Monthly Archives: March 2013

Kansas Deregulation

On March 27 a bill passed (HB 2201) the Kansas Senate that largely deregulated telephone companies in Kansas from being the carrier of last resort. The bill passed the Senate by 36 – 4 and passed in the House by 118 – 1. In the past telephone companies were required to provide telephone service to most customers who wanted service, with some limitations that applied to extremely rural customers. But the new bill provides a host of ways that can excuse a phone company from providing service.

The bill applies to all regulated telephone companies, but also to a lot of other companies that provide telephone service like cable companies and CLECs.

“I think we’re at the point where we can take one of our largest carriers (AT&T) and treat them as if they’re a wireless carrier or cable carrier,” said Sen. Pat Apple, the chairman of the Senate Utilities Committee.

House Bill No. 2201 (click to open .pdf) is the Senate-approved version of the bill. Since the Senate made changes it will have to return to the House for final approval or else go to a House-Senate conference committee if the House doesn’t accept the Senate’s changes.

It’s unclear how the bill might have changed the role of the Kansas Corporation Commission (KCC) who currently regulates telephone companies. Currently the KCC has the authority to ‘prevent fraud’ but the bill changes that authority to ‘investigate fraud’. It’s not clear if the KCC will have any authority to affect the behavior of a badly performing telecom provider, as is already the case with cellular companies today.

The bill also shrinks the Kansas Universal Fund, which is a pool of money collected from telephone customers in the state and that is used to support rural telephony.

The bill was originally authored by AT&T but was presented to the legislation with a united front by most of the carriers in the state. AT&T has lobbied for similar legislation in many other states. While Kansas is now the first state to effectively remove carrier-of-last-resort obligations, one would expect this to happen in other states. Telephone subscribers have been steadily dropping everywhere as consumers have shifted to cell phones and to VoIP carriers for their telephone usage.

What Do Households Want?

The telecom industry has spent decades bringing residential customers the products we think they want. This has resulted in the ubiquitous triple-play bundle of telephone, data and cable TV. But one has to only spend a little time with a Millenial to know that customers are no longer satisfied with what we have been selling them. While many customers are still buying the traditional products, more and more people are actively looking for alternatives.

And alternatives are showing up. I have one client who has been serving over 20,000 cable TV customers for many years. But for the last year they have been steadily losing 200 customers each month and it doesn’t take a lot of math to see that in a decade they won’t have any cable customers left.

So I am advising clients to start looking at delivering products that people want today and into the future. To help figure out what those products might be, I think you have to start by understanding what customers want today.  I offer the following list of I have made a list of what I think households want today from their telecom provider:

The ability to use multiple devices shared across multiple networks. Customers want to a variety of devices to access the web. They want to seamlessly move from desk top to cell phone to pad to TV to game box. Customers want to be able to move back and forth between the cellular and home WiFi network for voice. Anyone who can facilitate this ability will have an edge.

Faster download and upload speeds. Households want to ability to operate multiple devices at the same time. This requires faster speeds and in some cases QOS.

Mobility. Customers want mobility in both directions, both into and out of the house. They want to be able to start a phone conversation on a cell phone and seamlessly transfer it to a landline when they get home or to the office. They want to be able to access data and do work at home or wherever they are.

Choice of video. Customers want the option to buy only the video they want to watch. And they want to watch it on multiple devices.  

Security and alarm services. Many households want reliable alarm services. They also want to easily operate cameras they can watch remotely.

Integrated entertainment. Customers want to share entertainment content. They want to watch what they want in different rooms and on different devices. They want to be able to move seamlessly from TV to PC to pad to phone. 

Use of cloud-based services. As more and more data is stored in the cloud, customers want an easy way to access and manage the cloud.

The ability to make impulse purchases. Customers want to be able to buy a TV show, a movie, a song and then experience it immediately. People are shifting from buying large monthly subscriptions (cable TV packages) to buying entertainment in small doses.

Help making things work. Households are faced with a confusing array of possible technical solutions and they will value anybody who can make their video, computers, wireless networks and other devices work seamlessly together.