Category Archives: Improving Your Business

Work Force Management

800px-OSU_Bucket_TruckI don’t do a lot of specific vendor recommendation in my blog. But I ran across a software system that companies can use to bring a whole suite of useful tools to your field technicians that is affordable and easy to use. The product is called Service Proz. This software can be used as an add-on to any legacy OSS / billing system to make your field technicians more efficient.

Service Proz brings you the same kinds of tools used by big companies like FedEx. You can use any or all of the Service Proz features, making it very flexible to meet your needs. The program works by installing an app on a smartphone or tablet.

Following is just a sample of the features that come with the software:

  • Tracks the location and schedules of your field techs in real time.
  • Gives you the ability to communicate with field techs at all times (instead of getting voice mail).
  • Provides an easy clock system to log time spent at each customer.
  • Synchronizes with your OSS system to give your techs changes in real time.
  • Interfaces with Google Map to show the location and most efficient route to the next appointment.
  • Tracks inventory and hours in real time, meaning that techs don’t have to come back to the office and transcribe their hours and materials from a clipboard.
  • Allows a field tech to view a customer’s history. They can see a log of past trouble calls or other pertinent information to make their trip as productive as possible.
  • Allows you to transmit documents to the tech via cell phone or tablet. If a technician is missing a piece of paper, a contract or other key document you can get it to them immediately.
  • Allows for electronic signatures from customers that approves an installation or the purchase of an additional product.
  • Allows technicians to modify the work order on the fly. The best use of this is to allow a technician to upsell a customer to an additional product while at their premise.

Why should a company consider this kind of software? Maintaining and operating a fleet of field technicians is one of the biggest costs of operation for most carriers. This software brings a number of efficiencies to your field staff that is going to let them operate better – and time is money. They will be more productive at the customer site since they will have access to all of the documents they need to understand the customer’s situation. With Google Map they should save fuel by taking the most direct route to the next customer. And giving them the ability to upsell customers on the fly means that this software can pay for itself immediately. Probably the biggest advantage is that it can take paperwork out of the field tech’s life, providing them more time to interface with customers.

And it’s affordable. It costs $25.95 per month for the dispatcher and $10.00 per month per field technician. This seems like an incredible bargain. Competing software systems are going to charge tens of thousands of dollars up front for similar features plus require an expensive integration. I would think that the efficiencies in even the first month are worth far more than the cost of Service Proz, and this comes pretty close to a no brainer to me.

Don’t Be the Big Guys

Hurricane_Katrina_August_28_2005_NASALarge telco and cable companies took a pretty good beating in the press in 2013. There were tons of articles that don’t present them in a very good light. For all of my clients and friends in the industry who are not these large companies, I think it might more important right now to show your customers why you are not like the big guys.

Here are just a few things that made headlines this year:

  • Verizon said they would not replace the copper on Fire Island and parts of New York City that were destroyed by Hurricane Sandy and wanted customers to instead use cell phones.
  • AT&T told the FCC in a filing that they were planning on ditching ‘millions of access lines’ and wanted to transfer rural areas to cellphone-only.
  • The large ISPs, both telcos and cable companies came in at the bottom again on the national customer service satisfaction polls that measure the companies that the public most dislikes.
  • Almost every large carrier has been accused of handing over all of their telephone and email traffic to the NSA.
  • Cable rates had continued dramatic increases everywhere.
  • It was reported in California that telephone rates have nearly tripled since they were deregulated in 2008.
  • Verizon customers have accused the company of pressuring them to convert to FiOS and then not having access to older copper products.
  • All of these large companies announced record profits.

There is such a widespread dislike of these companies that we need to be careful that the dislike of them doesn’t wipe off onto the rest of us. In large cities many customer talk about holding their nose and picking the incumbent they dislike the least.

Unfortunately, some of my smaller telco clients have policies in place that also don’t win them any love in the marketplace. As an example, I ran across one company this year who would only accept customers who would pay with direct bank debit. I found another client who would only let somebody reconnect after being disconnected by coming in live with cash or a money order. I suspect many companies have policies that are not customer friendly. In the long run any such policy is going to cost you revenues and profits.

It’s easy to understand how such policies get started. Perhaps a company was having a high level of bad debt. But you can’t punish all of your customers for the behavior of a few (and in fact, you really shouldn’t punish anybody). I know personally that if I had to bring cash into my telco in person that they would never see me again, and I can’t be unique in this.

I think the constant bad headlines about telecom companies probably paint us all in a bad light. So I would advise that you take a fresh look at your company and figure out how you are going to let your customers know that you are not the same as the big guys. You may assume they know this, but these is a very good chance that they think of you just as the phone or cable company and that over the years you have done something to annoy many of your customers.

So take this new year as an opportunity to think about how you tell your customers who you are. Certainly you can always tell them with your actions, but it never hears to remind them in other ways. So what do you want your customers to most know about you? Figure out a way to get out that message.

Lessons to Learn from Google

GooglelogoGoogle has been one of the most successful companies in the US over the last decade. And their success is not random or lucky; they do some things that all companies can learn from. Obviously a lot of Google’s success comes from their size and market recognition, but there are a lot of things that they do right that lets them continue to thrive. Every telcom in the US ought to look at the following traits of Google and think about how you can integrate these ideas into your company.

Keep It Simple. Google has always strived to boil every product they have down to the simplest presentation for customers. It started with the Google search box which was nothing more than an empty square and consumers quickly got it. But they do this with other services as well. In Kansas City they sell very high speed data and two cable TV options. That’s basically their telecom portfolio. I’m not suggesting that we all limit our product line to just two things, but rather than you consider making your products as easy to use as possible for your customers.

Measure Performance. One thing Google always does with any product it launches is to gather as much data as possible about how the product performs. They wants to know why and how people use a product. They want to know what people like and don’t like about it. In order to emulate this trait a company has to go beyond simple customer satisfaction surveys and talk to customers in detail about how they perceive your product and your company. If a company as large as Google can know how their customers are using their products it ought to be possible for companies in smaller markets to this even better.

Innovation. Google is never satisfied with any product and they always are poking and prodding and seeing if they can make things better. Part of this is due to the last item above where Google takes customer feedback into consideration. But if you are going to copy Google you are going to want to always be kicking the tires on what you are doing so that your products don’t become stale and inflexible.

Empowers Employees. Probably the one single trait that Google has done is to empower employees to bring them new ideas. They take this to a larger extreme than many companies can afford and they give employees the opportunity to spent 20% of their time exploring projects that are outside their main focus. Employees are not required to do this but many of them take advantage of this and have been the driver behind many of the new Google products. Every company has the ability to empower your employees to make and implement changes that can make the company better.

Willingness to Admit Failure. Google does one thing that many companies are afraid to do. Google is ruthless about admitting failure and they ruthlessly eliminate products that are not profitable. Without slipping into too much of an adage, companies need to know when to fold ‘em.

Satisfy Customers. Google is really good at satisfying customers. They elicit feedback and they really listen to what their customers tell them. Every company can learn this simple lesson – give your customers what they want and you will thrive.

Build It and They Will Come

This is the baseball field featured from the 1...

This is the baseball field featured from the 1989 movie Field of Dreams. This photo shows the field as seen from the bleachers that Kevin Costner’s character Ray Kinsella built at the beginning of the movie. (Photo credit: Wikipedia)

Over the years I’ve seen a number of networks built where the service provider didn’t really know how many customers they might get. I always called this ‘build it and they will come’ because they invested money into an expensive new network with the hope that sales and marketing efforts would somehow make the new venture profitable.

Sometimes this has worked and sometimes it has resulted in spectacular failures. In looking at the failures, I see that every one of them exhibited some degree of “build it and they will come”. There are a number of reasons why a telecom venture can fail, but the number one reason is not getting enough customers. The second most common reason is doing a poor job and not retaining customers after they have been signed.

You can’t always avoid ‘build it and they will come’. For example, if you are building a business-only telecom company in a larger market, there is no amount of research that is going to tell you ahead of time how you will do. Selling to business means slugging it out face-to-face with consultative selling and your success is going to ultimately going to come down to your ability to sale and the performance and the reliability of your network and your customer service staff.

But there are steps you can take that will help assure success in smaller communities or with business plans that include a lot of residential customers. Historically you could get pretty good market data using well-designed customer surveys. I wrote an earlier blog discussing why surveys are no longer a reliable took and I won’t repeat that whole argument here. In a nutshell, the fact that most homes no longer have a landline telephone has killed the ability to do a believable random survey in a small market.

So, if you can’t do a survey you can believe, then how can you know ahead of time how well you will do in a given market? If I was investing in a new venture today I would only commit the investment if I had pre-sold enough customers to assure myself of success. There are a number of ways to do this:

Strong Market Name. If you have strong market name recognition in a new market then you can get potential customers to pledge to your new network. This is the tactic used by Google in Kansas City. They have a strong enough name recognition that they could rely on customers to pledge that they would buy services if Google built to their neighborhood. Certainly every customer who pledges doesn’t follow through, but most of the do, and so, if you have a good market name, then some sort of a pledge campaign is probably good enough to give you assurance.

You don’t have to be Google to have a good name recognition. For example, a municipal provider might have a good name in their own City if they already do a great job in selling water, power and other utilities. In smaller towns a local nearly telephone or cable company might have a good enough name that most people in town know them and want their service. And in parts of the country where cooperatives are prevalent, a neighboring coop can have tremendous name recognition.

Canvas the Area. If you don’t have great name recognition, or if you are an unknown start-up, then you most effective technique is to do a door-to-door canvas and talk to everybody in the proposed service territory. That sounds expensive, but it is not nearly as expensive as building the network and then finding out that nobody wants to buy from you. A canvas is essentially a survey, but when you knock on most of the doors you overcome the limitations from a poorly designed survey and you can believe the results of a canvas if it is done correctly.

You also have to consider a few other issues such as if you want to take a deposit, and if so, will that deposit be refundable in the future. Taking deposits will eliminate some people from signing up, but you can feel pretty secure about building a network to people who ponies up money ahead of time – they want your service. If you really want to be sure before you build, make potential customers sign contracts. Just beware that such an effort is very labor intensive and will take a long time.

The days are gone where you can build a network and just assume that your marketing skills will make you successful. You need to put the marketing effort in up front, before you commit to the build. Only then can you have a good assurance that your new venture has a real chance of success. Anything less than that is a crap shoot.

Should You Have a Data Cap?

data recovery

data recovery (Photo credit: Sean MacEntee)

Over the last few years most of the cable companies and some telcos have implemented data caps on high-speed Internet access. They always claimed that caps were necessary to help protect their networks from congestion. They claimed that heavy users would clog the networks and make data speeds slow for everybody else. But as someone who sees hundreds of networks, this claim holds no technical validity, except in some isolated instances and in some parts of some networks.

Michael Powell, the head of the National Cable and Telecommunications Association admitted publicly last week that caps are not about congestion, but rather are about ‘pricing fairness”. In the telecom world there is a general rule of thumb that the most active 15% of your users will use 85% of any resource, be that minutes, data, etc. And it’s a pretty good rule of thumb. If cable companies had come along and lowered prices for the 85% who are not heavy users and then made up the difference on higher rates for the 15%, then his argument would resonate with the public. But nobody saw any rate reductions and it’s hard to see data caps as anything more than a way to make even more money from data service.

One has to just note that the US has some of the highest-priced Internet services in the world to poke holes in NCTA’s announcement. If you compare US rates to the Far East or Europe it is easy to see that our rates are way out of line on a cost per megabit of service available to customers.

To make it worse, cable companies are starting to raise data rates. And this follows a ten-year period where the underlying cost of raw data has gotten cheaper every year. When a cable company set a monthly rate of $40 or $50 a decade ago, during that decade the cost of buying wholesale access to the Internet has probably dropped by 90%. It’s my opinion that cable companies know that in another decade that they are going to mostly become ISPs since cable and telephone are both dying products. They are starting to creep the rates up now to hedge against the day when that is their only product.

But even assuming that our rates are too high and that profits are really high, should any ISP consider any sort of cap or limitation on how customers use their data. I think the answer is yes, and it is not for any of the reasons that the cable companies have given.

Using my metric, 15% of the users on a network create most of the data usage. But absent any rules on how the network can be used, a small number of them could be using most of the usage for that group. For example, customers who operate servers and operate ecommerce site or other very busy sites like a pornography server can use huge amounts of data on the network. Much of that data is sent in the upload direction and doesn’t cost as much for a carrier as downloaded data, but a few such sites actually can clog a part of the network if they are busy continuously. The way around this problem is a prohibition against using servers on a basic residential data product. But if you are going to have this kind of policy you also need to have some way to measure how much data each customer is using.

On the download side of the equation, there are always a few customers who abuse any system. There are internet hoarders just as there are hoarders of anything else, and so you might want to set a cap that discourages continuous downloading. Comcast has implemented data caps of around 300 Gb in a lot of markets lately. If a customer downloads movies at a very high quality rate, they can use around 2 Gb per hour. If they watch non-HD movies it’s about half of that. And so a 300 Gb data cap would limit people to watching 150 hours of HD programming or 300 hours of normal programming per month. That works out to a limit of 5 hours per day or HD programming or 10 hours per day of normal programming. That may seem like a lot, but if each person in the family is watching their own programming, that is a really small limit.

I have advised my clients to institute a fairer cap, but to still have one. For instance, a cap set at 1 Tb (1,000 Gb) allows for over three times the usage than the Comcast cap. Anybody going over a 1 Tb cap is likely a data hoarder because that requires somebody to be downloading video more or less continuously every day of the week. Every network has a different configuration and so this is not a hard and fast limit. But I suggest some limit on data, at a very high rate that will only affect a truly small handful of people. The Comcast rate is set to make any family who actually uses their bandwidth to pay more. My suggestion is to set a cap that stops bad abuse, while giving people what they have paid for.

How Long Should it Take to Pay for a New Asset?

Ladder Racks

Ladder Racks (Photo credit: dmitrybarsky)

One common question I get is “How does a company determine how long it should take to get back a capital investment”. I get this question concerning all types of investments – the investment to add one customer, the investment to add a new product line, the investment to expand to a new town. While the answer is different for every company, the way that you look at the issue is the same for everybody. I think you need to look at the following factors in determining what is right for your company.

Revenue Generated. It’s easier to answer this question if you are building an asset that directly contributes to generating a specific new revenue. For instance, if you build to a new customer’s house or build to a cell site, the revenues from that new location can be directly attributable to the assets being added. But things aren’t always this clear. For instance, you might be adding a new router that contributes to many existing revenues as well as enables some new ones. Or you might be doing an upgrade on a cable headend that will make the product marginally better but that will probably not attract new customers. The more direct the relationship between a revenue stream and an asset, the easier it is to talk about paying for that asset.

Margin Generated. Once you have determined the revenues associated with a given asset, you then want to look harder at the margins on those revenues, because it is only the margins that can be used to recover the cost of the assets. For example, if you pay 50% of you cable revenues for programming, then you only have the remaining 50% of margin left that can be used to recover the cost of an asset that is used to supply cable TV. I very often see companies be too simplistic and say such things as a new revenue will pay for itself in two years. But when you look at the facts they often mean that they will generate enough gross revenue to equal the cost of the asset, but that is not the same as having generated enough margin to actually have recovered the cost of the asset.

Financing Term. If an asset is financed with debt, then you can stretch the recovery of the asset for as long as the term of the debt if you want to. That may not be the best business goal, but you don’t really pay for the asset until you make the debt payments. One thing that is important though, is that if you finance an asset you need to add the interest and other financing cots to the cost of the asset.

Contract. Sometimes you will have a contract specifically designed to recover the cost of an asset. For example, if you build fiber to get to a cell tower and get a 5-year contract bandwidth at that tower, then ideally the revenue generated at the tower will pay for the asset within the five year term of the contract. You should think about breakeven and profitability as if the contract will not be renewed.

Churn. Companies often fail to consider churn in looking at the recovery of assets. For example, supposed you are building a fiber network to a new town, and further suppose that you have a 10% churn of customers each year. In such a case, you need to factor in this churn in looking at whether you can recover the cost of adding drops and electronics to customers. While you may have some customers who will last ten or more years on the network, there also will be customers who drop off in the first and second year and will strand some of your new investment without any compensating revenue stream.

Tolerance for Risk. This is the most intangible item on the list, but often the most important. It is important for each company to be realistic about their tolerance for risk. For example, a company that doesn’t have much access to debt and which must pay for new assets out of current cash flows has a much lower tolerance for risk than a company with deep pockets or an open credit line. The first company really cannot afford to make any mistakes in rolling out new investment and they also need to recover any investment made faster than the second company.

A company needs to take all of these factors into consideration. There is no industry-standard answer to the question, but there is a right answer for everybody. A lot of the answer comes back to the last bullet point – in your company, when are you going to need the cash back from an investment in order to make another investment?

The Real Cost of Money

Money cash

Money cash (Photo credit: @Doug88888)

I have often heard it said that municipal bonds are cheaper than bank loans. This is an argument rolled out by incumbent telephone and cable companies all of the time when they are trying to stave off competition by a municipal provider. Many times I’ve heard the argument that governments have an unfair advantage over commercial firms in that they can raise cheaper money through bonds.

But I have been recently working with some municipal entities and also some public / private partnerships and I think that argument is dead wrong. It looks to me like bond money is some of the most expensive money in the market.

It’s always been easy to make the argument that government money is cheaper due to municipal bonds having lower interest rates. And that is true. Historically municipal bonds have had lower interest rates. There has always been a spread between bond rates and commercial lending rates and bond rates almost always have lower interest rates. But interest rates are not the only cost of money, and so to make a comparison between the two kinds of borrowing based only upon interest rates is not telling the real story.

There are numerous other costs associated with borrowing large amounts of money. It’s easy for the average person to be able to think of loans in terms of interest rates, because when somebody uses a credit card or buys a car there are no additional costs of money other than the interest. But when somebody wants to borrow large amounts of money like what is needed for a major telecom project, then there are extra costs, much in the manner that there are closing costs when you get a mortgage on a house.

The true cost of money is the costs incurred to borrow the money and to administer the payback. Following are examples of some of the extra costs associated with borrowing large amounts of money:

  • Application Fees. For a large borrowing there is typically the requirement for a business plan. But bonds also require an additional document be prepared that is the equivalent of an offering document when a commercial firm sells securities. These documents can come with a significant cost, in the hundreds of thousands.
  • Legal Fees. Both commercial and municipal borrowing include legal fees. But the legal fees associated with bond financing are generally much larger than the costs associated with a commercial loan. Bonds are more complicated, and in some cases can be contested by the public, so there is a lot of additional due diligence done for bonds to make sure they will succeed. And if the bonds are challenged legally there can be a huge legal cost.
  • Referendum Costs. Many kinds of bonds require a vote of the public to be approved and getting a bond question onto a ballot can have a significant cost, particularly if this is not done at the time of a major general election.
  • Capitalized Interest. Bonds generally hand over the entire amount to be borrowed on day one. The bond borrower then has to pay interest on the whole balance from the start of a project. If the revenues associated with a bond don’t start right away (like with telecom projects), then it is typical for the borrower to have to borrow the first two to four years of interest payments. This can significantly increase the cost of the borrowing. For example, on a $50M project, capitalized interest can range from $5M to $10M, which is a 10% to 20% adder to the cost of the project. Commercial loans generally us a construction method where the borrower only draws the loan as it is needed, which greatly reduces the early year interest costs.
  • Debt Service Reserve Fund. Many bonds also require a debt service reserve fund. This is an amount of money set aside to pay bondholders in case the borrower is unable some year to make the full bond payments. It’s not untypical for this to be set at a full year’s interest and principal payment, adding another 3% to 5% to the total cost of the borrowing.
  • Bond Insurance. Some bonds also require bond insurance. This is an amount paid up front at closing to an insurance company that will guarantee some payments to bondholders in case of a default. The insurance rates typically run 1% to 2% of the total project.
  • Escrow Fees. Almost all bonds, and some types of commercial loans require an intermediate escrow company to gather payments monthly in order to make periodic payments to bondholders of lenders. Additionally escrow companies are used to hold money such as the debt service reserve funds or capitalized interest.
  • Reporting and Administration. Most large loans have costs of reporting results to the borrowers in some manner.

When considering all of these costs it is not unusual for a municipal telecom project to have much higher financing costs than an equivalent commercial project. When considering all of these costs it’s not hard to find municipal projects where the total cost of financing is 12% to 18% of the project. It’s rare to find a commercial loan these days where the all-in costs even hit 10%. I’ve recently seen some public / private partnership deals where bringing in commercial money has greatly lowered the cost of borrowing compared to traditional bond financing. So forget interest rates. It’s the whole cost of getting and paying back the money that matters.

Public Private Partnerships

p-3Today’s blog is talking about public / private partnerships (PPPs). This is an area of the telecom world where I see the potential for significant growth in the next decade. Increasingly, rural towns and counties are looking at their inadequate bandwidth and are clamoring for something better. Generally such communities just want somebody to bring them bandwidth. But when nobody steps up to do that, many of them are now taking steps to do it themselves.

And there lies the opportunity. There are very few communities that want to be in the telecom business. Most of them are in the water and sewer business and some of them have municipal electric companies, but these are all monopoly businesses. Most cities are very uncomfortable when looking to enter a competitive business. Given a choice they want somebody else to be in the bandwidth business and will only take that path if they see no alternative.

It’s a natural reaction of a local cable or telecom company to look at communities that are building fiber systems as threats, when instead they are opportunities. You can’t blame them for wanting adequate broadband. They look around the country and see that rural America is becoming a world of broadband haves and have-nots. Most urban areas now have decent broadband, but many rural areas still no or slow broadband that putting their citizens and businesses behind the rest of the country. While the FCC may define broadband as starting at 4 Mbps download, this is totally inadequate for a household today and certainly doesn’t cut it for the business community. Communities that don’t get enough broadband are worried that they will become irrelevant. Their populace will slip away. Kids won’t stay in the area when they graduate. Being on the wrong side of the broadband divide is a scary place to sit today.

My advice to small telcos and cable companies is that you ought to be the first one in the door to these kind of nearby communities offering to help them to find a solution. And if these communities are in your own service territory you need to listen to them – because if you won’t help them they will find a way to get what they feel they need.

Communities that feel strongly enough about bandwidth are generally willing to contribute money to bring a solution, and that creates an opportunity. I know of one community that went to an ILEC and said that they would be willing to pay for a fiber network in their town, have the ILEC operate it, and then hand it to the ILEC for $1 when the financing was retired. Incredibly, the telco turned down this opportunity (which still has me scratching my head).

There are a number of successful business plans that I have seen for PPPs between cities and local ILECs. Consider the following:

  • Operator Only. The municipality can build a network and then hire somebody to operate it. Operating another network can create a good new long-term revenue opportunity for a telco because it lets you leverage your existing backoffice and technical staff and to turn some of their time into revenue.
  • Building a Project Jointly. Another option is for both parties to make an investment. This can be a tricky option to make work because this makes you a financial partner with a City. It is vital under this kind of arrangement that both parties fully understand the other’s goals and motivations for being in the business because it’s hard to maintain a partnership where the partners have different goals. This kind of arrangement also calls for some creative financing since you are likely marrying commercial loans and municipal bonds. But there are many examples of this kind of opportunity working.
  • City as an Anchor Tenant. Under this scenario the ILEC will build the network, but you would have the City, the schools and other key broadband customers sign on as long-term anchor tenants to help assure you of the revenue stream.

If you are in a rural area the chances are that these opportunities are all around you. Telcos tend to think about expansion in terms of how much money you are able to borrow to build new networks and grow. But by looking at PPPs you can leverage your borrowing power with the borrowing power of the municipality and together you can build more, and faster than either of you could have done on your own.

I have been in a number of partnerships myself and have seen some that work great and some not so great. But generally if partners are realistic about what they need to achieve it can be made to work well. Getting the financing and governance right are essential so as to head off future problems before they happen. At CCG we probably have more experience in creating these kinds of PPP arrangements as anybody in the industry and we can help you do this right.

A New Internet

A Wikimedia server room.

A Wikimedia server room. (Photo credit: Wikipedia)

A research group in Europe has proposed to overhaul the way the Internet looks for data. The group was funded as part of a project called ‘Pursuit’ and their ideas are described in this Pursuit Fact Sheet.

The proposal involves changing the way that the Internet searches for data. Today searches are done by URL, or Universal Resource Locator. What URL searches do is to identify the original server that holds the desired data. When you do a Google search that is what you find – the address of the original server. The problem with looking for data this way is that everybody looking for that same data is going to be sent to that same server.

There are several problems that are associated with searches based upon looking for the original server that holds a piece of data. It means that everybody looking for that data is sent to the same server. If enough people look for that data at the same time the original server might crash. The original server can also be effectively shut down by denial of service attacks. And sending everybody to the original server is inefficient. If the original content everybody is looking for is a video, then that video is downloaded to each person who asks to see it, if you and your neighbors all decide to watch the same video, then it is downloaded individually to each one of you and will be sent through the Internet many times.

The Pursuit proposal is suggesting that we instead change the Internet to use URIs (Universal Resource Identifiers) to search for data. This kind of search is going to look for the content you are looking for rather than for the server that originally stored the data. So if you are looking for a TV show, it will look to see where that show is currently stored. If somebody in your local network has recently watched that show then the data is already available locally and you will be able to download it much faster and also not have to initiate a new download from the original server.

This is somewhat akin to the way that file-sharing sites work and you might be given a menu of sites that hold the data you are looking for. By choosing the nearest site you will be retrieving the data from somewhere other than the original server. The closer it is to you (network-wise, no geographically) the faster and more efficiently you will be able to retrieve it.

But more likely the retrieval will be automated, and you may download the content from many locations – grabbing a piece of the desired video from the different networks that currently hold that data.

This is not a new concept and networks that use switched digital video have been using the same concept. In those systems, the first person in a neighborhood node that watches a certain channel will open up a connection for that channel. But the second person then shares the already-open channel and does not initiate a new request back to the TV server. This means that a given channel is opened only once for a given node on the network.

There are huge advantages to this kind of shift in the Internet. Today the vast majority of data being sent through the Internet is video. And one has to imagine that very large numbers of people watch the same content. And so changing to a system where a given video is sent to your local node only one time is a huge improvement in efficiency. This is going to take the strain off of content servers and is also going to relive a lot of the congestion on the Internet backbone. In fact, once the data has been dispersed the Internet the original server could be taken out of service, but the content will live on.

There are some downsides to this kind of system. For example, one often hears of somebody pulling down content that they don’t want viewed any longer. But in an information-centric network it would not matter if data is removed from the original server. As long as somebody was recently watching the content it would live on, independent of the original server.

There are a lot of changes that need to be made to make a transition to an information-centric web. This is going to take changes to the transport, caching systems, error control, flow controls and other core processes involved in retrieving data. But the gigantic increase in efficiency from this change means that it is inevitable that this is going to come to pass.

Make Being Local Work for You

market 1

market 1 (Photo credit: tim caynes)

Today’s guest blog is written by Mindy Jeffries of Stealth Marketing. She will be writing a series of blogs that will appear here occasionally. If you want to contact Mindy you can call her at (314) 880-5570. Tell her you saw her here!

I look at small telephone companies and as a marketer I see tremendous marketing potential due to their advantage of being local. I would have a blast with marketing in these markets. Here are the questions I would ask myself and my team:

  • What is going on local in my community?
  • Can I create something that would be a resource to my community?
  • What could I do to bring my community together in the new virtual world? What could you do that is useful from the customer’s perspective?

I would find something the community needs, such as listing of local events and get it on the web. Then, using social media you have to advertise news of the local application that you have created and the content within.  This will start bringing people to your site to check out the latest news on what to do around town or the weather or whatever you choose.

Once you get your current and potential customers coming to your website or social media site for useful information, then the next step is to ask them for their email addresses. At this point, you don’t care if these people are customers or not, just provide each person with useful information. As you create value, your prospects and potential prospects will give you their information including email addresses because they want to interact with you.

Then you start housing this information in a database application that can automate, score and deliver very customer-specific news and offers to your prospects and current customers.  Your prospects get offers for new services, and your current customers get retention offers, or news on programing or movies or VOD coupons.

Start simple, but there are lots of ways to take a program like this to the next level.  You can incorporate your advertising clients and distribute their offers as well. This could be your retention program!  Some examples might be coupons for the pizza provider in town or coupons for the local theater.

Your imagination can run wild, but today digital environment exists to help you organize and filter messages and marketing.  Social media have changed the world.  Instead of always talking about you and your services, you need to look at the world through a customer/potential customer lens and asking the question from their perspective – what can I do through the resources I have, to make myself useful to them?

It’s an exciting times to be a marketer!