by Level 3. Looking Glass, like OnFiber, was a well managed company and did not fall into bankruptcy. Post acquisition, Lynn remained at Level 3 as President of their metropolitan networks. Lynn just joined Telecom Transport Management, Inc as CEO in Seattle.
You may be asking what the big deal is about these two guys. It’s simple: I enjoyed doing business with them previously and they are superb people. Moreover, they don’t live on spreadsheets–they actually understand phases of organizational growth, operations, sales and how to organically grow a business. They treat employees well and fair. They understand that the competition is the ILEC, not one another. When we had a joint opportunity, we could discuss our strategy openly, execute it without lawyering — they are people of their word. Both are customer centric and don’t believe losing money on a “deal” is a good idea. They favor quality and reliability to further the brand over lowest price.
As an enterprise or a carrier, if you ever get an opportunity to do business with Dan or Lynn, they have my endorsement.
Welcome back!
Time Flies When You’re Having Fun
January 8, 2009
Dear Loyal Readers:
It’s 2009 … how quickly time goes by when you are having so much fun!
Just so we understand one another–I am the last person who wants to hear myself dribble. Don’t expect me to write something every day, as I also have this day job. However, do expect that when I write something it is meaningful (at least to me) and I will try to make the subject interesting with just a splash of humor or cynicism. What good is life if you can’t point at it and expose the stage show of others?
The end of the year slow down over the Holidays gave me ample time to rest, which I needed. 2008 was a great business year, but other matters in my life became stressful. My wife and I had to deal with a diagnosis of breast cancer in August 2008 – ironically diagnosed on our 25th wedding anniversary. We have now completed weeks of radiation and are on the way to a high recovery rate typically greater than 98% after 5 years. It’s that damn 2% that will bug me forever. Here is the deal: ladies get your mammograms yearly. Doing so gets you an early diagnosis and an opportunity to be a survivor.
I figured my first thoughts for 2009 would have been about mediocrity in America and how concerning it is to see the government financially reward losers and then pick who wins or loses using our tax dollars. Instead, I read this gem of an article this morning which just mirrors how deep political corruption runs in America.
Here is the AP article:
Phone exec says Pa. senator listed $50M in demands
Tuesday January 6, 8:17 am ET
By Maryclaire Dale, Associated Press Writer
PHILADELPHIA (AP) — The former president of Verizon Pennsylvania testified Monday that a powerful state lawmaker gave him a list of demands worth $50 million during negotiations over phone-industry deregulation. The alleged demands by Sen. Vincent Fumo included $15 million for a small Philadelphia charity linked to him; $10 million for neighborhood re-development in his district; and $10 million in deposits at Pennsylvania Savings Bank, the Democratic lawmaker’s family bank.
“Naive as I was, I asked (Verizon lobbyist Stephen) Wojdak what PSB was,” Daniel Whelan, the retired Verizon executive, testified about the alleged demand for the bank deposit.
Fumo, who left office in November after a 30-year career at the state Capitol, was opposing the company’s deregulation plan in the late 1990s.
Whelan’s testimony came as prosecutors moved toward the close of their case in Fumo’s 139-count corruption trial. Fumo is not charged with any wrongdoing in the Verizon matter, and his lawyers fought to keep Whelan off the stand.
However, prosecutors prevailed and called him to testify about his meetings with Fumo and Fumo delegates as Verizon sought approval of its plan from the state Public Utility Commission.
The 65-year-old Fumo, a millionaire banker and lawyer, is charged with misusing more than $3.5 million from Citizens’ Alliance for Better Neighborhoods, the state Senate and the Independence Seaport Museum.
Peco Energy Co. had agreed to donate $17 million to Citizens’ Alliance, the same nonprofit allegedly on the list of demands Fumo submitted to Verizon. A former Peco executive has testified that donations to the charity were made after Fumo agreed to drop his opposition to the company’s business plans.
When first confronted with the Fumo’s demands, Whelan testified, he had wondered if it smacked of influence peddling and considered consulting a criminal lawyer. He ultimately met in 1999 with Philadelphia lawyers David Cohen and Arthur Makadan — well-connected Democrats — about the thorny political situation, he said. They counseled him to “find a way of working it out with the senator,” Whelan testified.
Fumo’s lawyer, Dennis Cogan, is expected to cross-examine Whelan when the trial resumes Tuesday. Cogan declined to comment after Monday’s court session.
The government is expected to conclude its case later this month, after about three months of testimony.
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Now, to my soapbox and reality check: For years I have been saying it is a fool’s bet to rely on the government and the ILECs for network pieces and parts as a business model. The fundamental definition of an entrepreneur is having the knowledge to do things better and not rely on the status quo, such as government regulation.
What does this article tell us?
Though the aforementioned are “allegations” at this stage, how deep does this really run? We’ll never know because the government, FCC and DOJ turn a blind eye and ear to those of us with revenues less than $30 billion a year unless we do something shady. The Communications Act of 1996 has created a concentration of power and wealth when it comes to competition and the answer to this problem is to not rely on more of the same going forward. Specifically, any future competitive model built around relying on the ILEC and endorsed by regulators will move us sideways at best. Personally, I am not a member of any political party — our telecom competitive problems, like the collapse of the financial credit markets, run deep and the lack of transparency, proactive investigations or government accountability is appalling.
One small example on how corrupt things can get even at our scale: In one market we serve, we pay a fee to access the public rights-of-way to install fiber. The fee allegedly covers the reasonable costs of restoration of the surface. However, in this market, the local government charges annual real estate taxes on the fiber. This same local government requires any and all fiber builders to provide them–for free–fiber strands for their own use. I view the fiber as of value and the requirement that giving it free is a shake down at best, if not pure extortion. I thought putting fiber into their municipality would be a competitive community benefit and the restoration fee’s would more than cover what we disrupted. This is just one example ….
Bottom line: When will this insanity stop? We need these bad actors – politicians and business people alike – to be prosecuted under the laws we have in place already. Going to prison, with no exceptions, sends the right message. As I have often said, if you are a kid in the inner city and get caught stealing a pair of Nike sneakers, you will go to jail. You can’t write a “restitution” check for “bad judgement” to get out of it or afford the top tier of our two tier justice systems set up for those who can or cannot afford big time lawyers. Justice is not blind in America, it is just open for business.
I welcome your thoughts.
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