Rest in Peace
July 30, 2009
Dear Blog Readers:
Over the weekend, AFS lost one of our employees in an terrible accident.
I won’t be publishing anything for a few days as I just don’t feel the spark to do so.
When you start a company from nothing, and build it smartly year-over-year over a decade, always growing and hitting the correct curves, a company our size becomes very close. It’s really less about the spreadsheets and more about the attitude, culture and focus on customers that we have created here. At AFS, we all understand that collectively “winning” puts food and clothing on everyone’s table, including our customers. Thus, our deep culture of service, trust and mutual support is always apparent.
A company our size hurts when something like this happens. Why? Because we know each other, we know the families, we share common bonds – we are not numbers in some gigantic corporate machine. Human Resources does not just punch out his time card and say “time to move on.”
There is a heart and a soul in our culture and our service. We have empathy for one another, our suppliers, our partners and our customers and we do the best we can. That empathy will be mourned alongside our loss.
Losing this employee isn’t as simple as going out and getting “another.” One can find a person with certain skills, but it’s tough to find someone with the honesty, the loyalty, the selflessness and the commitment that is specific and unique to AFS employees.
As the CEO I am hurting, and so is the AFS community. We have lost family.
So, I need a few days to get a spark back. It will take time.
Dave
What I Learned on My Summer Vacation, Response to Reader
July 28, 2009
Reader Comment:
What do you think is holding back the deployment of broadband in your vacation paradise?
Maybe the lack of a sufficient number of potential profitable paying subscribers?
Your experience is very similar to that of my yearly cabin vacation spot. The town’s coffee shop and library are the only places to get some Internet access… with acceptable speed (not dial-up).
It is difficult to even make a cell phone call in the town. There have been numerous proposals from service providers to build a fiber fed network to the community. The silly part is they never ask how much the subscriber would be willing to pay for their high-speed service. Based on the density of housing in the area and the local versus vacationer ratio, I wouldn’t invest in any service provider that would build in this area!
Like they say in wine making “How do you make a lot of money making wine… start with a lot more money!”. Same with building in low density areas!
–Tom R.
Dave’s Response:
Prince Edward Island has several tower locations that would suit a Wimax implementation quite readily. But like I said, I have no idea what the Canadian or Provincial Government has to say there basic tenant of competition is in Canada. I am having so much fun with the Beltway in America, I have had little time to dabble in Canada regulatory matters though I do keep an eye on Europe.
On pricing, everyone wants high reliability, gobs of bandwidth for near nothing. The “free” business model in the USA Telecom meltdown circa 2001-2003 is proof you can’t get something for nothing. You get what you pay for. Caveat Emptor and the like.
Here is what I know about real infrastructure deployment in today’s world, especially if its unregulated. No one is giving you 20-30 years to recover capital expense without regulatory
protection (as a monopoly). No sane investor is going to place investment in a company that
thinks getting a return in 10-years is a good idea either. Or, let me put it this way, I have met more Rose colored glasses people than realists.
Building infrastructure for competition is an expensive, complex undertaking- especially local infrastructure – you have to pick your spots and pick them right if you don’t have a sugar daddy as an investor (aka government or dumb money). But having alternative, unique, diverse telecom infrastructure is very important as IP packets continue to dominate and displace the legacy technologies of yesteryear.
As I say, in telecom, things happen a lot slower than our industry media leads us to believe.
What I Learned on My Summer Vacation…
July 23, 2009
Last week I took my annual pilgrimage for a one week “vacation” to Prince Edward Island,
Canada. It’s really a very nice place in the summer–I suggest you try it some time.
I go there because my wife’s family somehow landed there in the 16th Century, so she has
relatives scattered all over the place. Thus, I dub the Island, informally, as In-Law Island and I will leave the rest to your imagination. I do this in case one of my relatives by marriage happens to stumble on to this particular blog. I don’t want to get into socialists but …
Actually, when you have a business like AFS, you are never really on vacation. The business
chases you 7×24, almost 365 days a year. (Note–that reminds me of a funny
story to share on a future blog. Someone remind me to share this around the Christmas Holiday Season … it’s a real screamer and has to do with VC’s.)
Anyhow, In-Law Island is not wired that well. Outside of Charlotte Town, most people are
pretty much dealing in a dial-up word. There is some gold to be made on that Island, via 4G or
WiMax. The locals want to get at least 3 megabits of service – meanwhile back in the USA, our
minimum standard per the Federal Government is 768 kilobits as being “served.” Quick note–Iread last week Austria is now spending some billions to bring 100 megabits to residents and businesses in Austria – as a minimum standard.
Every year I meet up with my wife’s cousin, Harvey. He is a rancher with a horse farm–a
gigantic operation. He is also a Special Investigator for the PEI National Park system if matters
of petty larceny or as such things occur. He tells people not to e-mail him pictures or big files as the dial-up is just unbearable at the ranch. To make it a matter of fact it would cheaper for
Harvey (value of his time), depending upon the price of gasoline, to drive the 20 miles into
Charlottetown and go to the public library to down load a 5 meg file than it is to wait for it on
dial-up! Harvey has been pecking at the government of PEI for years and they claim he will have wireless access sometime this summer — knowing governments as I know them, I am willing to bet next summer he will still have the Model-T modem running. I hope I am wrong. Imagine trying to survive a winter that far North with nothing but dial-up!
You can forget about DSL outside of Charlottetown, as I look at the copper facilities on poles,
too many SLICs were installed over the years as the Island’s remote populations grew in order
to steal grounding leads for tip and ring service to extend the use of existing copper over more
residences for telephone service. Wireless is probably the only and most cost effective solution.
For you Broadband-Over-Power Line (BPL) dreamers … just keep dreaming … it does not work.
I had a Board meeting last week from In-Law Island. For me to attend, I drove 8 miles from the
shore to an area called Bon Shaw. From there, I literally sit under a cell tower with my EVDO
card in my lap top and my cell phone. Since I get there 45-minutes early and download 4-5
megabytes of charts; I am good to go. I get no signal from this tower at the shore. The Board
meeting itself was uneventful. We are having another good year and are now focused on the
operating plan for 2010. I am feeling more like the Maytag CEO every day (don’t I wish).
Why do I point this out? Just sharing an experience from another country and demonstrating the pent-up demand for broadband connectivity. At In-Law Island, it’s not an issue of “build it and they will come”. It is that they are waiting for someone, anyone to bring them anything but dial-up.
Let’s say I was stinking rich and retired, like my father-in-law–I would start up a WiMax business on that Island. I say this without knowing the regulations or politics. The rich stinking father-in-law … I’m just kidding, he married into money via his second wife. Lesson learned: always marry into money. That woman is just dripping with diamonds and gold – I’m surprised she even talks to me! She even has a gold tooth, just like a pirate and has a Humming Bird on her shoulder instead of a Parrot.
So, upon my return to America, the land of 768 kilobits as a broadband “served” standard; we
pretty much traveled the Interstate Highway System from Maine through Massachusetts into
New York. I always like it when you enter New York State on an Interstate. The first sign you see coming into the state is “Toll Booths Ahead” and “EZPASS Accepted.” About a quarter mile later is the “Welcome to New York” sign … that’s pure irony in my mind. That speaks volumes about New York State and its taxes, fee’s, surcharges, licenses, etc … The message is
sort of like, if you don’t have the funds to live in New York, turn around now.
Anyhow, traveling the Interstate, I had a thought, if we applied the same logic as the Beltway hasrecently applied to the definition of Broadband at 768 kilobits to the Interstate system; we would be driving on dirt roads today and still paying the same tolls that continue to go up every year.
And that my loyal readers was my summer vacation.
BTOP Nuggets
July 21, 2009
My dear friends and fellow taxpayers,
You won’t believe what I am about to tell you. Make sure you are sitting down. It’s about the Beltway again.
Remember all that stimulus money (aka tax dollars/future debt) President Obama is sprinkling across America? Well, $7.2 billion of it is dedicated to the Broadband Technology Opportunity Program (BTOP) with a primary emphasis on making low interest loans and grants available for broadband infrastructure.
Two Federal organizations have processes to distribute the funds. The traditional Department of Agriculture RUS administration serving rural communities (loans) and under the Department of Commerce the NTIA is serving in a matching grant capacity issuance of funds.
Here comes the UNBELIEVABLE part – two nuggets just for you.
The first nugget, the NTIA is responsible for awarding $4.2 billion in funds. That’s “b” as in billion. The NTIA is seeking unpaid but “expert” volunteers to assess grant applications and score them. Just think about this for one second.
If I were a nasty ass ILEC or Cable Company, I would have every “expert” on my payroll apply to volunteer. I would ask every retiree with a pension interest to volunteer. I would have every law firm or consulting firm I have ever done business with encourage to have their experts apply to volunteer. If I were the CWA, I would get expert members or retirees with pension interests to apply as volunteers.
Talk about conflicts of interest…who you may know over what your application says; potential of fraud, competitive bias, potential of grant fixing, the overall integrity of the process and lack of plain old commonsense. This is amazing!!!!
There are no other “volunteers” in any other area of the $700+ billion stimulus funds being distributed. This is ripe for corruption, schemes, collusion – you name it.
The second nugget, after any entity submits a proposal, the proposal will be posted for public review/comment. This is called “transparency”. Within the process of a public review, there is an ability to question a proposal on its merits by a third party. A proposal may be declined based upon what this third party states or alleges. By the way, if you submit a proposal and are challenged by a third party; you have no due process rights if this happens. The NTIA will not even disclose to you who questioned what or what they alleged. If this isn’t Communism, what is it?
If I were a nasty ass ILEC or Cable Company–any municipality proposing anything–I would be submitting a challenge. If I were a nasty ass ILEC, Cable Company, Wireless Carrier, ISP or CLEC (and for pure self-serving competitive reasons) and saw a proposal that gives me competitive heartburn, I would be submitting a challenge. One would think any and all “challenges” would be transparent and open for public scrutiny as well.
I thought we recently elected transparency.
Pretty nuts, huh!!
Agnostic Fiber
July 16, 2009
Are you aware that fiber optic strands have no idea if they are attached to a residence or commercial building? None whatsoever. On occasion somehow, “experts” in our industry confuse things such as FIOS, for example, which is a residential service and not a business service.
Well, FIOS is a fiber platform – it does not know what service runs over it. Moreover, FIOS is a fiber termination directly into a home or business.
Why do I bring this up? Let’s play connect the dots.
First, for disclosure purposes, I am a fiber bigot – dark, dim or lit – I am a fiber bigot. I guess one can say I have diversity towards and sensitivity to optical fiber. Lit fiber provides a host of spectrum colors as well beyond dark and dim. I am like part of a fiber Optic Rainbow Coalition – I like all the things fiber can do.
Today I happen to read that Motorola has sold off its Fiber-To-The-Pedestal (FTTP) business and is keeping its Fiber-to-The-Home (FTTH) business of products. For those of you still relying on Ma Bell, “to the pedestal” results in the last point between the pedestal and the building/home are copper. For those looking at the “H” in FTTH – once again, whether it’s a home or building – the fiber strands do not discriminate.
Question: Why did Motorola sell off FTTP business but not FTTH interests?
Another article I read from Infonetics Research states that video will triple in consumption by 2013. For sake of connecting the dots, let’s say Infonetics Research is half-right with their forecast.
Cisco also announced a new product this week. This product is geared to the television set to provide – get this — affordable video conferencing. Sure there will be early adopters, but it is fairly important Cisco is making such a capability available targeted to households.
Connect the dots … what medium can handle this with scale, reliability, speed and lowest/cost per bit? Copper? Coax? EVDO? 3G? 4G? LTE? WiMax? BPL? Fiber?
I’ll let you be the judge.
By the way — those televisions supporting high-definition video – its 30 megabits a channel.
Connect the dots my friends – unless you are moving, you want to have a direct fiber connection.
Motorola is making a move, Cisco is making a move, and Infonetics if half right…which tells me the legacy networks are incapable from a physics perspective.
Then again, this past week, our government issued a definition of Broadband for America as a measure: 768 kilobits. Can someone give me the math on watching a high-definition video or real time program via IPTV over a 768 kilobit link?
One Big Yawn
July 14, 2009
The most prominent headline this week is the Department of Justice looking into anti-trust violations because large (non-dominant) wireless carriers entered into exclusive agreements on cell phone devices. America has ADHD and usually comes to some type of conclusion after reading just the headline. In this case, anti-trust investigating will not focus on how the wire line ILECs are screwing with competitors, bids, E-rate abuse, tax loop holes, etc. It’s about cell phone device exclusivity deals.
This antitrust initiative, my dear readers, is going nowhere. I give it a big yawn.
Isn’t it ironic though? On one hand, the DOJ is clamoring anti-trust against the large wireless carriers for being too big (too big to fail???) while on the other hand, our Treasury and the Congress are working feverishly to nationalize (aka “make big”) our banking system (too big to fail??). What sweet irony! Pure Beltway magic – Walt Disney is blushing.
A new telecom super hero organization has popped up in the headlines seeking justice against those bad actors, the ILECs. The NoChokePoints Coalition (www.nochokepoints.org) is leading the charge to have the government redress the inequities of special access service pricing from the ILECs. Translated: we don’t want to actually spend capital on infrastructure of our own or alternative carriers, but we want the ILECs infrastructure for cheap – legacy infrastructure at that!
To call it straight, this is the same old tired arguments previously made before the FCC against the ILECs resulting in a lot of lawerying and lobbying only to eventually, once again, have a Federal Court rule in favor of the ILEC under the law. In particular, the Communications Act of 1996.
Ever watch a dog chase its tail? It’s sad. The dog is really suffering from a psychosis.
I have written about this before and will summarize it again here: It has been 13-years since CA 1996 was enacted, I am sorry that in, 13-years, certain CLECs have not figured out or invested into getting off Ma Bells teat. What more do you want, another 13-years to figure things out?
I am glad, in the short term, that you played the arbitrage to grow a top line. However, margin growth and profits do matter in the long run. And you are not going to get margin growth riding on the back of Ma Bell … plain and simple. The ILEC controls your costs if you rent from them … they are not your friend.
Banking on change in the Beltway due to the elections? Relying on the government? Trusting the government to lower your costs after 13-years? All I can say about trusting the government – go ask an American Indian.
There are transport options available beyond Ma Bell–you just need to pay the going rate. Don’t be hypocritical, complaining on one side that special access prices are too high, while telling alternative providers unless you price below Ma Bell, you are not an option. Instead of viewing short term interests, pay the going rate with a non-Ma Bell transport provider so they can build out even more facilities you can take advantage of. Stop plowing cash for special access into Ma Bell who is taking your money and building out fiber optic transport and access that you legally have no access to directly which is also increasing the ILECs competitive advantage over you daily.
All due respect to the members and concept of our new super hero, NoChokePoints Coalition, but this is one big yawn.
Ultimately, the ILECs will see the FCC in court and history will repeat itself. The dog is chasing its tail again.
The Joke is on You, America!
July 9, 2009
I hope everyone enjoyed the Fourth of July weekend–the celebration of one of the more advanced countries (allegedly) in the world, technologically speaking.
The joke is on you America!
Just before the holiday weekend, the Notice of Funding Availability (NOFA) was issued by the Federal government to begin the process of building broadband infrastructure under the Broadband Technology Opportunity Program (BTOP). The NOFA is over 120 pages long – before you get to the actual application form to be released on July 7th.
So what’s the joke?
We finally have a definition of Broadband in America by our Government. Such high standards, goals and ambition – I am in awe! Let me quote from page 18 of the document:
“Broadband means providing two-way data transmission with advertised speeds of at least 768 kilobits (kbps) downstream and at least 200 kbps upstream to end users, or providing sufficient capacity in the middle mile project to support the provision of broadband services to end users.” (Yes, that is not a typo it is kilobits, akin to a step above dial-up. Not megabytes or gigabytes or petabytes or terabytes or exabytes… just kilobits.)
Those spineless, buggy whip wonders within the Beltway. When you use this as a data point, technically speaking, if you have a telephone on copper or a cable TV service you can be readily served. This places our penetration rates over 95%. A feel good country at a feel good moment in time … politicians can now claim what they have done to you – I mean for you.
Let’s see…Australia – going to 1 gigabit nationally in 4 years. South Korea ibid. Japan ibid. Tasmania ibid …. Need I go on?
America is ranked 17th in the world for Broadband access speeds and I am sure this will move us up the dial … Not.
We need to resurrect JFK from the dead; he understood vision and prosperity for America. We can gigabit America in less time than it took to put a man on the moon and at a fraction of the cost.
My favorite word selection in the above definition is; “advertised speeds.” That’s a beauty!
Happy 233rd Birthday America! At this rate, there is a comeback for the Telegraph and Pony Express — that would create jobs also!
The ponies are green.
Take That, Madoff!
July 7, 2009
Just passing along a quick tid-bit I recently ran into–
Bernie Madoff. Remember him–the biggest Ponzi scheme of all time?
After first being alerted nine years ago about possible investment fraud behavior on the part of Mr. Madoff, the Securities & Exchange Commission (SEC) has taken action.
After already having started a 150-year sentence in the Federal slammer, the SEC has just informed Mr. Madoff that he is now barred from the securities business.
Take that Bernie!
Jacko
July 2, 2009
Dateline: June 25, 2009.
Headline: Michael Jackson is Dead
Dateline: June 25, 2009
Headline: The Web Collapses Under The Weight Of Michael Jackson’s Death
Wake up America … if something really big happens (Think Crazy Man with nukes in North Korea), you can’t count on the web.
The government infrastructure programs and future Policy need to require minimum bandwidth delivery of 100 megabits – the proof is in the pudding. I think it should not only be a global economic imperative for the US of A competitiveness for REAL broadband over fiber but also in the interests of Public Safety and National Security.
Fiber access … plain and simple.
Something big happens (Think Crazy man with nukes in Iran), only the rural folks will have connectivity as major centers crash.
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