2010 Metro Connect (Part I)
February 8, 2010
I recently attended the 2010 Metro Connect annual event in Miami, Florida. As long as I can remember, I have been a speaker at this event. In my opinion, this event is better than many others at providing substance over rhetoric. The team at Capacity Media, producer of this annual event, works diligently to ensure the topics are timely and relevant and the speakers are insightful.
To my Blog readers that are from Enterprises, Education, Government, Hospitality, Financial, Healthcare, etc. – please do not think it is Telecom-only event. On the contrary–by attending this event you will learn the ins and outs of Telecom because large propaganda-spewing Telecom firms (like Ma Bell) aren’t the dominant force at this event.
For example, FiberLight (Atlanta, GA) was a leading sponsor this year. FiberLight is a service-oriented, responsive carrier that has major metropolitan fiber infrastructure in the top 10-12 markets in the United States. Sure, they might not be a household name, but you can glean invaluable knowledge from listening to a panel or speaking directly with Mike Miller, CEO of FiberLight.
Capacity Media produces various events similar to this one throughout the world. By attending one of their events, I can promise you that it is virtually impossible to attend/leave one without obtaining quite a few “gold nuggets” of insight. You can meet C-level executives who are well-versed in Telecom issues such as regulatory filings, big carrier issues, etc. and are genuinely pleased to discuss these topics candidly. These are CEOs that stay around for the event as opposed to speaking for 60 minutes and then hopping on a private jet.
But I digress—back to this year’s event. The big buzz, and it’s not limited to Metro Connect 2010, is the expectation of another round of Telecommunications consolidation–this year with the focus on metropolitan fiber optic infrastructure. Believe it or not, contrary to the Real Smart Guys (RSGs) on Wall Street back in 2000, there is a shortage of fiber optic infrastructure in metropolitan areas. I know it’s hard to believe! Bandwidth demand is growing at 50% each year which is outpacing the infrastructure supply and creating an imbalance. There is an even greater imbalance of metropolitan infrastructure supply outside the top ten cities in the United States. For those owning infrastructure that is highly unique in footprint, there is even less of a supply! With these facts in mind, the consolidation buzz was inevitable.
I am not the type of person to take everything I read or hear as Gospel, but I do observe things, and I believe the consolidation buzz has more strength than anyone may think. Why do I feel this way? I will go into a deeper discussion in subsequent posts, but I can tell you this fact based on my personal observations—in nine years, there were more investment bankers and private equity (PE) firms per square foot in attendance than I have ever witnessed at any conference. When I speak of the big PE firms, I mean the big “players” as opposed to the wannabes. For years, PE has been talking about consolidating and driving data IP fiber infrastructure platforms. 2010 just may be their year. As I chatted with a few of my PE acquaintances about the buzz around data IP platform infrastructure consolidation, I had to rib a few by joking, “Imagine if you actually did first mover advantage three years ago like we discussed–you would look really smart today.”
At the conference, I metwith Investment Bankers, PE Managing Directors, Bank Managing Directors, Wall Street Analysts and other CEOs in attendance. As you can imagine, my schedule at the conference was packed with private meetings. I only saw the light of day as a panelist examining the topic, “Does the dominance of industry giants spell the end for the small metro wholesale provider?”
Andy Lipman from Bingham McCutchen–industry notable and legal scholar in all regulatory matters–moderated the panel. I enjoy being on a panel when Andy is the moderator because he gets to throw a few barbs and I am able to share my “love” for lawyers and certain aspects of the legal profession such as the Vortex. Our panel members consisted of: me (an out-of-the-closet fiber bigot), Bjarni Thorvardarson, CEO of Hibernia Atlantic and John Scarano, COO of Zayo Bandwidth. It was quite a lively panel filled with personality and character.
We dispelled the notion of “dominant industry giants” fairly quickly. In summary, as long as there are industry leaders who are not customer-friendly, slow to respond, one size fits all and bureaucratic, there will always be a healthy competitive wholesale segment. Although the idea is impossible for Wall Street to understand, even if you look 20 years down the road, network diversity is a necessity not an option.
After thoroughly writing off the dominant player theory, we moved on to the Google threat—and we dispelled it as well. Then Andy moved on to another hot topic—backhaul to wireless towers. This discussion was fairly interactive because we all did not agree on certain things, but because this is my Blog, I’ll share my perspectives just as I shared them during the discussion.
Join me later this week as I provide a quick Telecom history lesson and then dive headlong into the topic of tower backhaul.
Written by Dave Rusin - Telecom Executive
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Thanks Dave for the insight. Would you recommend Capacity North America in October or wait until Metro Connect 2011?