Fresh Squeezed in Florida
March 30, 2009
The House & Energy & Utility Policy committee in the State of Florida has passed a bill removing most state regulations over telecommunications competition. The bill also limits the Public Service Commission from most Telecom matters for all but basic landline services.
Here’s the logic:
- The rates for telephone service will go up–by an estimated 6% to 20%. This will attract more competition.
- Cable Companies are not regulated for phone service, which creates a disadvantage for the incumbent. (Talk about a good lobbyist). Cable companies can bundle, price, and promote without seeking PSC approvals.
Rusin Translation: The duopoly structure in Florida is not working and one party in the duopoly can’t compete because of regulations, resulting in lost market share. By allowing prices to rise (as I have said over the years, the free market) and as growing profits are realized, then and only then will new competitors enter. That’s when the business model just might make economic sense…
Will other states follow? What a concept–let the market decide prices, the winners, and the losers.
Now, if we could get the FCC to focus only on basic land line services only….
Rusin’s Lobotomy, Part 4
March 27, 2009
Just a few facts to support my logic:
- Fujitsu just announced an LTE wireless platform capable of delivering 120 megabits per second. It can go as high as 300 megabits at 20Mhz.
- Ericsson just announced a VDSL2 platform that boasts 500 megabits over twisted copper pairs using a vectorized noise cancelling technology.
- Charter Communications is delivering 60 megabits per second over DOCSIS 3.0 technology.
- Ethernet-over-copper a favorite of XO Communications delivering between 5 megabits up to 88 megabits per second.
- WiMax platforms delivering 180 megabits today, with greater expansion as the 700MHz licenses come on board for deployment
- An interesting satellite, WiMax and wi-fi model from CTC (St. Louis) and AlphaStar International to deliver 4G bandwidth speeds by low cost radios to anywhere in rural America. The satellites are a holdover from the Reagan Star Wars initiatives which are in place for back haul today.
Based upon the definitions above–and the hard facts–over 90% of America is under-served unless you have FIOS, DOCSIS 3.0 or an independent carrier fiber pipe serving a location. Once again, we are not under-served if we feel good about measuring bandwidth at 200 kilobits, dial-up, T1 speeds or slightly higher. Throwing money at anything less than 50 megabits (I prefer 100 megabits) is a waste of tax payer capital and not good for America, in my humble opinion.
Where do you stand? What do you believe when it comes to Broadband and bandwidth?
What’s good for America?
Rusin’s Lobotomy, Part 3
March 25, 2009
Here Is Why…
Here is why, in my opinion, the minimum definition for Broadband in America should be at least 50 megabits– if not 100 megabits:
We have the technology available today to deliver it…it’s a matter of prioritizing what is good for America.
I am not advocating only fiber optics, though it is bandwidth future proof (and makes the most sense for populated areas greater than 1.5 million in an MSA), and existing technology is readily available and should based upon the standards we set to become the focal point of deployment and fund allocation. Let me apologize now if “What’s good for America” gets in the way of legacy dial-up, special access, UNE-L, TDM, Rural Telecom and DSL interests (limitations).
I am not advocating any one technology – no one in the government should be picking winners and losers based upon technology or modal competition (been there, done that). We need to set a high bandwidth standard and let the free market choose the winners and losers. We need investment in geographic areas that make us globally competitive whether rural, suburban or urban.
Rusin’s Lobotomy, Part 2
March 23, 2009
Here I go applying common sense again…yet another step closer to the lobotomy I talked about last week.
My brain tells me we can not give definition to the terms “un-served” or “under-served” until there is a definition of Broadband. Turn up the electricity–but isn’t it logical that you can’t define un-served and under-served until there is a quantifiable definition or goal of Broadband in my crazy way of thinking? Shouldn’t that definition come from: “What’s good for America?” first?
If you agree with me, I’d like to know, as it might cause me to cancel the lobotomy.
Presently, our feel-good definition of Broadband, as established under the great Chairman Martin’s FCC regime, is any connection with a speed greater than 200 kilobits per second. This definition gave Congress and the FCC feel-good statistics of those being served by Broadband penetration across the United States in excess of 80%. If this is the case, why the debate? Why the funding? Why have the Bell companies been pouring tens of billions of dollars into “closed network” local fiber optic deployments?
Now, let me really cloud things up by getting back to “What’s good for America?”…
Depending upon whose numbers you look at, in the global reality of broadband, deployment, and penetration rate – America is, like, 17th on the list. #1 and #2 world ranking Japan and South Korea average about 100 megabits to consumers and businesses. South Korea recently announced an initiative of having a
minimum standard of 1 gigabit in 5 years! Just south of one of the few remaining Communist bastions–North Korea is heading in with a goal to have 1 gigabit of bandwidth service.
So, what’s good for America? 2.5 megabits? 1.5 megabits? How low do we want our standards?
In my opinion, the minimum definition for Broadband should be at least 50 megabits– if not 100 megabits.
On Wednesday, I will explain why…
Thinking about a Lobotomy
March 18, 2009
I have been burdened enough by God on this earth. He has blessed me with empathy, common sense, and–by the greatness of America itself–a good education.
As I keep following and participating in the “Broadband Technology Opportunity Program” (a.k.a. the “$7.2 billion in NTIA and RUS funds for greater broadband deployment” program), those virtues bestowed upon me by God are causing me to question my sanity. Therefore, I am considering a full on One Flew over the Cuckoo’s Nest lobotomy to align my thought processes with those I have observed thus far.
In all the clutter of self-interests, there is one fundamental question about broadband that no one is putting forward as a priority–that no one is asking: What’s good for America?
Through the process thus far, and throughout public hearings, there is a debate about the definition of broadband, and who are the unserved and underserved (by broadband). Whether it is an ILEC, large CLEC, small CLEC, municipality, state government, county government, industry association, or not-for-profit broadband lobbyist group, one thing is for certain – the definition of broadband is as diverse as the special interests.
I’ve got plenty more to say about this in the coming days. Stay tuned…
Clearwire Sends a Clear Message
March 17, 2009
There has been a change in leadership at wireless carrier, Clearwire.
And, according to most press accounts, it is a seismic shift of sorts.
Bumped up to co-Chairman, and out of the Clearwire CEO slot, is Benjamin Wolff. He is being replaced by Telecom industry veteran William Morrow, a
former Vodafone executive,and past President of Japan Telecom.
I don’t know either party, but I do know business – and I know how to grow a business.Though the PR spin says otherwise, I see this move coming as the
result of pressure from investors of Clearwire.
By media accounts, Mr. Wolff was a “deal man”, and with other carriers announcing LTE plans for 2010, perhaps the 4G opportunity that Clearwire has (had)
may be vulnerable. After all, once the PowerPoint charts are done and the cash/M&A consummated, it does come down to execution (not the other ex—as in
excuses).
This change is clearly a shift from deals to execution. We see this all the time across many industries. Once a razzle-dazzle “deal guy” runs out of deals, and it is
time to grow organically, this type of leadership change often occurs. There are those situations where “strip and flip” is a strategy for a deal person to generate
a quick buck. A lot of bad M&A can be found in strip-and-flip deals, as can those by buyers who can’t execute either or really did not know what they were
buying.
In Telecom, our most recent poster boy for the “Telecom Deal Maker” trophy was Bernie Ebbers. He’s the former CEO of WorldCom, and is now semi-
retired at a Federal facility. As you may recall, Bernie was always one deal ahead of reality and was not transparent about the true condition of WorldCom to
investors by way of accounting gimmicks and fraud with the WorldCom CFO. In short, Bernie did not get the integration work done. Once the smoke
cleared, WorldCom had never grown organically and sold for pennies on the dollar to Verizon.
My opinion back then (and today–especially in light of our current economy) was to let WorldCom go bankrupt.
It will be interesting to watch Clearwire in the months to come as it moves into serious execution mode. There will be a change in culture. What that change will
be remains to be seen, but if I were to bet, I would imagine it will be focused on acquiring customers, organic growth, cost levering and demonstrating results
from operations.
What I will watch for is not as much the top line growth for the sake of top line growth–anyone can lower price for top line growth. I will watch for the quality
of growth in their margins, customer loyalty, service reliability, and churn.
A new chapter opens at Clearwire – an enormous opportunity and a challenge. Best wishes to Mr. Wollf for past contributions,and good luck to Mr. Morrow
and the Clearwire organization–may all your contributions be of value.
Reason #177 Why I Dislike Lawyers
March 12, 2009
The recent Skype announcement reminded me why I dislike lawyers.
I will keep my rant short.
In a past life, I worked for a company negotiating on their behalf the first open API license known to mankind. It proved to be a pretty good idea and it created a win-win for my company and the computer manufacturer.
I worked with an in-house attorney to draft the legal documents and along the way, in layman’s terms; he came to understand the importance of API. He saw that what we asked for in the deal was good for our business, as it protected us from forced obsolescence.
About 18 months later, our in-house attorney wrote an article published in a well-known Law Journal. The topic? You guessed it: Structuring API agreements to avoid application software obsolescence.
Here is what I leave you with…do you suppose there was any mention of the intellectual contributions of the rest of the company employees? Even in a footnote?
What he did was ethically wrong, but he was coming at it from the legal standpoint of what he could get credit for.
And that’s wrong with lawyers.
Skype Makes Interesting Strategic Move
March 10, 2009
Way back when, after having entered the personal computer space, IBM did something that changed the PC industry for ever: They opened up their BIOS chip to others for nothing.
Virtually overnight, the IBM-compatible PC movement skyrocketed (and so did Microsoft). This one event created a de facto standard and increased the size of the personal computer industry pie for all participants.
Because of this, and my background in speech applications, Skype’s recent announcement especially perks my ears. Skype has opened an Application Programmers Interface (API) and a royalty-free licensing of a proprietary speech processing codec they call SILK. (Link: http://www.informationweek.com/news/telecom/voip/showArticle.jhtml?articleID=215800625)
This is a brilliant move by Skype.
I believe the near term effort is to get Skype standardized in mobile devices as the audio quality and low bandwidth utilization is superior over other codecs. Its dynamic range in low bandwidth situations makes it ideal as a platform chip since it readily scales to higher, richer frequencies.
I would not be surprised to soon see these chips configured in parallel form on communication subsystems and servers. The open API will attract developers, and I’m looking forward to seeing who carries the codec over into the world of open source software in support of such platforms as Asterisk.
For future thesis speculation: If I were Skype, I would be readying this position as the API adoption occurs and codec’s get embedded for a next generation codec that is seamless to the Skype API. Maybe this codec does audio—and perhaps, some video!
Add a WiMax chip next to it…I am having another vision…maybe my next start-up …
It’s All About the Love
March 5, 2009
I am a friend of the industry. If you regularly read this blog you know that I have no shame in admitting I am a bigot…a metropolitan fiber optic bigot.
You will find below a link to a FREE Seminar being offered by Ciena Corporation on March 24th – it’s all about the basics of lighting optical fiber, a.k.a. Optical Networking 101*.
So–to all my “asset-light” CLEC friends and purveyors of copper loop services–this is an opportunity for you!
For our Enterprise friends that worry about their carrier going bankrupt, or if you are someone who does not understand Telecom lingo–this is also for you.
During this seminar, you will discover how to:
• Make optical networking work for you
• Choose optical networking technologies
• Light up “dark fiber”
• Reduce recurring costs
• Prepare for future network technologies
• Get independent from Ma Bell
• Be in awe of Dave Rusin and his blog
• Become a part of, and join, the Fiber Bigot Club
Why do I share this? Because at AFS; it’s always about the love …
Register Here.
* All participants will receive a link to download “Optical Networking for Dummies.”
Before I Head Down to D.C….
March 3, 2009
…Let me share with you a few questions and topics of interest:
1. Why can’t the National Telecommunications and Information Association (NTIA) use the same qualifying language for fund eligibility as the Rural Utilities Service RUS? In sum and substance, a company is not eligible for funds under the RUS if they have more than a 2% national market share. This would eliminate the concerns of ILECs, big wireless, and large cable companies who already have billions of dollars from engorging themselves further. Give us guys under 2% market share a chance!
2. For fiber infrastructure deployment-–it is my belief that carriers that provide an open access network platform should be favored over those who don’t. Carriers (who as a normal business practice offer wholesale backbone capacity and dark fiber leases to other carriers) should move to the head of the line. In my opinion, any Federal dollars spent on fiber optic backbone should have a requirement that, at a minimum, dark fiber must be made available to other carriers on a commercial lease basis. A closed network carrier plus Federal funding for network extensions will not promote competition-–just a bigger closed network footprint. Carriers with closed networks should be required to open an appreciable percentage of their existing dark fiber for lease to other carriers before getting dollar number one from the NTIA. Talk about a fiber fantasy!
3. Flipper…and I don’t mean the dolphin. Yes, there are entities out there that will take the funds, install or warehouse something (fiber, PoPs, tower, wireless, WiMax, etc.) and then sell it to someone else a few years down the road for a profit. Since the NTIA funds are grants, whatever flipper gets is 100% profit.
4. The over-reachers. How will funds be managed to avoid a carrier from building over an existing carrier, especially a closed network carrier building over a carrier with an open access network platform as described in point #2? Remember the great land grab and Telecom meltdown circa 2001-2003-–lots of redundant networks built on top of each other in certain markets. Back then, private capital took billions of dollars of losses, given the irrational exuberance of “build it and they will come” prevailing culture. If CEO’s were willing to piss away private capital, what makes one believe some won’t do it with public grant money that comes without any equity interests?
5. Cross dressing. How will funds be managed to optimize their use? For example, AFS is very good at metropolitan fiber optic network deployment. We are very efficient at it and know the ins-and-outs. I would not expect that AFS pitching tower builds for Federal funds to be taken seriously (in a rational world) as this is not a historical, established proven core competency. Likewise, one would not expect a wireless mesh back haul provider to be seeking funds to deploy a fiber optic infrastructure when it is not a proven core competency. Federal funds should not be used for on-the-job training and new ventures. Once again, if open access platforms are funded as a priority as described in #2 above, the capacity or dark fiber lease will be available to others not so situated. I must be dreaming.
6. What stops a firm receiving funds by grant from placing them on their balance sheet and then levering them with debt? Sure, they will use funds to meet the Federal proposal–but why should the tax payers get cut out of the gravy if they can lever the funds? Let’s face it, if a participant levers funds by debt and goes bankrupt, the taxpayer is stuck as well. Some companies may actually lever funds by debt, and use the debt to pay dividends. Is that good use of the program? (Did I just piss off a bunch of shady types or hand out a real good idea for the ethically challenged?)
I have more, but will save it for my beltway visit. The above, at least to me, is all about commonsense. As much as I’m tempted to write further about commonsense and the beltway, my commonsense tells me to stop writing now.
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