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Current News

What is Behind the Aereo Controversy?

Image representing iPad as depicted in CrunchBase

The Aereo ruling on April 1 certainly has the cable industry in an uproar. In that ruling a federal appeals court upheld a lower court ruling that Aereo’s wireless streams to customers are not a ‘public performance’ and thus do not constitute copyright infringement. On Friday Glenn Britt, the CEO of Time Warner, said that his company was considering pulling the broadcast networks off of his cable TV systems and sending them to customers over a radio in the same way that is being done by Aereo. And recently, in response to the Aereo ruling the broadcast networks threatened to pull all of their content off the air and move their programming to cable TV. So what is up with Aereo, and can these companies do what they have threatened?

Aereo has an interesting product that seems to have found a market niche, at least in New York City where it is now operating. Aereo sets up a radio link to each customer and sends them a 28 channel packagethat includes the major networks, some other low-cost networks and some spanish and asian-language channels. Aereo can be installed on any Windows or Mac computer and can then be streamed to iOS devices like the iPhone, iPad or Apple TV. It can also be made to work with a Roku box. And one would imagine it will soon be made to work with other pads and tablets. The service also lets a consumer record some programming for later playback. The pricing is cheap compared to cable TV with a $1 per day plan, monthly or annual plans, including a monthly plan for $8 that lets a customer watch everything live plus record and play back 20 hours of programming per month.

Why does this controversy even exist? Can’t people just receive the broadcast networks over the air? On June 12, 2009 all full-power analog television transmissions ended and starting with that date the full-power television stations, which include all of the major networks like ABC, CBS, NBC and Fox could only broadcast in digital. Customer now need a Digital Television Adapter (DTA) to receive the signals and any home that is near to a station can receive it for free. But it is not easy for the average consumer to get these signals from the TV to mobile devices, and Aereo’s real marketing niche is providing signals to computers, iPhones and iPads.

Why are Time Warner and the cable companies so stirred up over Aereo? Aereo seems to have found the niche of people who want to watch mainstream programming without being tethered to their TV. If Aereo was limited to New York City this probably wouldn’t be a huge deal, but they have announced that the service is coming to 22 other major markets in 2013.

As is the case with all big business controversies it all comes down to money. In the 1992 Cable Television Consumer Protection and Competition Act, Congress required that all cable operators obtain the permission from broadcasters before carrying their signals on their cable systems. For a while this permission was granted for free, but in recent years the broadcasters have asked for significant fees and it is not unusual to see each local broadcast network charging $1 or more per customer per month for retransmission consent. So a cable system now has to pay that much each for ABC, CBS, NBC and Fox, and in some markets multiple stations of some of these. This has driven large increases in cable rates and is now a point of huge contention between broadcasters and the cable companies.

The broadcasters are angry that Aereo is able to bypass their fees since retransmission fees currently make up as much as 10% of their revenue. And the cable companies are angry that Aereo has gotten out of paying the same fees that they must pay. And they are worried that Aereo will accelerate the trend of customers who are ditching traditional cable TV in favor of programming from the web and elsewhere, the trend referred to as the cord-cutters.

Can Time Warner really do the same thing that Aereo is doing? Certainly Time Warner or anybody could form a company that does the same thing as Aereo and compete with them. Such a company could sell the same sort of line-up and do it using radios like Aereo has done. But they first must recognize that it’s important that Aereo is using radios because this is what allows them to not be a cable TV company, which is defined as somebody who delivers cable content using cables. So Time Warner would have to use radios also. And Time Warner is still hoping that the Supreme Court will look at the issue so it’s not entirely certain that Aereo, or anybody, has the legal last word that this is okay.

So Time Warner could establish an Aereo-clone company and do exactly what Aereo is doing. But they could not do this as an alternative to putting the network channels onto their cable system. In the aforementioned 1992 Cable Act, Congress set forth the rules for cable systems to carry broadcast channels, referred to as the must-carry rules. Congress said that a cable system with 12 or fewer channels must carry at least three local broadcast channels. Larger cable systems must carry all local broadcast channels, up to a maximum of 1/3 of their system. This means that Time Warner could not pull the local broadcast networks off of their cable and deliver it in a different way. But Time Warner could probably sell an Aereo-like product to somebody if that is the only product they sell to that customer.

Finally, can the broadcast networks pull their signals off the air and move them to be cable only? I can’t think of any reason why not. At that point they would no longer be a broadcaster and they would avoid all of the FCC rules applicable to over-the-air broadcasters. But if they do this they would become like any other cable network, and so ABC would be treated the same as HBO or TBS or any other cable network. It is likely that such a change would infuriate Congress since around 15% of the people in cities still receive free TV over the air. There would certainly be political repercussions from a broadcast network deciding to become just another cable network. For instance, might they lose their ability to carry professional football?

At the bottom of this controversy are huge dollars and also the underlying fear of the cable industry that Aereo is one more factor that is accelerating the bypass of their systems. It seems like Aereo might be in a similar position to MCI back when they broke the long distance monopoly. Aereo has stuck a sharp stick in the eyes of both the cable companies and the broadcasters and there is one hell of an interesting fight yet to come.

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Improving Your Business What Customers Want

Value Added Selling – The Only Way to Go!

Customer Service Think Tank hosted by Dell (Photo credit: Dell’s Official Flickr Page)

Today’s guest blogger is Mike Fox. He was one of the founders of CCG and we still work together on a number of projects. Mike is working at Fox Management Advisors and can be reached at (307) 431-6543.

In my last blog I discussed how it is important for your customers to make an emotional attachment to your brand.  You want them to think of you first when they are in the market for any telecommunications product or service.  A corollary concept is for you to focus on adding value to everything you sell.  Many telcos are order takers.  By that, I mean that they sell a suite of products that customers know and understand.  The customer is already sold. This has been the nature of the telephone business for many years.  Furthermore, for a long time, customers really had no choice but to call the telephone company when they wanted telecommunications services. So, we all got into the mode of order taking rather than selling value.

But, the world has changed in this regard (as you well know)!   The telecom world has entered a new age.  Residential customers are dropping traditional voice (landline) and video (cable TV) services at an alarming rate. Businesses are no longer happy with just vanilla voice lines or trunks. The successful communications company of the future must sell products that are different from what they sell today. These products must be attractive to the new generation of customers.  This will force many companies out of their comfort zones.  How (and what) do you sell to customers who only want broadband from which they will tie in various Over The Top (OTT) devices like Roku?

Are there additional revenues beyond simply providing the Internet pipe?  Of course there are, but they may be harder to identify and even harder to monetize.  This might mean selling products like IP Centrex, cloud services, SIP trunks, unified communications, advanced security, transparent LAN, MVNO wireless or a host of other new products. And a decade (or less) from now it will mean selling products that we haven’t even envisioned yet.  Some smart guy or gal is in their garage as I type thinking up the next “killer app” for our industry.  We just have to be ready to sell our customers on the value of this new product. Not just on the value of the new product, but HOW the new product will be valuable for them.

Selling a new product that customers don’t fully understand requires different sales skills.  You need to educate the customer on the benefits of the new products – i.e, consultative sales, which is quite different from order taking. Consultative sales means sitting and understanding what the customer most needs, and then offering a package from the suite of possible products that best fits the customer’s needs.

Actually, the very first step in selling a new product is for you to understand the VALUE PROPOSITION of each product in your portfolio. The value proposition means knowing how a product will benefit the customer. You cannot sell new products just by showing that they are new; unfortunately, many sales people take this approach and try to sell the ‘cool’ of the new product rather than the value. You have to show the value and make the customer understand how this new product or service will make their life or business better.

Finally, in order to understand the value proposition you must know your customers well. As I said in my previous blog, make them part of the club. Get to know them, and encourage them to get to know you and your company. Basically, you need to get out and talk to your customers.  Find out what they are looking for, what excites them, and what their needs are both now and in the future. Once you understand those needs you can craft products and services that will provide what your customers want; and you will have built the foundation to support a strong, loyal customer base.

Categories
Technology

How Much Bandwidth Can a Cable TV System Deliver?

Cut showing the composition of a coaxial cable. (Photo credit: Wikipedia)

There are a number of techniques that are available for a traditional cable TV network to upgrade the bandwidth on the network available for customer data. If you are operating or competing against a cable TV system you should recognize that there are a number of upgrades that can when combined can drastically improve data speeds. Each of these upgrades comes at a cost, but you can’t discount the technical capabilities of an HFC network if data delivery becomes the primary goal of the network.

  1. Increase System Bandwidth. An example of this kind of upgrade is when a system is upgraded from 750 MHz to 1,000 MHz (or 1 GHz). This upgrade provides more bandwidth by widening the frequencies that are available on the coax. A system bandwidth can be a major upgrade and can involve replacing all of the power taps in the system, and in some systems even requires replacing the coaxial cable.
  1. Reducing Node Size. A node in an HFC system is a neighborhood of homes and/or businesses that share the same bandwidth. Typically there is fiber built to a node and then coax cable from the node to each customer. Historically, before cable modems, nodes were large, often at 1,000 homes or more. But many cable companies have deployed more fiber and reduced node sizes and some cable companies now have nodes in the 200 customer range. Making smaller nodes creates smaller pools of shared bandwidth, meaning there is more bandwidth available to customers at peak times.
  1. MPEG4 Compression. A lot of cable systems still use a compression technique known as MPEG2. This technology is used to compress the digital channels on a network today so that up to ten digital channels will fit into one 6 MHz analog slot. But with MPEG4 as many as 20 digital channels can fit into the same 6 MHz slot. The biggest issue with this conversion is that older set-top boxes won’t recognize MPEG4.
  1. Deploy DOCSIS 3.0. DOCSIS 3.0 is a bandwidth management technology that allows a cable modem to use a larger window of RF frequency for data. The way this works is that a cable system can ‘bond’ multiple channel slots together to that the cable modems can use more than one 6 MHz channel slow for data.
  1. Migrate Analog Channels to Digital. A cable provider can gain some bandwidth space by migrating analog channels to an existing digital line-up. There are often contractual requirements with programmers that make this difficult to achieve. However, as mentioned above, as many as 20 digital channels can fit in the same sized slot as an analog channel. There are always customer issues to also consider since this kind of conversion will shrink the analog offering and expand the digital tiers.
  1. Full Digital Conversion. In a full digital conversion all channels are converted to digital. Once completed, every customer needs a set-top box or other device in order to decode and view channels. There is now a device called a Digital Television Adapter (DTA) that is less costly than a set-top box that can support a customer remote. It is possible to send the ‘basic’ channels through the network un-encoded so that customers with a digital QAM tuner in their TV will be able to see these channels without a DTA.
  1. Deploy Data QOS. This technique does not increase system bandwidth, but rather allows the cable provider to sell faster data to some customers by allowing those customers to use a frequency allocation that is only used by these faster data customers. For example, Comcast advertises 100 Mbps service in most large cities, and they would deliver that kind of speed by giving the 100 Mbps customer priority over other customers in the node by having those customers send their data over a lesser-used frequency on the COAX. Of course, as the priority customer gets more bandwidth, everybody else in the node gets degraded service, and if too many premium services are sold then even the priority customer can’t get the promised bandwidth. But this technique does allow the cable company to selectively compete against fiber for selected customers willing to pay for the extra speed.
  1. Convert to IPTV. This conversion would allow a cable system to use more of the RF frequency on the network for bandwidth. On an IPTV system the programming, voice and cable modem service are all sent over shared bandwidth. An IPTV conversion does not automatically gain a lot of extra bandwidth and any savings come from the fact that the company does not have to broadcast all channels to all nodes all of the time, but rather can just those channels that somebody in the node is watching. There is a benefit, but it is not as large as the extra bandwidth gained by other strategies.
  1. Higher Spectral Efficiency. This technique involves converting to DOCSIS 3.1 and also changing the system modulation techniques. The traditional modulation technique is called QAM (Quadature Amplitude Modulation) and uses a 6 MHz frequency allocation.  The new technique is ODFM (Orthogonal Frequency Division Multiplexing) which uses a higher QAM modulation.  Where Current DOCSIS capabilities achieve approximately 6.3 bits per Hertz, DOCSIS 3.1 can achieve 10 bits per Hertz. New modulation techniques can create much larger bandwidth slots and can at the same time increase the bits to Hz efficiency of the frequency being used. In effect, this technology turns the cable system into a DSL system, with the difference being that there is more frequency available on a coaxial cable than is available on a telephone copper cable, but that a CATV node is then shared by multiple subscribers.

As can be seen, a cable company has a lot of options to increase bandwidth. So, how much bandwidth can be delivered? There are a lot of cable networks that have been upgraded through step 7 above. These systems can support some selected customers up to 100 Mbps download. But these systems probably only support 30 Mbps for all subscribers if the nodes are small enough. A system that is upgraded through step 8 can probably deliver 50 – 60 Mbps to most customers with selected customers being able to get much faster speeds. But a full upgrade to through step nine would allow a cable system to match the overall bandwidth delivered by a fiber PON system, although it is then shared with a lot more customers.

These upgrades are expensive. But if you are competing against a cable company, don’t assume that they are incapable of delivering very decent internet speeds if they are willing to make enough investment in their network.

If you have questions or want to discuss this further call Derrel Duplechin at CCG at (337) 654-7490.

Categories
The Industry

Open Access: Europe versus the US

When cities build fiber networks in the US, one question they always ask is if they can make their system open access. By this, they mean that they want to build a fiber network, but they prefer not to be in the telecom business and instead would prefer to attract multiple providers to the network to use the fiber and compete for customers. The cities just want big bandwidth for their citizens and most cities would prefer to not compete in the telecom business.

Open Access works well in Europe but has been a failure in the US. Why does it work there and not work here? The main reason it works in Europe is that a number of high-quality service providers are willing to use somebody else’s network, especially a fiber network, to provide service. In Europe ISPs are willing to compete side-by-side with other ISPs even though there is no inherent advantage of one service provider versus another when they are all on the same network.

A perfect example of a European open access network that attracted competition is the one built in Amsterdam. Much of the basic infrastructure has been built by the City, although there have been some private partners recently building some additions to the network. But all parts of the network are fully open access. There are thirteen major service providers offering services on the Amsterdam fiber network – Canal Digitaal, Concepts, KPN, Fype, Online NL, Ligbrandt, Scarlet, Tele2, Telfort, UPC, Vodafone, XS4ALL, and Ziggo. In addition there are around 25 other ISPs who serve smaller niches of customers, often with specialty products such as medical monitoring or small business service.

A few of these service providers are large incumbent providers that had monopolies in their own countries before the formation of the European Union. For example, KPN is the incumbent provider for the Netherlands. Vodafone was an incumbent provider in Germany.

It’s easy to contrast this with the US. There have been a number of cities that have built open access networks in the US and who then tried to lure ISPs to serve in the networks. Some of the open access networks include Tacoma, Provo, Utopia (small towns in Utah), Chelan PUD and a number of other smaller PUDs in Washington state. In none of these cases did a large or incumbent cable provider or telephone company agree to bring service to these fiber networks. In every case the cities that built the networks had to scramble to find local ISPs who were willing to tackle the business. And in almost all cases the Cities had to give a lot of help to these local ISPs in the early days to help them succeed. The ISPs that have operated on US open access networks are generally small, local and under-capitalized. None of the US competitors are of the size or strength of the competitors in Europe.

Why do the big telcos and cable companies in Europe step up and compete against each other while the ones in the US do not? On the European side of the equation, the competitive attitude goes back to the beginning of the European Union. The European Union built slowly since the early 1970’s, but it took on most of its current membership by the early 1990’s. In the mid-90’s there were various treaties signed which opened the borders between European nations, both physically and in terms of commerce. Before that time almost every European country had a monopoly telecom provider. But when the gates were opened to competition, a few of them crossed borders to compete and soon everybody jumped into the competitive fray.

But in the US I can’t find one example of an incumbent cable company competing against another incumbent cable provider. And the large telephone companies barely compete against each other. They fight hard for things like the contract to serve the US government, but overall they barely compete in each other’s territory. And even in most of the US where there are two providers, a telco and cable company, for the most part both parties charge high prices and do not compete heavily with each other. The system in the US is referred to in economic terms as an oligopoly, where a few large providers have divvied up the market to mutual benefit. While there is competition, it is nothing like the real competition seen in Europe.

But I must grant that it probably would be difficult for a large US telephone or cable company to provide service on somebody else’s network. These companies are highly decentralized and it often requires groups from many states to come together to provide service to a new customer. The processes used by the large incumbents are so specific to the way they do things on their network that it might just be too costly for them to modify those processes to serve on a different network.

But whatever the reasons, Europe enjoys tremendous competition for customers, particularly where somebody has built a fiber network. But in the US no such competition exists, other than in metro areas where CLECs still vigorously compete for large business customers in highrises.

Categories
The Industry What Customers Want

Choosing the Lesser of Two Evils?

FTTH fiber-to-the-home (Photo credit: dvanzuijlekom)

Today our guest blogger is Ron Isaacson, a former employee and still a good friend of CCG’s.

A number of years ago, the large ILEC in our area installed fiber optic lines in our neighborhood and soon started offering their FTTH product line in the area. The cable provider had already been in the neighborhood for a while and was already fiercely pushing their bundled service packages. We finally were going to have the competitive market version of a boxing match. SWEET!!

Our family had “Dish” TV service, satellite access that worked most of the time – except when bad weather interrupted the signal. We had dial-up Internet through a local ISP, back when the bandwidth offered on dial-up was still relatively decent, and we had our telephone service through a local CLEC. Being a telecom consultant I liked splitting services between the different vendors because no one monopolist had their claws fully in my back pocket. I might have been paying a little more for this split service, but it made sense to me.

However, the FTTH offerings changed the whole equation. Cable offered a full package too, so we had a choice.

Having had previous horrendous customer service experiences with both the ILEC and the cable company we were at a quandary as to which 21st Century telecom service to commit to, so I decided to take a poll: I asked a bunch of my neighbors which service they subscribed to and why, and how were the services provided?

The results were a classic case of monopolistic bad reputations! Either a family absolutely hated the ILEC and had signed up with cable, or they absolutely hated the cable company and had signed up with the ILEC. Apparently, no one truly loved either telecom provider and they just chose the company that they hated the least. (It’s been a few years, hopefully this has changed!) I couldn’t help but thinking that both companies are as bad as the worst of the stories about the airlines!

We chose the ILEC, but the notorious nature of the story was just getting started. Our telephone number, which we had for over 25 years, was an exchange-level “FX” number, meaning that all of the customers with that exchange were billed as if the service was down-county, closer to the metro-area. The rep advised that this was not a problem, that they could still do the switch.

Once the FTTH was installed, the Internet and TV service worked beautifully, but it took another 35 days for the phone service to be re-connected because, and this is a quote, “The fiber can’t handle the FX line.” At this point I laughed and replied, “I beg to differ. The fiber doesn’t know the difference, and doesn’t care….it is your systems that are messed up!”

After 35 days, they decided to run the telephone service over the old copper pair, and bill it as if it was on the fiber. This actually proved to be a good thing when the electric power went out due to an electric utility that also possessed byzantine customer service skills.

Years later the ILEC came back and reconfigured the FTTH to include the telephone service on the fiber. Incredibly, the telecom service that was the most troublesome for the telephone company to install….who knew?

Years later, this experience still shades my view of the ILEC, the gang that proved to me beyond a shadow of a doubt that they can and will shoot themselves in both feet.

Thinking of my installation experience with fiber made me think back to something that had happened to me earlier. Many years ago, in the hay-day of the long distance marketplace during a customer service training seminar, the class discussed the results of a poll showing the reasons that customers cancel their service with carriers. A couple of facts stuck with me: First, 3% of customers die and there’s not much one can do about that. Additionally, about 5 to 10% of customers move, or otherwise change locations. Again, not much (at that time) that could be done about that.

However, over 50% of customers cancel because of rudeness or indifference from customer service personnel in reference to a given incident. There were reasons filling in the rest of the 100%, but those three points stuck out to me – two that you can’t do anything about and one that we definitely can.

The bottom line I took away from that training, and my experience with the telephone company is to be sure that every customer is treated as if their service matters, as if their patronage is appreciated.

Categories
Regulatory Alerts

Regulatory Alert: FCC Reminds ACS Providers (Advanced Communications Services) of Filing for CVAA Compliance

The FCC recently issued a public notice reminding Advanced Communications Providers (ACS) and equipment manufacturers that they need to provide evidence that they are complying with the Twenty First Century Communications and Video Accessibility Act (CVAA). The FCC is now implementing Section 255 of the Telecommunications Act of 1996 that requires telecom products and equipment be accessible by people with disabilities.

The FCC defines an ACS provider in Section 3(1) of the Act to mean a carrier that provides one of the following: (A) interconnected VoIP service; (B) non-interconnected VoIP service; (C) electronic messaging service; and (D) interoperable video conferencing service. The FCC also defines advanced communications services providers to include all entities that offer advanced communications services in or affecting interstate commerce, including resellers and aggregators. Such providers include entities that provide advanced communications services over their own networks, as well as providers of applications or services accessed (i.e., downloaded and run) by users over other service providers’ networks.

The CVAA law was enacted in 2010 and is aimed to ensure that people with disabilities have access to advanced communications services. This requirement by the FCC is somewhat unusual in that it applies to telecom providers who are otherwise largely unregulated.

And there are a lot of nuances to be in compliance:

  • There must be a filing done for each corporate entity that provides ACS services and you can’t just designate somebody at the parent company to cover all of your subsidiaries.
  • You must provide an affidavit of compliance by a company officer.
  • It must be filed electronically.

The original deadline for these filings was April 1, but we believe a lot of entities who should have filed did not. If you provide any form of VoIP you need to comply with these rules or face eventual fines.

The filing requires the following:

  • A description of the effort the company will undertake to discuss your services with customers with disabilities.
  • A description of the features and other ways that your products will be made accessible to customers with disabilities.
  • A description of how people with disabilities would most likely be able to use your products.

So, if you provide VoIP – even on a resale basis – you need to make this filing.

If you want to know more about the specific filing requirements, or if you want assistance in making this filing contact Terri Firestein at (301) 788-6889.

Categories
Improving Your Business Technology

Data Mining – It’s Not What Customers Think

I know that when the public hears that their ISP is engaging in data mining that they assume this means that the ISP is reading their emails and monitoring their website viewing. And ISPs do have the ability to do those things although I don’t know any who spy on their customers in that way.

I can certainly understand why data mining scares the average consumer. Supermarkets get you to sign up for their loyalty programs so that they know everything you buy from them. And I know I get a spooky feeling when I express an interest about some product in one place on the Internet and then see ads for that product pop up on Facebook or my Google search.

But data mining is a valuable tool and every ISP should be using it – just not in the same way that the supermarkets and Facebook do it. In fact, we probably need to come up with a better terminology for doing the things I am suggesting below.

There are a number of tools around that let you look at data about customer usage and these tools allow an ISP to do the following:

  • Spambots. There is a wide array of spambots and other malware on the web that can infect customers’ computers. The worst of these, from a network perspective are spambots, which take over your customer’s computers and use it to send out spam. Most ISPs monitor email usage from their own domain and can spot when one of their users has been taken over by a spambot. But most customers these days do not use the email names and domains assigned by their ISP. Instead they web email addresses such as gmail or even the older AOL. And some spambots create new email addresses that the customer doesn’t even know about. And so data mining can be used to look for customers with unusual upload traffic. No customer is going to be offended if you ask them if they are uploading traffic 24 hours per day if in the process you help eliminate Trojan horses and spambots from their computer.
118 – Another File Sharing Session (Photo credit: erickespinosa)
  • Web servers. Most ISPs do not want a customer to be using a residential ISP account to run a commercial web server. A web server is a device that is being used to run a website or service that drives a large amount of download traffic. Such a website might be used for e-commerce for example. But far too often web servers are used to run porn sites. ISPs are not against web servers, but they do expect people who operate them to buy the proper business level service. A web server can be full 24-hours per day, and that is generally not the level of service that is intended for a shared residential product. Data mining can be used to identify web servers and the customer can be directed to a more appropriate (and appropriately priced) service.
  • Data Caps. Most ISPs have set some cap on the amount of usage that a customer can download in a month. And these caps do not have to be small. I have one client that has a 2 terabyte cap each month for residential downloads. But there is no sense in having a data cap if you can’t actually measure how much bandwidth each customer is using. Data mining tools are the way to measure customers’ usage.
  • File sharing. Most ISPs have terms of service that prohibit customers from sharing copyrighted materials with others. But realistically an ISP is not going to know what customers are sharing with each other unless you get a complaint from a copyright holder. But many ISPs still like to get a handle on file-sharing because such traffic can eat up a lot of system bandwidth. Data mining can help you identify customers who are probably involved in one of the common file sharing programs.  An awful lot of file sharing is done by teenagers. I have clients who send out friendly reminders to customers who they think are file sharing that say something like: “We notice by your internet usage that you are probably running a file sharing program. We would just like to remind you that it is illegal to share copyrighted material and that there have been cases where copyright owners have gotten significant settlements by suing people who were sharing their property.” Such notices cut down on a lot of file sharing traffic as parent pressure kids into doing the right thing.

So you should be data mining. But perhaps the things I have described could all better be classified as network management, a term that would not dismay your customers.

Categories
Current News The Industry

Will Poor People Get Google Fiber?

FiOS installed in Montclair, New Jersey (Photo credit: Wikipedia)

This was a great question that was posed by a recent article in Forbes Magazine. In this country we have a long history of having telecom provided by monopoly telephone companies and more recently by cable companies. Both incumbent providers have been mandated to serve almost everybody in their footprint. In the case of telephone companies this has been done by regulatory fiat by the various state Commissions that regulate telephone service in each state. Every state has rules for incumbent telephone companies that include a requirement for universal service using a concept known as carrier-of-last-resort. When a telephone company got the right to serve an area they were expected to provide service to everybody in that area, within reason, and then the costs of the more expensive-to-reach customers was averaged with everybody else. I say within reason, because even the telephone companies were allowed an out for really expensive-to-reach customers. For instance, if a farmer lived back a seven-mile long lane, the phone company might only provide a mile or two of the service line and expect the customer to pay for the rest.

And cable companies had similar requirement that came through the franchise agreements that they signed with local governments. If a cable company wanted to serve a town, then they were required to serve everybody in town in order to get the franchise.

Today fiber is being built by both regulated monopoly carriers like Verizon, but also by competitive providers like Google. But none of the fiber builders has the same carrier-of-last-resort or cable-like franchises requirements that the incumbents faced when they built their copper networks.

So to answer the opening question, will everybody get Google fiber?  The answer is no, for the following reasons:

  • Copper is still in place.  As long as the copper is still in place for the telephone and cable company, they can satisfy their service obligations by connecting customers on copper. They are thus relieved of building fiber everywhere as long as copper still exists.
  • Exclusive contracts with MDUs.  Anybody that builds with fiber needs to get the approval of the owner of multi-tenant buildings, be that apartments or multi-tenant business buildings. And some of those building owners are not going to give permission. Some building owners will have signed exclusive access contracts with the incumbent cable company. The FCC invalidated some types of exclusivity a few years ago, but there are still contractual ways for the cable company to keep out competition. Further, some building owners just don’t want to let a provider into their complex.
  • Places too expensive to serve.  Fiber overbuilders can pick and choose where to serve. It is often very expensive to bring fiber into apartment buildings, particularly older apartments, and many fiber builders choose to not build or selectively build to apartments. Verizon is famous for avoiding high-cost places. If you look at a suburban map of Verizon FiOS you would find a real patchwork of served areas. They will build to one pocket of houses but then skip over ones right next door, certainly due to cost. For the most part Verizon has elected to not dig up streets to build fiber, and so FiOS is more commonly placed in neighborhoods with existing Verizon aerial wires, or in neighborhoods where there is existing conduit in the ground. Verizon also often skips past apartment complexes. But I don’t want to single out Verizon since this is true of just about every fiber overbuilder.
  • Redlining, or the nearest thing to it.  As the article suggests, the build-out patterns of Verizon, Google and just about any other fiber overbuilder have a significant taste of redlining about them. It is easy for the fiber builders to say they are building where the cost is the lowest and the returns are expected to be the highest, but this means that they generally end up avoiding large apartment complexes and poorer neighborhoods. If they had set out to deliberately redline they would end up with basically the same networks that actually get built.

And so we are entering a future where there will be definite fiber haves and have-nots. There has been a lot of this for the last few decades since the introduction of DSL and cable modems. Rural areas for the large part have received very little broadband compared to urban and suburban areas. But the future digital divide is going to be starker, with the divide being everywhere, including the cities and suburbs, with some homes having fiber and others not.

For the last decade there has been conventional wisdom that having fiber connected to your home will add to the value of your house. I guess we are going to get to see this tested on a very large-scale.

Categories
Meet CCG

One Month Anniversary

I’ve been writing this blog for a month now and so far I have learned the following:

It takes a certain discipline. On many of the topics I am covering I could easily write a white paper, or at least a long dialogue. However, blogging forces you to keep things short. I have found that I will have to break some topics into a series of blogs if I want to cover them fully.

And the trick is in making something short is to not over-simplify it. I have already caught myself doing that. Some telecom topics are complex and can’t be covered adequately in three paragraphs.

So bear with me as I learn this new medium. It has been interesting to write this way and I hope the resulting blog posts are of value to my readers.

There are a lot of topics. When I got the idea of writing the blog my first fear was that I would quickly run out of topics. On the first day I sat and thought hard and made a list of forty topics. It struck me that day that if I wrote those forty blogs that I would be done with this blog after two months.

Luckily, it seems that every time I write something or read something on the Internet that I think of five more related topics. I also now seeing a blog post every time I read a telecom news story.  CCG Consulting as a firm is involved in a huge array of telecom services. This gives me a really wide spectrum of relevant ideas to write about. I don’t know that I can crank out meaningful posts forever, but I think I can do it for years. We shall see.

Some topics are boring as hell. So far I have not found any good way to spice up a blog post about an FCC ruling or about the current nature of access disputes. But sometimes these are the topics that small LECS and CLECs most need to know about. So please just take my most boring blog posts like medicine and just remember they are good for you!

Categories
Improving Your Business What Customers Want

Know Your Fifty Biggest Business Customers

This is an idea that is so simple that I almost didn’t make a blog entry out of it. But every service provider should personally know their largest business customers. I arbitrarily set the number to fifty customers, but fifty is not a magic number and there is some number that is right for every carrier.

When I say that you should know them personally I mean just that. These customers should get a visit from you every year. You should do your best to get to know each of these customers well and understand their needs. Talk to them about their business and understand how they use your existing products. If this blog has highlighted anything, it is that the needs of business customers are evolving and changing quickly, so you should also be talking with these customers about how you help them to meet their needs in the future.

Starting this process is easy. Generate a report each month that lists the highest billing customers. As you compare these results month over month you will begin to see the top customers in terms of billing.

As you find out what your largest customers want, you are going to find out that you have holes in your product offerings. You might find that these customers are buying some things elsewhere or else are going without features and products they would like. It would not be surprising to find that some of them are thinking of changing service provider. Often you will find out that they don’t know what they need in terms of product, and part of the reasons for these visits is for you to educate them on the wide range of business products that are available to them today.

The businesses should welcome your visits if you come by to get to know them and advise them. You are not be building loyalty if you only visit your customers when they have a contract expiring or some similar event. Loyalty instead comes when they know you care about them and their success.

Most service providers I know can name their top few customers, but it’s rare to find somebody who can name their top fifty. And it is far fewer who have made it a priority to visit their largest customers every year. Visiting fifty customers is one visit per week. Find a way to work that into your schedule. You will love the results.