Monday, June 30, 2003
Sunday, June 29, 2003
How to find the responses to the Pulver Petition
By Jeff Pulver
On April 2nd it became clearer that the fight to keep Internet Telephony Regulation Free inside of the United States will continue to be an uphill battle.
For starters, both the States of Michigan the State of Minnesota filed against the Free World Dialup petition. Their premise seemed a little bit out of the movie "Minority Report." These states joined the list of entities against the FWD petition which today include: BellSouth, SBC, the USTA and FBI/DoJ.
Those in favor of the FWD Petition include: AT&T, Qwest, Worldcom, Global Crossing, Cisco and the EFF.
All of the reply comments, including our April 2nd reply, can be read by
visiting:
<http://gullfoss2.fcc.gov/prod/ecfs/comsrch_v2.cgi> and entering: 03-45 in the Proceeding Box.
If there are people here from either the states of MI or MN who feel that FWD should not be regulated in their states at this time, it couldn't hurt if you made this point well known. The Michigan reply was filed by the Michigan Attorney General's office on behalf of the Michigan Public Service Commission and the Minnesota reply was filed by the Minnesota Department of Commerce.
As a side note, special thanks to everyone who reached out in February and make your points with your respective State PUC offices. I heard back last Monday night (March 31st) during Spring 2003 VON that your voice and actions were noticed by NARUC. Thank you for your support.
Best regards,
Jeff
By Jeff Pulver
On April 2nd it became clearer that the fight to keep Internet Telephony Regulation Free inside of the United States will continue to be an uphill battle.
For starters, both the States of Michigan the State of Minnesota filed against the Free World Dialup petition. Their premise seemed a little bit out of the movie "Minority Report." These states joined the list of entities against the FWD petition which today include: BellSouth, SBC, the USTA and FBI/DoJ.
Those in favor of the FWD Petition include: AT&T, Qwest, Worldcom, Global Crossing, Cisco and the EFF.
All of the reply comments, including our April 2nd reply, can be read by
visiting:
<http://gullfoss2.fcc.gov/prod/ecfs/comsrch_v2.cgi> and entering: 03-45 in the Proceeding Box.
If there are people here from either the states of MI or MN who feel that FWD should not be regulated in their states at this time, it couldn't hurt if you made this point well known. The Michigan reply was filed by the Michigan Attorney General's office on behalf of the Michigan Public Service Commission and the Minnesota reply was filed by the Minnesota Department of Commerce.
As a side note, special thanks to everyone who reached out in February and make your points with your respective State PUC offices. I heard back last Monday night (March 31st) during Spring 2003 VON that your voice and actions were noticed by NARUC. Thank you for your support.
Best regards,
Jeff
By Jeff Pulver
I received the following email from David Young at Verzion with regard to the Verizon comments on the FWD Petition. A copy of the Verizon filing has been posted to: ( http://pulver.com/fwd/vzfwd.pdf ).
---------- Forwarded message ----------
Date: Mon, 17 Mar 2003 07:59:06 -0500
From: david.e.young@verizon.com
To: jeff@pulver.com
Subject: Verizon Comments
Jeff,
FYI - Just wanted to share our comments with you. In the end, we agreed
with your petition - FWD should not be regulated under Title II as a 'telecommunications service', although we do not believe the FCC should make their determination until they have completed their work on the regulatory framework for broadband services and associated applications. They have 3 proceedings underway right now that address this issue in both the DSL and Cable Modem environments. Hopefully these will be completed some time this summer.
Regarding the particulars of our comments, we agree, as Bruce said in your petition, that FWD dial-up is not an information service. We did disagree regarding 'telecommunications' and do believe that the end-to-end voice transmission capability created by FWD does constitute 'telecommunications'. However, just because a service is or has some 'telecommunications' components, there is no need to require that the service be offered as a common carrier service under Title II. Instead, the FCC can classify it under Title I and deregulate it, just like they
did with CPE. We think this is what should be done after the broadband
proceedings are finished
Best regards,
-David
I received the following email from David Young at Verzion with regard to the Verizon comments on the FWD Petition. A copy of the Verizon filing has been posted to: ( http://pulver.com/fwd/vzfwd.pdf ).
---------- Forwarded message ----------
Date: Mon, 17 Mar 2003 07:59:06 -0500
From: david.e.young@verizon.com
To: jeff@pulver.com
Subject: Verizon Comments
Jeff,
FYI - Just wanted to share our comments with you. In the end, we agreed
with your petition - FWD should not be regulated under Title II as a 'telecommunications service', although we do not believe the FCC should make their determination until they have completed their work on the regulatory framework for broadband services and associated applications. They have 3 proceedings underway right now that address this issue in both the DSL and Cable Modem environments. Hopefully these will be completed some time this summer.
Regarding the particulars of our comments, we agree, as Bruce said in your petition, that FWD dial-up is not an information service. We did disagree regarding 'telecommunications' and do believe that the end-to-end voice transmission capability created by FWD does constitute 'telecommunications'. However, just because a service is or has some 'telecommunications' components, there is no need to require that the service be offered as a common carrier service under Title II. Instead, the FCC can classify it under Title I and deregulate it, just like they
did with CPE. We think this is what should be done after the broadband
proceedings are finished
Best regards,
-David
By Jeff
Hi All,
While the DoJ/FBI response to the FWD Petition got my initial attention, I think the more interesting story here is that Qwest, WorldCom, Global Crossing and Cisco all came out in favor of the FWD Petition.
While some of the other comments from the "legacy" service providers were almost predictable, I remain positive about the future of IP Communications in the US with the support of these forward thinking service providers who clearly understand IP Communications.
For a good technical overview about FWD, please feel free to reveiew the Qwest comments. Qwest provided a fairly accurate and admittedly, a better description of how FWD works than what we filed in the origianl FWD petition.
Best regards,
Jeff
Hi All,
While the DoJ/FBI response to the FWD Petition got my initial attention, I think the more interesting story here is that Qwest, WorldCom, Global Crossing and Cisco all came out in favor of the FWD Petition.
While some of the other comments from the "legacy" service providers were almost predictable, I remain positive about the future of IP Communications in the US with the support of these forward thinking service providers who clearly understand IP Communications.
For a good technical overview about FWD, please feel free to reveiew the Qwest comments. Qwest provided a fairly accurate and admittedly, a better description of how FWD works than what we filed in the origianl FWD petition.
Best regards,
Jeff
ASSOCIATED PRESS
Fri, February 21, 2003
"Telecom companies roiled again by FCC vote on phone competition"
By BRIAN BERGSTEIN
NEW YORK (AP) - This week's Federal Communications Commission vote on phone and Internet competition was supposed to herald a new era of clarity in the turbulent telecom industry.
Instead, the decision revealed an amazing amount of discord within the FCC and spells even more uncertainty for consumers and investors. The nation's phone giants moaned that the FCC failed to drop outdated rules that let competitors use Bell networks at discounted prices. Consumer groups praised the decision because it preserves the ability of long-distance carriers like AT&T Corp. and WorldCom Inc. to offer local service.
The Bell companies are the regional phone companies that were spun off from AT&T Corp. in the early 1980s.
But consumer groups also complained that the phone companies won dangerous power over the future of Internet access, closing out smaller providers and guaranteeing higher prices for residential users.
For now, all that is certain is that the future of communications in America will be played out, once again, in the courts. Congress could step in, but many observers say that appears unlikely anytime soon with so many other issues dominating Washington these days.
"The surprise is not so much that we did not achieve what we hoped to on so many issues," said Thomas Tauke, top lobbyist at Verizon Communications Inc., the nation's biggest phone company. "The surprise is the disarray within the FCC and the resulting lack of a coherent legal and policy philosophy."
The confusion was felt on Wall Street. Shares of the four major phone companies were ravaged after Thursday's FCC vote but rebounded Friday, except for SBC Communications Inc., which fell more than two per cent.
Shares of Bell rivals also gained Friday, with Sprint's land-line division up more than three per cent and AT&T stock rising nearly two per cent.
The FCC was faced with an extraordinarily complex task - to reconsider, by a court-ordered deadline, its enforcement of the 1996 Telecommunications Act. Two earlier sets of rules had been rejected by federal judges.
One major ruling Thursday was that state regulators will decide where, and at what price, Bells must make parts of their networks available to rivals in order to ensure competition.
This marked an unusual defeat for FCC Chairman Michael Powell, who advocated eliminating the network-sharing requirements altogether. Powell agrees with the Bells that competition for local phone service is vibrant in many forms, including wireless phones, e-mail and cable and Internet technologies. But Republican Kevin Martin, a former campaign aide to President George W. Bush, sided with the commission's two Democrats for a three to two majority.
Telecom analyst Phil Jacobson of Network Conceptions LLC said he was surprised that Powell, son of Secretary of State Colin Powell, wouldn't compromise on a position that probably was politically untenable, considering that the existing rules let Bell rivals provide local service on 10 million phone lines.
"It hurts his credibility for really being able to accomplish much," Jacobson said. "It shows that he doesn't just have a self-righteous attitude - he has a self-righteous attitude even when he's not right."
But other observers called Martin's approach a cop-out.
"We're going to have this hodgepodge of 50 different regulatory fiefdoms, unless the courts strike this all down," said Adam Thierer, director of telecommunications studies at the Cato Institute, a libertarian think tank.
Martin acknowledged Friday that the process had been difficult for the FCC and himself personally. He said no matter how the FCC had voted, it would have been challenged in court.
"If everyone is mad at you, maybe you got it right," he told a Georgetown University conference. "That definitely feels like that's true today."
The FCC did free the Bells from having to make new high-speed fibre-optic lines available to competitors at regulated prices. The Bells had long sought this bit of deregulation, saying it was vital for them to compete better with cable modems and get broadband Internet access to more homes.
"Their bluff was called," said Joan Marsh, AT&T's director of federal government affairs. "It's time for them to put their money where their mouth has been for a number of years."
Phone company executives countered that because the FCC didn't do enough to keep their basic landline phone business from shrinking, they won't have the money to invest in new fibre networks.
Still, some analysts said the Bells were given an enormous opportunity to confirm their lock on the "last mile" of wiring to individual homes. Indeed, Covad Communications Co., which leases Bell lines to provide high-speed Internet access over phone lines, said it might abandon selling to consumers and concentrate only on businesses.
Although emerging wireless technologies can get around the last-mile bottleneck, those have nowhere near the power of fibre-optic lines.
"If the (phone companies) were to play their cards right, we'd get a lot of new services but we'd have to pay through the nose," said independent telecom consultant David Isenberg. "It would become a robber baron-type scenario."
Copyright © 2003, CANOE, a division of Netgraphe Inc. All rights reserved.
Fri, February 21, 2003
"Telecom companies roiled again by FCC vote on phone competition"
By BRIAN BERGSTEIN
NEW YORK (AP) - This week's Federal Communications Commission vote on phone and Internet competition was supposed to herald a new era of clarity in the turbulent telecom industry.
Instead, the decision revealed an amazing amount of discord within the FCC and spells even more uncertainty for consumers and investors. The nation's phone giants moaned that the FCC failed to drop outdated rules that let competitors use Bell networks at discounted prices. Consumer groups praised the decision because it preserves the ability of long-distance carriers like AT&T Corp. and WorldCom Inc. to offer local service.
The Bell companies are the regional phone companies that were spun off from AT&T Corp. in the early 1980s.
But consumer groups also complained that the phone companies won dangerous power over the future of Internet access, closing out smaller providers and guaranteeing higher prices for residential users.
For now, all that is certain is that the future of communications in America will be played out, once again, in the courts. Congress could step in, but many observers say that appears unlikely anytime soon with so many other issues dominating Washington these days.
"The surprise is not so much that we did not achieve what we hoped to on so many issues," said Thomas Tauke, top lobbyist at Verizon Communications Inc., the nation's biggest phone company. "The surprise is the disarray within the FCC and the resulting lack of a coherent legal and policy philosophy."
The confusion was felt on Wall Street. Shares of the four major phone companies were ravaged after Thursday's FCC vote but rebounded Friday, except for SBC Communications Inc., which fell more than two per cent.
Shares of Bell rivals also gained Friday, with Sprint's land-line division up more than three per cent and AT&T stock rising nearly two per cent.
The FCC was faced with an extraordinarily complex task - to reconsider, by a court-ordered deadline, its enforcement of the 1996 Telecommunications Act. Two earlier sets of rules had been rejected by federal judges.
One major ruling Thursday was that state regulators will decide where, and at what price, Bells must make parts of their networks available to rivals in order to ensure competition.
This marked an unusual defeat for FCC Chairman Michael Powell, who advocated eliminating the network-sharing requirements altogether. Powell agrees with the Bells that competition for local phone service is vibrant in many forms, including wireless phones, e-mail and cable and Internet technologies. But Republican Kevin Martin, a former campaign aide to President George W. Bush, sided with the commission's two Democrats for a three to two majority.
Telecom analyst Phil Jacobson of Network Conceptions LLC said he was surprised that Powell, son of Secretary of State Colin Powell, wouldn't compromise on a position that probably was politically untenable, considering that the existing rules let Bell rivals provide local service on 10 million phone lines.
"It hurts his credibility for really being able to accomplish much," Jacobson said. "It shows that he doesn't just have a self-righteous attitude - he has a self-righteous attitude even when he's not right."
But other observers called Martin's approach a cop-out.
"We're going to have this hodgepodge of 50 different regulatory fiefdoms, unless the courts strike this all down," said Adam Thierer, director of telecommunications studies at the Cato Institute, a libertarian think tank.
Martin acknowledged Friday that the process had been difficult for the FCC and himself personally. He said no matter how the FCC had voted, it would have been challenged in court.
"If everyone is mad at you, maybe you got it right," he told a Georgetown University conference. "That definitely feels like that's true today."
The FCC did free the Bells from having to make new high-speed fibre-optic lines available to competitors at regulated prices. The Bells had long sought this bit of deregulation, saying it was vital for them to compete better with cable modems and get broadband Internet access to more homes.
"Their bluff was called," said Joan Marsh, AT&T's director of federal government affairs. "It's time for them to put their money where their mouth has been for a number of years."
Phone company executives countered that because the FCC didn't do enough to keep their basic landline phone business from shrinking, they won't have the money to invest in new fibre networks.
Still, some analysts said the Bells were given an enormous opportunity to confirm their lock on the "last mile" of wiring to individual homes. Indeed, Covad Communications Co., which leases Bell lines to provide high-speed Internet access over phone lines, said it might abandon selling to consumers and concentrate only on businesses.
Although emerging wireless technologies can get around the last-mile bottleneck, those have nowhere near the power of fibre-optic lines.
"If the (phone companies) were to play their cards right, we'd get a lot of new services but we'd have to pay through the nose," said independent telecom consultant David Isenberg. "It would become a robber baron-type scenario."
Copyright © 2003, CANOE, a division of Netgraphe Inc. All rights reserved.
Jeff Pulver at 6.2.2003
Earlier today I filed a petition with the FCC which requests for a "Declaratory Ruling" that Free World Dialup should not be regulated by the FCC.
A copy of the press release announcing this is posted to:
( http://biz.yahoo.com/bw/030205/52580_1.html )
You can download a copy of the FWD petition:
at ( http://www.pulver.com/reports/FWDPetition.pdf) - this is a 1.5 MB file.
Earlier today I filed a petition with the FCC which requests for a "Declaratory Ruling" that Free World Dialup should not be regulated by the FCC.
A copy of the press release announcing this is posted to:
( http://biz.yahoo.com/bw/030205/52580_1.html )
You can download a copy of the FWD petition:
at ( http://www.pulver.com/reports/FWDPetition.pdf) - this is a 1.5 MB file.
FBI, DoJ OPPOSE COMPANY's EFFORT TO WIN
REGULATORY FREEDOM FOR VoIP OFFERING
The FCC's Wireline Competition Bureau should reject an Internet telephony provider's request for a declaratory ruling that its service is free from telecom regulations, say the Federal Bureau of Investigation and Department of Justice.
The request from Pulver.com should be dismissed without prejudice or held in abeyance until the Commission completes work on two related proceedings that will determine the regulatory treatment of wireline broadband and cable modem services, the FBI and DoJ said today in comments filed in Wireline Competition docket 03-45.
The broadband proceedings are important to the FBI and DoJ because their outcome may affect how telecom carriers will meet their obligations under the 1994 Communications Assistance for Law Enforcement Act (CALEA), which requires carriers to help authorities with wiretaps and other law enforcement activities.
"If certain broadband telecommunications carriers fail to comply with CALEA due to a misunderstanding of their regulatory status, criminals may exploit the opportunity to evade lawful electronic surveillance," the FBI and DoJ said.
The Wireline Competition Bureau "should not allow a single broadband Internet service provider to cut to the front of the line and win for itself a uniquely favorable regulatory status in an ad hoc proceeding while the rest of the industry must await the outcome of the more thorough rulemaking proceedings," they added.
"If the bureau were to grant Pulver.com's request to declare that its broadband Internet offering is an unregulated service, such action could seriously constrain the Commission's range of options in determining the appropriate regulatory status of other broadband services in the broadband proceedings," they said.
Other commenters, including Verizon Communications, Inc., and BellSouth Corp., agreed with the FBI and DoJ that the larger proceedings should be completed before the FCC rules on Pulver.com's petition. But Cisco Systems, Inc., which supplies Internet telephony gear, expressed support for Pulver.com's request.
"The one course of action the Commission should avoid is to permit the regulatory status of computer-to-computer VoIP [voice-over- Internet protocol] to become unsettled," Cisco said. Doing so could well slow the growth of IP networks generally." In making its request last month, Pulver.com said its Free World Dialup (FWD) service "differs in key respects" from traditional telephone service and other forms of phone-to-phone Internet protocol
(IP) telephony. "FWD facilitates connectivity only to other FWD members who are on line when a call is made," it said. "FWD does not provide members with access to the public switched telephone network (PSTN) or cellular networks."
In addition, the service doesn't use regular phone numbers or customer premises equipment, the firm said. "Further, FWD provides no transmission capabilities; the member uses his or her own broadband connection, which sends and receives packets of information, some of which may include voice packets."
"By definition, FWD cannot be a `telecommunications service' because it does not provide users with `telecommunications,'" the firm said. It requested the declaratory ruling "to remove uncertainty regarding the regulatory status of its interactive FWD and concomitant regulatory responsibilities." - Tom Leithauser, tleithauser@tr.com
REGULATORY FREEDOM FOR VoIP OFFERING
The FCC's Wireline Competition Bureau should reject an Internet telephony provider's request for a declaratory ruling that its service is free from telecom regulations, say the Federal Bureau of Investigation and Department of Justice.
The request from Pulver.com should be dismissed without prejudice or held in abeyance until the Commission completes work on two related proceedings that will determine the regulatory treatment of wireline broadband and cable modem services, the FBI and DoJ said today in comments filed in Wireline Competition docket 03-45.
The broadband proceedings are important to the FBI and DoJ because their outcome may affect how telecom carriers will meet their obligations under the 1994 Communications Assistance for Law Enforcement Act (CALEA), which requires carriers to help authorities with wiretaps and other law enforcement activities.
"If certain broadband telecommunications carriers fail to comply with CALEA due to a misunderstanding of their regulatory status, criminals may exploit the opportunity to evade lawful electronic surveillance," the FBI and DoJ said.
The Wireline Competition Bureau "should not allow a single broadband Internet service provider to cut to the front of the line and win for itself a uniquely favorable regulatory status in an ad hoc proceeding while the rest of the industry must await the outcome of the more thorough rulemaking proceedings," they added.
"If the bureau were to grant Pulver.com's request to declare that its broadband Internet offering is an unregulated service, such action could seriously constrain the Commission's range of options in determining the appropriate regulatory status of other broadband services in the broadband proceedings," they said.
Other commenters, including Verizon Communications, Inc., and BellSouth Corp., agreed with the FBI and DoJ that the larger proceedings should be completed before the FCC rules on Pulver.com's petition. But Cisco Systems, Inc., which supplies Internet telephony gear, expressed support for Pulver.com's request.
"The one course of action the Commission should avoid is to permit the regulatory status of computer-to-computer VoIP [voice-over- Internet protocol] to become unsettled," Cisco said. Doing so could well slow the growth of IP networks generally." In making its request last month, Pulver.com said its Free World Dialup (FWD) service "differs in key respects" from traditional telephone service and other forms of phone-to-phone Internet protocol
(IP) telephony. "FWD facilitates connectivity only to other FWD members who are on line when a call is made," it said. "FWD does not provide members with access to the public switched telephone network (PSTN) or cellular networks."
In addition, the service doesn't use regular phone numbers or customer premises equipment, the firm said. "Further, FWD provides no transmission capabilities; the member uses his or her own broadband connection, which sends and receives packets of information, some of which may include voice packets."
"By definition, FWD cannot be a `telecommunications service' because it does not provide users with `telecommunications,'" the firm said. It requested the declaratory ruling "to remove uncertainty regarding the regulatory status of its interactive FWD and concomitant regulatory responsibilities." - Tom Leithauser, tleithauser@tr.com
Feeling depressed and hopeless? Consider Bells' dilemma
By Kevin Maney
Slammed into a very large guy while playing hockey last night. Had roughly the same effect as a Cooper Mini hitting a Cadillac Escalade. Me being the Cooper Mini.
Did my taxes over the weekend.
Caught a cold. A sudden change in atmospheric pressure could, in fact, cause my head to crack like a bottle of Coke left in the freezer.
Despite all that, I'm not even a fraction as miserable as a local phone company CEO.
I know this after two recent meetings. One was with Duane Ackerman, CEO of BellSouth. The other, with Francis McInerney, an often-prescient author and telecommunications research analyst.
Ackerman visited USA TODAY. He had the calm and generous presence of a lawyer who'd come to read the will and put the family at ease. He could be accurately portrayed by Robert Duvall, should Hollywood decide to make BellSouth: The Movie.
Mostly, he came to tell us why regulators should do more to protect the Bells, which are the regional phone companies BellSouth, Verizon Communications, SBC Communications and Qwest Communications' US West.
My word, it was so sad that if I wasn't worried about being embarrassed in front of a room of colleagues, I might've teared up.
The Bells are not the monopolies the media portrays, Ackerman said. ''I've lost 30% to 34% of business customers across our territory -- 50% in some areas,'' he told us, saying he's fighting competition from long-distance companies, start-ups, wireless firms and cable companies. ''On the consumer side, we've lost 8% to 9%.''
Ackerman said he doesn't have the money to modernize to take on new competitors. His stock price is half of its 52-week high. Regulations force him to serve every low-revenue customer while the other companies skim cream.
He brought charts with lines and bars going in worrisome directions. He started talking about damage done by ''Uni-pee.'' I later learned he was saying UNE-P, which stands for unbundled network elements platform. It's one of those rules that forces Bells to open their markets to competition by leasing capacity on their systems to rivals.
Music executives get insomnia over MP3 file sharing. Bell executives sit up nights muttering about Uni-pee.
Because it all sounded so grim, I asked Ackerman why anyone would want to own BellSouth's stock. ''That's just it -- stocks have been pounded in this sector,'' he said. Policies have got to change, he added, or there will be trouble.
How much trouble? That's where McInerney comes in.
His firm, North River Ventures, has been saying for some time that the Bells might crater the American economy. Behind the Bells' pleas, McInerney says, is the reality that their networks are essentially worthless. In this data network era, the Bells' circuit-switched networks are like railroad tracks at the dawn of the jet age. Built for voice, Bell networks carry too little information at too high a cost, and the only way to fix it would be to replace it all. The Bell networks are viable only if monopoly pricing and regulations prop them up.
''That's called socialism,'' McInerney adds.
All told, McInerney estimates that the Bells have $360 billion of obsolete assets on their books. Writing all that off would leave the Bells in financial shambles. They can't do it.
But they can't compete, either. Wireless and cable companies, Wi-Fi start-ups, AT&T and MCI -- they'll all continue to seep away Bell customers, especially if prices remain artificially high.
The Bells' revenue shrank 3.4% in 2002. Yet they have the huge, fixed costs of their networks. As revenue goes down and costs stay up, the Bells have less money for new networks and are less able to lower prices. Before long, McInerney says, some company will offer a homeowner a package of services -- maybe by wireless or cable TV lines
-- for a really low price. ''Then you will hear a giant sucking sound,'' he says.
Which would be a heck of a problem, because the Bells employ hundreds of thousands of people -- far more than the likes of WorldCom and Global Crossing, both in Chapter 11. Think of the potential for crushed 401(k)s and defunct pension plans. And if the Bells aren't there, who's going to wire the Texas trailer parks and Kansas farmhouses -- places upstarts won't want to serve?
As a nation, the USA has a big decision to make. Do we go the socialist route and make taxpayers support the Bells as the Bells turn into the next Conrail?
When you come down to it, that's what Ackerman wants. If regulations let the Bells keep their monopolies, the effect is that prices stay artificially high, and we all help pay to keep an outdated system afloat.
Or can we be real capitalists, break up the monopolies, open the way for competitors and let the Bells succeed or fail on their own?
''Not doing anything would be a disaster,'' McInerney says.
Now you see what's burdening the CEO from BellSouth and all his fellow Bell CEOs. It truly seems bleak -- for the Bells, for thousands of workers and for the economy.
Ackerman and McInerney have managed to make me feel crappier.
By Kevin Maney
Slammed into a very large guy while playing hockey last night. Had roughly the same effect as a Cooper Mini hitting a Cadillac Escalade. Me being the Cooper Mini.
Did my taxes over the weekend.
Caught a cold. A sudden change in atmospheric pressure could, in fact, cause my head to crack like a bottle of Coke left in the freezer.
Despite all that, I'm not even a fraction as miserable as a local phone company CEO.
I know this after two recent meetings. One was with Duane Ackerman, CEO of BellSouth. The other, with Francis McInerney, an often-prescient author and telecommunications research analyst.
Ackerman visited USA TODAY. He had the calm and generous presence of a lawyer who'd come to read the will and put the family at ease. He could be accurately portrayed by Robert Duvall, should Hollywood decide to make BellSouth: The Movie.
Mostly, he came to tell us why regulators should do more to protect the Bells, which are the regional phone companies BellSouth, Verizon Communications, SBC Communications and Qwest Communications' US West.
My word, it was so sad that if I wasn't worried about being embarrassed in front of a room of colleagues, I might've teared up.
The Bells are not the monopolies the media portrays, Ackerman said. ''I've lost 30% to 34% of business customers across our territory -- 50% in some areas,'' he told us, saying he's fighting competition from long-distance companies, start-ups, wireless firms and cable companies. ''On the consumer side, we've lost 8% to 9%.''
Ackerman said he doesn't have the money to modernize to take on new competitors. His stock price is half of its 52-week high. Regulations force him to serve every low-revenue customer while the other companies skim cream.
He brought charts with lines and bars going in worrisome directions. He started talking about damage done by ''Uni-pee.'' I later learned he was saying UNE-P, which stands for unbundled network elements platform. It's one of those rules that forces Bells to open their markets to competition by leasing capacity on their systems to rivals.
Music executives get insomnia over MP3 file sharing. Bell executives sit up nights muttering about Uni-pee.
Because it all sounded so grim, I asked Ackerman why anyone would want to own BellSouth's stock. ''That's just it -- stocks have been pounded in this sector,'' he said. Policies have got to change, he added, or there will be trouble.
How much trouble? That's where McInerney comes in.
His firm, North River Ventures, has been saying for some time that the Bells might crater the American economy. Behind the Bells' pleas, McInerney says, is the reality that their networks are essentially worthless. In this data network era, the Bells' circuit-switched networks are like railroad tracks at the dawn of the jet age. Built for voice, Bell networks carry too little information at too high a cost, and the only way to fix it would be to replace it all. The Bell networks are viable only if monopoly pricing and regulations prop them up.
''That's called socialism,'' McInerney adds.
All told, McInerney estimates that the Bells have $360 billion of obsolete assets on their books. Writing all that off would leave the Bells in financial shambles. They can't do it.
But they can't compete, either. Wireless and cable companies, Wi-Fi start-ups, AT&T and MCI -- they'll all continue to seep away Bell customers, especially if prices remain artificially high.
The Bells' revenue shrank 3.4% in 2002. Yet they have the huge, fixed costs of their networks. As revenue goes down and costs stay up, the Bells have less money for new networks and are less able to lower prices. Before long, McInerney says, some company will offer a homeowner a package of services -- maybe by wireless or cable TV lines
-- for a really low price. ''Then you will hear a giant sucking sound,'' he says.
Which would be a heck of a problem, because the Bells employ hundreds of thousands of people -- far more than the likes of WorldCom and Global Crossing, both in Chapter 11. Think of the potential for crushed 401(k)s and defunct pension plans. And if the Bells aren't there, who's going to wire the Texas trailer parks and Kansas farmhouses -- places upstarts won't want to serve?
As a nation, the USA has a big decision to make. Do we go the socialist route and make taxpayers support the Bells as the Bells turn into the next Conrail?
When you come down to it, that's what Ackerman wants. If regulations let the Bells keep their monopolies, the effect is that prices stay artificially high, and we all help pay to keep an outdated system afloat.
Or can we be real capitalists, break up the monopolies, open the way for competitors and let the Bells succeed or fail on their own?
''Not doing anything would be a disaster,'' McInerney says.
Now you see what's burdening the CEO from BellSouth and all his fellow Bell CEOs. It truly seems bleak -- for the Bells, for thousands of workers and for the economy.
Ackerman and McInerney have managed to make me feel crappier.
Rich Shockey:
>Does anyone have a perspective on what's happening with Bell South and
>Vonage?
I do ..for the obvious reasons of who I work for ..but a strong disclaimer
is in order...my opinions here are not that of my employer ..NANPA etal etc..
In fact ignore my sig file
beyond that....one of better stories about the issues was here
http://news.com.com/2100-1033-982130.html
at this time its a bit of a the tempest in a teapot ... its a LEC using the
system to try and screw up with emerging VoIP carriers like Vonage. Bell
South says they do now want to impead competition but we all know better
than that.
Vonage gets telephone numbers for its service though perfectly legal
retail/wholesale agreements with CLECS in the rate centers where they are
operating.. the CLEC's are then responsible for all the usual fees and
reporting requirements carriers have .
There is modest concern that since lots of people might opt for a 212 408
area code that could put NYC San Jose into number exaust again and force a
new overlay code but the chances of that happening now is very low.
This is going no where....
ATT actually put Bell South in its place
http://www.nanc-chair.org/docs/nowg/Jan03_ATT_VOIP_Paper.doc
The NANP is doing fine ..between pooling and 1st 2nd line disconnects
wireless overlay codes we are now recovering more numbers than we actually
use ..and if we went to national 10 digit dialing we could increase the
pool by 20% remember the first digit of any 7 digit local number cannot
be 1 or 0
The current projection of NANP exhaust is 2025
What it is illustrative of is the looming fear the LEC's have about their
businesses ..they are in trouble, they know it and the worst is yet to come.
Roxanne Googan and Susan Kalla were optimists..
This is just the first salvo in the upcoming saga of whining moaning
groaning by the BOC's as SIP deploys ( MS Greenwich is due in July) and
evidence from Japan continues to mount that the revolution is underway
there. the numbers from Yahoo Japan are just stunning 69% in subscribers
from the previous quarter VoIP bundeled in 30% market share for DSL in
Japan ...totally undercutting NTT frankly I never thought it could happen
there
There is reports out there that NTT has completely halted new investment in
their TDM network and I have seen with my eyes multiple platoons of NTT
engineers from every division of the company fanning out in IETF and VON
events.
Our industry must, however remain ever vigilant in the upcoming months
because this is not the last we are going to hear on this subject.
And of course UNEp ruling is due Feb 20
>Does anyone have a perspective on what's happening with Bell South and
>Vonage?
I do ..for the obvious reasons of who I work for ..but a strong disclaimer
is in order...my opinions here are not that of my employer ..NANPA etal etc..
In fact ignore my sig file
beyond that....one of better stories about the issues was here
http://news.com.com/2100-1033-982130.html
at this time its a bit of a the tempest in a teapot ... its a LEC using the
system to try and screw up with emerging VoIP carriers like Vonage. Bell
South says they do now want to impead competition but we all know better
than that.
Vonage gets telephone numbers for its service though perfectly legal
retail/wholesale agreements with CLECS in the rate centers where they are
operating.. the CLEC's are then responsible for all the usual fees and
reporting requirements carriers have .
There is modest concern that since lots of people might opt for a 212 408
area code that could put NYC San Jose into number exaust again and force a
new overlay code but the chances of that happening now is very low.
This is going no where....
ATT actually put Bell South in its place
http://www.nanc-chair.org/docs/nowg/Jan03_ATT_VOIP_Paper.doc
The NANP is doing fine ..between pooling and 1st 2nd line disconnects
wireless overlay codes we are now recovering more numbers than we actually
use ..and if we went to national 10 digit dialing we could increase the
pool by 20% remember the first digit of any 7 digit local number cannot
be 1 or 0
The current projection of NANP exhaust is 2025
What it is illustrative of is the looming fear the LEC's have about their
businesses ..they are in trouble, they know it and the worst is yet to come.
Roxanne Googan and Susan Kalla were optimists..
This is just the first salvo in the upcoming saga of whining moaning
groaning by the BOC's as SIP deploys ( MS Greenwich is due in July) and
evidence from Japan continues to mount that the revolution is underway
there. the numbers from Yahoo Japan are just stunning 69% in subscribers
from the previous quarter VoIP bundeled in 30% market share for DSL in
Japan ...totally undercutting NTT frankly I never thought it could happen
there
There is reports out there that NTT has completely halted new investment in
their TDM network and I have seen with my eyes multiple platoons of NTT
engineers from every division of the company fanning out in IETF and VON
events.
Our industry must, however remain ever vigilant in the upcoming months
because this is not the last we are going to hear on this subject.
And of course UNEp ruling is due Feb 20
From Rich Shockey et al
>BellSouth Revenues Down but DSL Up
>BellSouth just reported end-of-the-year financial results, with
>revenues
>for the year at $18.23 billion, a decrease of 4 percent from the $18.98
>billion a year ago. Net income was $1.42 billion, down 44.6 percent from
>the $2.57 billion of a year ago. Although BellSouth did not say what
>geographical areas would be covered, the area codes offered on its Web
>site include all the cities covered by Vonage, which covers most of the
>major metropolitan areas in the United States.
>
>BellSouth just reported DSL figures, and has now reached 1,021,000,
>growth
>of 65 percent over the 620,500 DSL subscribers it reported at the end of
>2001. The company has been one of the most aggressive in pushing out DSL,
>and a year ago the service was available to 70 percent of its customer
>base, or 15.5 phone lines. It is likely that the telco now has more than a
>million DSL subscribers, its goal for 2002.
>
>Vonage has been growing rapidly since its launch in August 2002, and
>just
>reported that it has 10,000 subscribers. The company did its first TV spot
>advertising the week of Jan. 13, and is planning direct-marketing
>advertising on television as well.
>
>To VoIP or Not To VoIP
>There are several forces at work, pro and con, in the RBOC's decision
>to
>deploy a flat-rate hosted voice-over-IP service, which uses technology
>that it has not yet deployed anywhere in its network.
>
>Though there is much focus on the technology issues between traditional
>and IP voice, one of the most interesting, yet risky, aspects of the
>Vonage service for an incumbent is that is flat-rate. Flat-rate services
>can be very attractive to consumers and reduce billing complexity, but it
>can also, in the short term, reduce revenues. A telco, such as BellSouth,
>that has just reported a drop in revenues may not be keen on cannibalizing
>its existing business.
>
>"I think they also get the opportunity essentially to keep their
>clients,"
>says Danny Klein, telecom infrastructure analyst for
>Yankee Group, who recently briefed BellSouth
>on Vonage. "If this does impact the market on a large scale, then there is
>going to be a lot of defection from traditional RBOC services to flat-fee
>calling services like Vonage. So though they could be cannibalizing their
>own sales, they are keeping the customer.
>
>Ownership of customers is important because, even if basic voice
>revenues
>go down, the company can always market other services to them. If
>BellSouth keeps ownership of the customer could still market other
>services to them. "It is certainly not characteristic of RBOCs or service
>providers in general to take the pre-emptive move of cannibalizing their
>own sales to add services, though that is the modern way to think," Klein adds.
>
>Klein observes,"This is almost a complementary service" to their
>traditional consumer offerings. It works only with a broadband connection,
>so you need either a DSL line into the home or cable. If BellSouth could
>combine them and offer a BellSouth DSL line plus Vonage service, it is a
>way to attract more DSL customers."
>
>Also, by packaging the two services together, a telco might be able to
>increase price and margins, and still give Vonage its cut. "So instead of
>offering a $40 service, they could offer a $50 service plus the DSL line.
>If customers pay $90 for DSL plus unlimited local plus domestic long
>distance, it's a less-than-$100 phone bill for all communications. It is
>almost like a triple play on the wireline side," Klein says.
>
>One could theorize that, if the BellSouth trial of these services is
>successful, it could launch its own in-house version and go into direct
>competition with Vonage and the other consumer VoIP services, such as
>Packet8, that are poised for commercial launch. Or it could simply buy up
>Vonage and absorb the service into its offerings.
>
>Either way, it seems inevitable that the small VoIP services will find
>competition in the long term from the telcos, which are not about to cede
>their consumer and small-business customer base to competitors.
>
> >>>>>>>>>>>>>>>>>>>
BEDMINSTER, New Jersey, Jan 23 (AFP) - Telecommunications giant AT and T's shares plunged 20 percent Thursday as it forecast sliding revenue in the year ahead.
AT and T swung into profit in the fourth quarter of 2002, but only
because
of the sale of its cable Internet operations, it said in a statement. It lost more than 13 billion dollars for the full year.
"AT and T said that it does not yet see a significant turnaround in the overall business services industry and, as a result, expects total telecom industry spending will be down again in 2003," it said.
On Wall Street, AT and T shares plummeted 5.09 dollars or 20.10 percent
to
20.23 dollars in early afternoon trade.
"The company also provided limited 2003 guidance, which does not paint a very encouraging picture for next year," Morgan Stanley analyst Simon Flannery said.
ATT Corp chief financial officer Tom Horton said the company also was abandoning the practice of providing quarterly and annual earnings per share forecasts.
"The goal will be to provide investors with additional financial and operational metrics to understand the key value drivers of the business," he said.
The decision follows in the footsteps of Coca-Cola Inc, Gillette Co, and McDonald's Corp.
In the fourth quarter, AT and T made a net profit of 516 million dollars, or 66 cents a share, after raking in 1.32 billion dollars from the sale of its AT and T Broadband division.
That compared to a year-earlier loss of 1.39 billion dollars, or 1.97 dollars a share.
Sales slumped 8.6 percent to 9.29 billion dollars in the quarter.
"We had solid operating results in the fourth quarter, reflecting our execution of the basics," said AT and T chairman and chief executive David Dorman.
"We saw continued growth in our local voice and data businesses despite
an
unsettled economic environment," he said in a statement.
"We are entering 2003 with a strong focus on meeting customer needs, improving shareowner value and maintaining our financial discipline and flexibility."
AT and T said it expected earnings per share in 2003 of 50 to 55 cents a share.
The business and consumer divisions both expected revenue to decline, albeit at a slower rate than in 2002.
AT and T completed the spinoff of AT and T Broadband in November. The division was merged with Comcast Corporation.
For the whole of 2002, AT and T reported a net loss of 13.08 billion dollars, as a 14.51-billion-dollar loss on discontinued operations dragged it down from a net profit of 9.15 billion dollars in 2001.
Revenue for 2002 was down 10.4 percent at 37.83 billion dollars.
djw/aln
REUTERS[ TUESDAY, JANUARY 28, 2003 03:35:02 PM ]
TOKYO: Japanese electronics conglomerate NEC and telecoms equipment maker Oki Electric Industry said on Tuesday they would cooperate in offering internet protocol phone systems for corporate customers.
Details will be announced at a joint news conference slated for 3.30 pm (0630 GMT).
IP systems carry voice over packet-based networks controlled by routers, which are cheaper to build than conventional telephone networks with costly circuit-switching systems.
Companies are increasingly looking at IP as an alternative to conventional telephony as its functionality and voice quality improve.
Nippon Telegraph and Telephone, Japan's dominant telecoms operator, said last year in a three-year business plan that it will focus resources on expanding its IP network, halting in principle fresh investments in its conventional telephone network.
That prompted Oki and NEC, major makers of equipment for conventional phone networks, to look for new sources of revenue.
Shares in NEC closed morning trade down 1.91 per cent at 461 yen, while Oki fell 1.42 per cent to 208 yen. The Nikkei average slid 1.01 per cent.
>BellSouth Revenues Down but DSL Up
>BellSouth just reported end-of-the-year financial results, with
>revenues
>for the year at $18.23 billion, a decrease of 4 percent from the $18.98
>billion a year ago. Net income was $1.42 billion, down 44.6 percent from
>the $2.57 billion of a year ago. Although BellSouth did not say what
>geographical areas would be covered, the area codes offered on its Web
>site include all the cities covered by Vonage, which covers most of the
>major metropolitan areas in the United States.
>
>BellSouth just reported DSL figures, and has now reached 1,021,000,
>growth
>of 65 percent over the 620,500 DSL subscribers it reported at the end of
>2001. The company has been one of the most aggressive in pushing out DSL,
>and a year ago the service was available to 70 percent of its customer
>base, or 15.5 phone lines. It is likely that the telco now has more than a
>million DSL subscribers, its goal for 2002.
>
>Vonage has been growing rapidly since its launch in August 2002, and
>just
>reported that it has 10,000 subscribers. The company did its first TV spot
>advertising the week of Jan. 13, and is planning direct-marketing
>advertising on television as well.
>
>To VoIP or Not To VoIP
>There are several forces at work, pro and con, in the RBOC's decision
>to
>deploy a flat-rate hosted voice-over-IP service, which uses technology
>that it has not yet deployed anywhere in its network.
>
>Though there is much focus on the technology issues between traditional
>and IP voice, one of the most interesting, yet risky, aspects of the
>Vonage service for an incumbent is that is flat-rate. Flat-rate services
>can be very attractive to consumers and reduce billing complexity, but it
>can also, in the short term, reduce revenues. A telco, such as BellSouth,
>that has just reported a drop in revenues may not be keen on cannibalizing
>its existing business.
>
>"I think they also get the opportunity essentially to keep their
>clients,"
>says Danny Klein, telecom infrastructure analyst for
>
>on Vonage. "If this does impact the market on a large scale, then there is
>going to be a lot of defection from traditional RBOC services to flat-fee
>calling services like Vonage. So though they could be cannibalizing their
>own sales, they are keeping the customer.
>
>Ownership of customers is important because, even if basic voice
>revenues
>go down, the company can always market other services to them. If
>BellSouth keeps ownership of the customer could still market other
>services to them. "It is certainly not characteristic of RBOCs or service
>providers in general to take the pre-emptive move of cannibalizing their
>own sales to add services, though that is the modern way to think," Klein adds.
>
>Klein observes,"This is almost a complementary service" to their
>traditional consumer offerings. It works only with a broadband connection,
>so you need either a DSL line into the home or cable. If BellSouth could
>combine them and offer a BellSouth DSL line plus Vonage service, it is a
>way to attract more DSL customers."
>
>Also, by packaging the two services together, a telco might be able to
>increase price and margins, and still give Vonage its cut. "So instead of
>offering a $40 service, they could offer a $50 service plus the DSL line.
>If customers pay $90 for DSL plus unlimited local plus domestic long
>distance, it's a less-than-$100 phone bill for all communications. It is
>almost like a triple play on the wireline side," Klein says.
>
>One could theorize that, if the BellSouth trial of these services is
>successful, it could launch its own in-house version and go into direct
>competition with Vonage and the other consumer VoIP services, such as
>Packet8, that are poised for commercial launch. Or it could simply buy up
>Vonage and absorb the service into its offerings.
>
>Either way, it seems inevitable that the small VoIP services will find
>competition in the long term from the telcos, which are not about to cede
>their consumer and small-business customer base to competitors.
>
> >>>>>>>>>>>>>>>>>>>
BEDMINSTER, New Jersey, Jan 23 (AFP) - Telecommunications giant AT and T's shares plunged 20 percent Thursday as it forecast sliding revenue in the year ahead.
AT and T swung into profit in the fourth quarter of 2002, but only
because
of the sale of its cable Internet operations, it said in a statement. It lost more than 13 billion dollars for the full year.
"AT and T said that it does not yet see a significant turnaround in the overall business services industry and, as a result, expects total telecom industry spending will be down again in 2003," it said.
On Wall Street, AT and T shares plummeted 5.09 dollars or 20.10 percent
to
20.23 dollars in early afternoon trade.
"The company also provided limited 2003 guidance, which does not paint a very encouraging picture for next year," Morgan Stanley analyst Simon Flannery said.
ATT Corp chief financial officer Tom Horton said the company also was abandoning the practice of providing quarterly and annual earnings per share forecasts.
"The goal will be to provide investors with additional financial and operational metrics to understand the key value drivers of the business," he said.
The decision follows in the footsteps of Coca-Cola Inc, Gillette Co, and McDonald's Corp.
In the fourth quarter, AT and T made a net profit of 516 million dollars, or 66 cents a share, after raking in 1.32 billion dollars from the sale of its AT and T Broadband division.
That compared to a year-earlier loss of 1.39 billion dollars, or 1.97 dollars a share.
Sales slumped 8.6 percent to 9.29 billion dollars in the quarter.
"We had solid operating results in the fourth quarter, reflecting our execution of the basics," said AT and T chairman and chief executive David Dorman.
"We saw continued growth in our local voice and data businesses despite
an
unsettled economic environment," he said in a statement.
"We are entering 2003 with a strong focus on meeting customer needs, improving shareowner value and maintaining our financial discipline and flexibility."
AT and T said it expected earnings per share in 2003 of 50 to 55 cents a share.
The business and consumer divisions both expected revenue to decline, albeit at a slower rate than in 2002.
AT and T completed the spinoff of AT and T Broadband in November. The division was merged with Comcast Corporation.
For the whole of 2002, AT and T reported a net loss of 13.08 billion dollars, as a 14.51-billion-dollar loss on discontinued operations dragged it down from a net profit of 9.15 billion dollars in 2001.
Revenue for 2002 was down 10.4 percent at 37.83 billion dollars.
djw/aln
REUTERS[ TUESDAY, JANUARY 28, 2003 03:35:02 PM ]
TOKYO: Japanese electronics conglomerate NEC and telecoms equipment maker Oki Electric Industry said on Tuesday they would cooperate in offering internet protocol phone systems for corporate customers.
Details will be announced at a joint news conference slated for 3.30 pm (0630 GMT).
IP systems carry voice over packet-based networks controlled by routers, which are cheaper to build than conventional telephone networks with costly circuit-switching systems.
Companies are increasingly looking at IP as an alternative to conventional telephony as its functionality and voice quality improve.
Nippon Telegraph and Telephone, Japan's dominant telecoms operator, said last year in a three-year business plan that it will focus resources on expanding its IP network, halting in principle fresh investments in its conventional telephone network.
That prompted Oki and NEC, major makers of equipment for conventional phone networks, to look for new sources of revenue.
Shares in NEC closed morning trade down 1.91 per cent at 461 yen, while Oki fell 1.42 per cent to 208 yen. The Nikkei average slid 1.01 per cent.
From Rich Shockey:
SANTA CLARA, Calif.--(BUSINESS WIRE)--Dec. 16, 2002--Covad
>Communications (OTCBB:COVD) introduced a voice and Internet access
>bundled service designed for small businesses in the San Francisco Bay
>Area. TeleXchange(SM) Integrated Services offers both business quality
>voice and data at up to 40 percent savings over phone company
>providers.
> "Popularizing broadband just found its voice as we introduce a
>bundled service to new and current customers in the Bay Area," said
>Todd Kiehn, Covad group product manager for voice services. "This
>popular bundle of services is designed to meet business needs for
>quality, convenience, features and value that can make the small
>business owner's life easier."
> TeleXchange will provide up to 24 full-featured phone lines and a
>high-speed connection to the Internet over one digital subscriber line
>(DSL) connection. The cost-effective bundled services are billed on one
>easy-to-read monthly statement. Covad provides a single number to call
>for both voice and data customer support at any time, 24 hours a day,
>seven days a week. A Covad professional installer handles service
>installation.
> Available through Covad Direct, TeleXchange is initially available
>exclusively in the San Francisco Bay area. Covad expects to make the
>service available in additional markets throughout 2003.
> Covad has special introductory offers of free installation and free
>equipment and activation after rebate and credit.
> "Customers are looking for real choices in providers of business
>communications services basics and Covad has a strong history of
>reliability and quality," said Kiehn. "We expect that this quality,
>along with the simplicity, convenience and value of TeleXchange, will
>make Covad a popular choice."
> "Small businesses have always gotten the short end of the stick
>when it comes to the best the next generation network has to offer,
>particularly when it comes to bundled voice and data services," said
>Pat Hurley, DSL analyst with TeleChoice, Inc. "Services like Covad's
>TeleXchange are going to find a pent up market demand for the one-stop
>shopping that other larger companies have been getting for years."
>
> Voice Services
>
> Phone services include unlimited local calling, with bundles of
>long distance minutes included. TeleXchange also allows for access to
>directory and operator services and long distance calling. Key calling
>features like Caller ID, Call Waiting and 3-Way Calling are included at
>no extra cost.
> Covad's expects its customers to save up to 40 percent each month
>by switching to Covad from current local and long-distance phone
>companies. According to industry data and current competitor prices, a
>Bay Area small business with four telephone lines could spend as much
>as $330 each month on phone service, compared with Covad's $200 price
>for the four-line bundle, not including the required Covad DSL service.
> TeleXchange's quality and sound are indistinguishable from
>standard telephone service. Covad's network utilizes a high quality
>asynchronous transfer mode (ATM) backbone, which provides reliable
>business quality voice and data services. The voice service is carried
>through Covad's data network and connected to the public telephone
>network in the Bay Area.
> "The 'V' in Covad originally stood for voice, so the network was
>designed for this product by our network architects," said Charlie
>Hoffman, Covad CEO and president. "They understood that small
>businesses require top quality, but shouldn't have to pay a premium.
>Our reliable ATM network provides that high quality service
>efficiently and cost-effectively."
> Covad has partnered with Focal Communications, a leading national
>provider of local phone and data communications, to provide the voice
>services network for TeleXchange. Focal owns its own network and is
>not dependent on purchasing wholesale services from the regional phone
>companies.
>
> Data Services
>
> TeleXchange bundle provides high-speed Internet access with
>business ISP options, including business e-mail, flexible IP address
>options, web hosting, and custom domain name services. Data speeds are
>symmetric, providing equally fast bandwidth for uploading and
>downloading data. Currently, TeleXchange is DSL-based, with a T1
>product expected to be introduced with the national expansion.
> The equipment at the customer site includes an integrated access
>device, which combines voice and data on a single DSL line. Both
>signals connect to Covad's DSL equipment in the local central office.
>From there, data signals are routed on the Covad ATM network to the
>Internet, while voice signals are connected to the telephone network on
>a separate, high-quality ATM connection.
> TeleXchange will be managed online by customers through Covad's
>SMART account manager. Customers will be able to upgrade and downgrade
>their Internet access speeds, add and subtract voice lines, modify
>feature settings, review invoices and call records, and check
>troubleshooting tips. New business DSL service is typically installed
>in 20 days, with the voice services available about five days after the
>DSL is installed. Customers choosing to keep their current telephone
>numbers may experience a longer interval for voice availability.
> TeleXchange requires a one-year term agreement. However, the
>service can be ordered for 30 days risk-free as part of Covad's
>Satisfaction Guaranteed policy.
> TeleXchange is available from Covad Direct by calling 800/636-3500
>or from the Covad web site at www.covad.com/voice.
>
> About Covad Communications
>
> Covad is a leading national broadband service provider of
>high-speed Internet and network access utilizing Digital Subscriber
>Line (DSL) technology. It offers DSL, T1, managed security, IP and
>dial-up services and bundled voice and data services directly through
>Covad and through Internet Service Providers, value-added resellers,
>telecommunications carriers and affinity groups to small and
>medium-sized businesses and home users. Covad services are currently
>available across the United States in 94 of the top Metropolitan
>Statistical Areas (MSAs). Covad's network currently covers more than 40
>million homes and business and reaches approximately 40 to 45 percent
>of all US homes and businesses. Corporate headquarters is located at
>3420 Central Expressway, Santa Clara, CA 95051. Telephone:
>888/GO-COVAD. Web site: www.covad.com.
>
> Safe Harbor Statement under the Private Securities Litigation
>Reform Act of 1995:
>
> The statements contained in this press release that are not
>historical facts are "forward-looking statements," including the
>statements regarding the rollout of TeleXchange services outside of San
>Francisco, as well as statements made by the president and CEO and the
>group product manager and the assumptions underlying such statements.
>Actual events or results may differ materially as a result of risks
>facing Covad or actual results differing from the assumptions
>underlying such statements. Such risks and assumptions include, but are
>not limited to, Covad's ability to continue as a going concern, to
>continue to service and support its customers, to successfully market
>its services to current and new customers, to manage the consolidation
>of sales to a fewer number of wholesale customers, to successfully
>migrate end users, Covad's ability to generate customer demand, to
>achieve acceptable pricing, to respond to competition, to develop and
>maintain strategic relationships, to manage growth, to receive timely
>payment from customers, to access regions and negotiate suitable
>interconnection agreements, all in a timely manner, at reasonable costs
>and on satisfactory terms and conditions, as well as regulatory,
>legislative, and judicial developments and the absence of an adverse
>result in litigation against Covad. Covad disclaims any obligation to
>update any forward-looking statement contained in this press release.
>All forward-looking statements are expressly qualified in their
>entirety by the "Risk Factors" and other cautionary statements included
>in Covad's SEC Annual Report on Form 10-K for the year ended Dec. 31,
>2001 and its Report on Form 10-Q for the period ended Sept. 30, 2002.
SANTA CLARA, Calif.--(BUSINESS WIRE)--Dec. 16, 2002--Covad
>Communications (OTCBB:COVD) introduced a voice and Internet access
>bundled service designed for small businesses in the San Francisco Bay
>Area. TeleXchange(SM) Integrated Services offers both business quality
>voice and data at up to 40 percent savings over phone company
>providers.
> "Popularizing broadband just found its voice as we introduce a
>bundled service to new and current customers in the Bay Area," said
>Todd Kiehn, Covad group product manager for voice services. "This
>popular bundle of services is designed to meet business needs for
>quality, convenience, features and value that can make the small
>business owner's life easier."
> TeleXchange will provide up to 24 full-featured phone lines and a
>high-speed connection to the Internet over one digital subscriber line
>(DSL) connection. The cost-effective bundled services are billed on one
>easy-to-read monthly statement. Covad provides a single number to call
>for both voice and data customer support at any time, 24 hours a day,
>seven days a week. A Covad professional installer handles service
>installation.
> Available through Covad Direct, TeleXchange is initially available
>exclusively in the San Francisco Bay area. Covad expects to make the
>service available in additional markets throughout 2003.
> Covad has special introductory offers of free installation and free
>equipment and activation after rebate and credit.
> "Customers are looking for real choices in providers of business
>communications services basics and Covad has a strong history of
>reliability and quality," said Kiehn. "We expect that this quality,
>along with the simplicity, convenience and value of TeleXchange, will
>make Covad a popular choice."
> "Small businesses have always gotten the short end of the stick
>when it comes to the best the next generation network has to offer,
>particularly when it comes to bundled voice and data services," said
>Pat Hurley, DSL analyst with TeleChoice, Inc. "Services like Covad's
>TeleXchange are going to find a pent up market demand for the one-stop
>shopping that other larger companies have been getting for years."
>
> Voice Services
>
> Phone services include unlimited local calling, with bundles of
>long distance minutes included. TeleXchange also allows for access to
>directory and operator services and long distance calling. Key calling
>features like Caller ID, Call Waiting and 3-Way Calling are included at
>no extra cost.
> Covad's expects its customers to save up to 40 percent each month
>by switching to Covad from current local and long-distance phone
>companies. According to industry data and current competitor prices, a
>Bay Area small business with four telephone lines could spend as much
>as $330 each month on phone service, compared with Covad's $200 price
>for the four-line bundle, not including the required Covad DSL service.
> TeleXchange's quality and sound are indistinguishable from
>standard telephone service. Covad's network utilizes a high quality
>asynchronous transfer mode (ATM) backbone, which provides reliable
>business quality voice and data services. The voice service is carried
>through Covad's data network and connected to the public telephone
>network in the Bay Area.
> "The 'V' in Covad originally stood for voice, so the network was
>designed for this product by our network architects," said Charlie
>Hoffman, Covad CEO and president. "They understood that small
>businesses require top quality, but shouldn't have to pay a premium.
>Our reliable ATM network provides that high quality service
>efficiently and cost-effectively."
> Covad has partnered with Focal Communications, a leading national
>provider of local phone and data communications, to provide the voice
>services network for TeleXchange. Focal owns its own network and is
>not dependent on purchasing wholesale services from the regional phone
>companies.
>
> Data Services
>
> TeleXchange bundle provides high-speed Internet access with
>business ISP options, including business e-mail, flexible IP address
>options, web hosting, and custom domain name services. Data speeds are
>symmetric, providing equally fast bandwidth for uploading and
>downloading data. Currently, TeleXchange is DSL-based, with a T1
>product expected to be introduced with the national expansion.
> The equipment at the customer site includes an integrated access
>device, which combines voice and data on a single DSL line. Both
>signals connect to Covad's DSL equipment in the local central office.
>From there, data signals are routed on the Covad ATM network to the
>Internet, while voice signals are connected to the telephone network on
>a separate, high-quality ATM connection.
> TeleXchange will be managed online by customers through Covad's
>SMART account manager. Customers will be able to upgrade and downgrade
>their Internet access speeds, add and subtract voice lines, modify
>feature settings, review invoices and call records, and check
>troubleshooting tips. New business DSL service is typically installed
>in 20 days, with the voice services available about five days after the
>DSL is installed. Customers choosing to keep their current telephone
>numbers may experience a longer interval for voice availability.
> TeleXchange requires a one-year term agreement. However, the
>service can be ordered for 30 days risk-free as part of Covad's
>Satisfaction Guaranteed policy.
> TeleXchange is available from Covad Direct by calling 800/636-3500
>or from the Covad web site at www.covad.com/voice.
>
> About Covad Communications
>
> Covad is a leading national broadband service provider of
>high-speed Internet and network access utilizing Digital Subscriber
>Line (DSL) technology. It offers DSL, T1, managed security, IP and
>dial-up services and bundled voice and data services directly through
>Covad and through Internet Service Providers, value-added resellers,
>telecommunications carriers and affinity groups to small and
>medium-sized businesses and home users. Covad services are currently
>available across the United States in 94 of the top Metropolitan
>Statistical Areas (MSAs). Covad's network currently covers more than 40
>million homes and business and reaches approximately 40 to 45 percent
>of all US homes and businesses. Corporate headquarters is located at
>3420 Central Expressway, Santa Clara, CA 95051. Telephone:
>888/GO-COVAD. Web site: www.covad.com.
>
> Safe Harbor Statement under the Private Securities Litigation
>Reform Act of 1995:
>
> The statements contained in this press release that are not
>historical facts are "forward-looking statements," including the
>statements regarding the rollout of TeleXchange services outside of San
>Francisco, as well as statements made by the president and CEO and the
>group product manager and the assumptions underlying such statements.
>Actual events or results may differ materially as a result of risks
>facing Covad or actual results differing from the assumptions
>underlying such statements. Such risks and assumptions include, but are
>not limited to, Covad's ability to continue as a going concern, to
>continue to service and support its customers, to successfully market
>its services to current and new customers, to manage the consolidation
>of sales to a fewer number of wholesale customers, to successfully
>migrate end users, Covad's ability to generate customer demand, to
>achieve acceptable pricing, to respond to competition, to develop and
>maintain strategic relationships, to manage growth, to receive timely
>payment from customers, to access regions and negotiate suitable
>interconnection agreements, all in a timely manner, at reasonable costs
>and on satisfactory terms and conditions, as well as regulatory,
>legislative, and judicial developments and the absence of an adverse
>result in litigation against Covad. Covad disclaims any obligation to
>update any forward-looking statement contained in this press release.
>All forward-looking statements are expressly qualified in their
>entirety by the "Risk Factors" and other cautionary statements included
>in Covad's SEC Annual Report on Form 10-K for the year ended Dec. 31,
>2001 and its Report on Form 10-Q for the period ended Sept. 30, 2002.
From Rich Shockey:
TOKYO, Nov 15 (AFP) - Four major Japanese firms, including KDDI Corp. and NEC Corp., said Friday they would link up to join the race to provide cheap phone calls over the Internet.
"We hope this will be a factor in getting more customers," said Fumiyoshi Kitayama, a spokesman for technology titan NEC.
The free service will start in April and be offered to new users and to
the
group's current 1.2 million broadband Internet subscribers, a statement said.
The group, which also includes electronics giant Matsushita Electric Industrial Co. Ltd. and Japan Telecom Co. Ltd., hopes its service will help draw its combined 10 million subscriber-base onto the firms' respective broadband services, Kitayama said.
"That is our final goal," he said.
While the attachment needed to link a person's computer to their
telephone
will be free during the trial period starting in December, the group is to decide on a rental fee before its launch in April.
Users must also pay their normal Internet subscription fees, around 3,200 yen (27 dollars) a month, and pay regular phone charges if calling a normal land line. Phone calls between Web-based phone users will be free.
The move follows a similar announcement by Sony Communication Network Corp., Nifty Corp. and NTT Communications Corp. on Thursday to jump on the cheap Web-based call bandwagon, with an eye to starting the service by March.
The latter group had some 1.34 million broadband customers that could use the service with the help of an attachment, and 10.8 million Internet subscribers in total.
The latest announcements show the interest in Web-based calls, which were first introduced to Japan by Yahoo Japan Corp. in January of this year.
Since its BB phone service began, some 770,000 customers have signed up.
Yahoo Japan spokesman Masanori Satake said the Web phone service was
key to
boosting the number of subscribers to its Yahoo BB broadband service to 1.21 million since it began last September.
"Our BB phone service has been a major tractor pulling our subscription base upward," Satake said. "It was the big difference between us and our competitors."
rn/dmh/dv
Japan-IT-telecom
TOKYO, Nov 15 (AFP) - Four major Japanese firms, including KDDI Corp. and NEC Corp., said Friday they would link up to join the race to provide cheap phone calls over the Internet.
"We hope this will be a factor in getting more customers," said Fumiyoshi Kitayama, a spokesman for technology titan NEC.
The free service will start in April and be offered to new users and to
the
group's current 1.2 million broadband Internet subscribers, a statement said.
The group, which also includes electronics giant Matsushita Electric Industrial Co. Ltd. and Japan Telecom Co. Ltd., hopes its service will help draw its combined 10 million subscriber-base onto the firms' respective broadband services, Kitayama said.
"That is our final goal," he said.
While the attachment needed to link a person's computer to their
telephone
will be free during the trial period starting in December, the group is to decide on a rental fee before its launch in April.
Users must also pay their normal Internet subscription fees, around 3,200 yen (27 dollars) a month, and pay regular phone charges if calling a normal land line. Phone calls between Web-based phone users will be free.
The move follows a similar announcement by Sony Communication Network Corp., Nifty Corp. and NTT Communications Corp. on Thursday to jump on the cheap Web-based call bandwagon, with an eye to starting the service by March.
The latter group had some 1.34 million broadband customers that could use the service with the help of an attachment, and 10.8 million Internet subscribers in total.
The latest announcements show the interest in Web-based calls, which were first introduced to Japan by Yahoo Japan Corp. in January of this year.
Since its BB phone service began, some 770,000 customers have signed up.
Yahoo Japan spokesman Masanori Satake said the Web phone service was
key to
boosting the number of subscribers to its Yahoo BB broadband service to 1.21 million since it began last September.
"Our BB phone service has been a major tractor pulling our subscription base upward," Satake said. "It was the big difference between us and our competitors."
rn/dmh/dv
Japan-IT-telecom
Saturday, June 28, 2003
The Calm before the Storm (NGN2003)
In talking to many people about the current state of the network and
telecom industries, there seems to be a general perception that things
are returning to "normal." As in the pre-bubble days, people are once
again focused on long-term sustainable business models instead of the
quick hit. Most of the service provider bankruptcies likely to happen
have now taken place, many of the "me-too" startup network equipment
vendors have fallen by the wayside, and the funding of investments has
returned to early-to-mid 1990s levels. While some further industry
consolidation is still likely to occur, the industry appears to be
stabilizing.
So what does this mean for the future of the industry, including
opportunities for next generation technologies, products, and services?
Does recovery from the telecom bust and a return to a sense of normalcy
mean stability? Will it limit the potential for innovation or new
business models?
If you followed my (Dave's) 3-part series earlier this year in Business
Communications Review: "The Future of the ILECs," it should be clear
that the current business model of the local carriers is not
sustainable. The ILECs are currently suffering from flat or declining
revenues, high debt, UNE-P penetration by competitors, losses on DSL,
cable broadband competition, wireless services substitution, high cost
structures, inefficient operations, and competing demands by unions,
stockholders, customers, regulators, and politicians. While the ILECs
have some opportunities to grow their data services revenues and expand
their entry into long distance, these services are unlikely to offset
the expected continuing loss of voice phone lines. The health and
welfare of the ILECs are particularly important in understanding the
future of the telecom industry, as the ILECs are often viewed as models
of stability relative to the other carriers, and they tend to dominate
CAPEX spending, even in its current depressed state.
But the biggest challenge to the ILECs hasn't really hit them yet - the
disruptive impact of IP on voice. With the rapid growth and penetration
of residential broadband in many geographies, there will soon exist a
critical mass of potential customers for a new service: consumer IP
voice over broadband. With residential broadband, voice becomes just
another application running over the subscriber's broadband Internet
connection, albeit one that providers can charge additionally for. Many
ILECs are interested in the "triple play" of bundling voice and video
along with broadband Internet access.
However residential VoIP also represents a major threat to incumbent
voice carriers - witness how Yahoo Broadband has been hurting NTT in
Japan. There may be minimal barriers to entry for new providers to
independently offer phone services over the broadband services of the
ILECs (i.e., DSL) or cable providers. This is already starting to
happen in the US with services from like Vonage and Packet8.
As more cable companies and larger enterprises implement voice over IP,
an increasing percentage of their phone calls will be established
between IP telephony users, yet these calls today are forced to traverse
the PSTN with costly, inefficient, and performance-robbing
packet-to-circuit-to-packet conversions, requiring multiple media
gateways. Thus there will be a large incentive for these organizations
to establish direct VoIP peering relationships based on standards like
SIP and ENUM, bypassing the traditional carriers and leading to a
decline in traditional carrier voice revenues. As standards like ENUM
gain traction, the potential will exist for anyone to become a "phone
company." All it will take is a broadband connection, a DNS server
containing ENUM records, a voice call-control server (such as
Microsoft's upcoming "Greenwich" Real Time Communications Server
incorporating voice, video, data collaboration and presence management),
and a VOIP media gateway with a few phone lines.
As if this weren't enough of a threat to the core business of the
carriers, the growth of SIP-based IP telephony will facilitate the
convergence of voice communications with user instant messaging/presence
applications and services. As this happens, we may have to start
thinking of Microsoft, AOL, Yahoo, and other organizations that operate
public "buddy list" directories as phone companies.
The existing telecom regulatory framework is woefully inadequate to deal
with this new user/consumer-driven voice over IP environment, and the
incumbent carriers will use every power at their disposal - including
government regulation and legislation - to try and slow their loss of
voice revenues. But it will be awfully hard, if not impossible, for
them to avoid the approaching VoIP storm. The current relative
stability being enjoyed by the ILECs may be just the calm before the
storm.
What opportunities will be generated by the convergence of IP voice with
IM/presence, SIP, ENUM, and residential broadband, and how can or should
the carriers respond? At our upcoming 18th annual Next Generation
Networks conference, November 3-7 in Boston, MA, we've organized
multiple sessions to address this key issue area, including Consumer
VoIP: Opportunities and Approaches; Enterprise Voice: SIP, ENUM, and
Other Developments; the debate Network Convergence: Now or Never; and
Service Provider Business Issues: Leaving the Bottom Behind. More
information about NGN 2003 is available at http://www.ngn2003.com.
We look forward to seeing you this fall.
Dave Passmore
NGN2003 Conference Co-Chair
Research Director, Burton Group
John McQuillan
NGN 2003 Conference Co-Chair
President, McQuillan Ventures
In talking to many people about the current state of the network and
telecom industries, there seems to be a general perception that things
are returning to "normal." As in the pre-bubble days, people are once
again focused on long-term sustainable business models instead of the
quick hit. Most of the service provider bankruptcies likely to happen
have now taken place, many of the "me-too" startup network equipment
vendors have fallen by the wayside, and the funding of investments has
returned to early-to-mid 1990s levels. While some further industry
consolidation is still likely to occur, the industry appears to be
stabilizing.
So what does this mean for the future of the industry, including
opportunities for next generation technologies, products, and services?
Does recovery from the telecom bust and a return to a sense of normalcy
mean stability? Will it limit the potential for innovation or new
business models?
If you followed my (Dave's) 3-part series earlier this year in Business
Communications Review: "The Future of the ILECs," it should be clear
that the current business model of the local carriers is not
sustainable. The ILECs are currently suffering from flat or declining
revenues, high debt, UNE-P penetration by competitors, losses on DSL,
cable broadband competition, wireless services substitution, high cost
structures, inefficient operations, and competing demands by unions,
stockholders, customers, regulators, and politicians. While the ILECs
have some opportunities to grow their data services revenues and expand
their entry into long distance, these services are unlikely to offset
the expected continuing loss of voice phone lines. The health and
welfare of the ILECs are particularly important in understanding the
future of the telecom industry, as the ILECs are often viewed as models
of stability relative to the other carriers, and they tend to dominate
CAPEX spending, even in its current depressed state.
But the biggest challenge to the ILECs hasn't really hit them yet - the
disruptive impact of IP on voice. With the rapid growth and penetration
of residential broadband in many geographies, there will soon exist a
critical mass of potential customers for a new service: consumer IP
voice over broadband. With residential broadband, voice becomes just
another application running over the subscriber's broadband Internet
connection, albeit one that providers can charge additionally for. Many
ILECs are interested in the "triple play" of bundling voice and video
along with broadband Internet access.
However residential VoIP also represents a major threat to incumbent
voice carriers - witness how Yahoo Broadband has been hurting NTT in
Japan. There may be minimal barriers to entry for new providers to
independently offer phone services over the broadband services of the
ILECs (i.e., DSL) or cable providers. This is already starting to
happen in the US with services from like Vonage and Packet8.
As more cable companies and larger enterprises implement voice over IP,
an increasing percentage of their phone calls will be established
between IP telephony users, yet these calls today are forced to traverse
the PSTN with costly, inefficient, and performance-robbing
packet-to-circuit-to-packet conversions, requiring multiple media
gateways. Thus there will be a large incentive for these organizations
to establish direct VoIP peering relationships based on standards like
SIP and ENUM, bypassing the traditional carriers and leading to a
decline in traditional carrier voice revenues. As standards like ENUM
gain traction, the potential will exist for anyone to become a "phone
company." All it will take is a broadband connection, a DNS server
containing ENUM records, a voice call-control server (such as
Microsoft's upcoming "Greenwich" Real Time Communications Server
incorporating voice, video, data collaboration and presence management),
and a VOIP media gateway with a few phone lines.
As if this weren't enough of a threat to the core business of the
carriers, the growth of SIP-based IP telephony will facilitate the
convergence of voice communications with user instant messaging/presence
applications and services. As this happens, we may have to start
thinking of Microsoft, AOL, Yahoo, and other organizations that operate
public "buddy list" directories as phone companies.
The existing telecom regulatory framework is woefully inadequate to deal
with this new user/consumer-driven voice over IP environment, and the
incumbent carriers will use every power at their disposal - including
government regulation and legislation - to try and slow their loss of
voice revenues. But it will be awfully hard, if not impossible, for
them to avoid the approaching VoIP storm. The current relative
stability being enjoyed by the ILECs may be just the calm before the
storm.
What opportunities will be generated by the convergence of IP voice with
IM/presence, SIP, ENUM, and residential broadband, and how can or should
the carriers respond? At our upcoming 18th annual Next Generation
Networks conference, November 3-7 in Boston, MA, we've organized
multiple sessions to address this key issue area, including Consumer
VoIP: Opportunities and Approaches; Enterprise Voice: SIP, ENUM, and
Other Developments; the debate Network Convergence: Now or Never; and
Service Provider Business Issues: Leaving the Bottom Behind. More
information about NGN 2003 is available at http://www.ngn2003.com.
We look forward to seeing you this fall.
Dave Passmore
NGN2003 Conference Co-Chair
Research Director, Burton Group
John McQuillan
NGN 2003 Conference Co-Chair
President, McQuillan Ventures
Started Blog on VoIP and ENUM
