& cplSiteName &

Independent Telcos: It's Time to Prepare

How IOCee It
How IOCee It
How IOCee It
2/25/2011

12:30 PM -- The independent telecom industry is sweating a bit these days, thanks in large part to the ongoing regulatory transition. The regulatory agencies are moving from rate-of-return regulation of voice services to some future scheme based on broadband. (See More Fear Than Loathing Among Rural Telcos.)

It’s a complex and convoluted process, full of uncertain outcomes, except for one important reality: The core product for local telcos in the next few years will be broadband and not voice.

That’s a certainty, and the time to prepare for that reality is now, not once the regulatory dust clears. One important factor of that preparation is building an innate ability to develop, market and sell new products.

In an IP-based broadband world, product development, a practice which currently doesn’t receive much attention, becomes paramount. All too often I see independent service providers pushing the role of product development onto an already overburdened marketing manager. That practice will need to change, and a standalone product development ecosystem needs to be built within the independent telco culture.

In a voice rate of return world (ROR), product development could be overlooked. While ROR has brought great stability to the independent telco world, it has also deprived it of this now ultra-important role. Products that include IP voice, broadband apps, enterprise/cloud capabilities and wireless integration will be the ones that engage and keep the customers of the future.

Is your company prepared and equipped to develop and launch them?

— Bernardin Arnason, Managing Partner, Pivot Group , and Publisher, Telecompetitor

(19)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 2   >   >>
DCITDave
DCITDave
12/5/2012 | 5:12:03 PM
re: Independent Telcos: It's Time to Prepare


I don't know that independent IOCs really feel that threatened given that they are, in most cases, the only broadband game in town. The gov't doesn't like big, national monopolies but it doesn't seem to care about regional ones that provide voice services.


Frankly, the best thing that could happen to some of these smaller IOCs is a broadband wireless competitor knocking them on their ass while the government starts diverting their welfare checks to fund broadband projects.

DCITDave
DCITDave
12/5/2012 | 5:12:02 PM
re: Independent Telcos: It's Time to Prepare


For those IOCs that are in a competitive pinch, companies like Calix, Cyan and others are actually developing services themselves -- some hosted, some not -- and we'll have a nice story on those efforts on Monday.

rogermusick
rogermusick
12/5/2012 | 5:12:01 PM
re: Independent Telcos: It's Time to Prepare

The industry is always changing and some companies adapt better/faster than others.  In a truly competitive environment new product innovation, sales, marketing and cost control become more important.  I also agree that it is important to be proactive and prepare for the future.

 

Broadband is simply a pipe to deliver IP services – voice is just one of those services.  If the FCC wants to stimulate broadband deployment in the IOC areas they should make the service that is driving much of the broadband demand today more viable for the IOCs.  This can be achieved by the FCC requiring the video content owners to sell their content to the IOCs at the same price per customer that the large satellite and cable providers pay.  This would improve the business case for broadband deployment with no negative ramifications.  This is EQAUL ACCESS to content for rural America.

 

I don’t agree with Mr. Harvey’s comments. 

 

In many, if not most, populated areas the IOCs have a number of competitors including the Cable provider, wireless and satellite providers already.  If they have no competitor it is because the area they serve cannot support competition because there is no business case to serve these customers.   The FCC is proposing to reduce or eliminate the USF payments to many wireless carries because their compensation should not be based on the IOC’s cost to provide service as allowed by the current system.

 

What Mr. Harvey calls welfare checks to the “smaller IOCs” has already been used by these smaller IOCs to build broadband facilities to their customers in a large portion of the US.  As was confirmed by the FCC’s own National Broadband Plan, the largest areas that do not have broadband are served by the large communications companies not the smaller IOCs.

rogermusick
rogermusick
12/5/2012 | 5:12:00 PM
re: Independent Telcos: It's Time to Prepare

Net neutrality requires broadband providers to treat all content equally shouldn’t content providers be required to treat all customers equally.

 

Why did the FCC require FG A and FG B? Because they thought it was in the public interest and they wanted to stimulate competition in the LD market.  How about when they required line sharing for DSL? 

DCITDave
DCITDave
12/5/2012 | 5:12:00 PM
re: Independent Telcos: It's Time to Prepare


I realize we're talking in generalities about small telcos, so let's hone in on how to make broadband a better business for rural operators.


Why should the government require someone who sells content to give up the ability to charge what they want? What does Starz or Disney get for helping the business case for a few small telcos?  


re: This can be achieved by the FCC requiring the video content owners to sell their content to the IOCs at the same price per customer that the large satellite and cable providers pay.

pivotmedia
pivotmedia
12/5/2012 | 5:11:59 PM
re: Independent Telcos: It's Time to Prepare


I would argue this point:


You guys do know that only a small fraction of the IOCs are RoR carriers, most of even the small telcos are rate cap carriers.  


While number of access lines under RoR is relatively small (as a percentage of total access lines), the number of small rural IOCs who are under the RoR system far outnumber price cap carriers.

pivotmedia
pivotmedia
12/5/2012 | 5:11:59 PM
re: Independent Telcos: It's Time to Prepare


Interesting discussion. It is a complex issue. Sometimes I fear the arguments and pending policies are framed by the 'exceptions rather than the rules.' There is definitely a perception problem.


As Roger points out in rebuttal of Phil's comments, there is certainly a fair amount of competition among IOCs, intensely so in some markets. Where there isn't competition, there's probably good reason.


Like any system, the ROR one certainly has its abusers and some waste. I probably wouldn't use the word 'welfare,' but the system is in need of reform. The issue is the reform is being driven by the perception of 'welfare' and other inefficient examples, the exceptions, rather than more common realities, the rules.


I'm not even going to touch the content/net neutrality debate, which is full of landmines, other than to say the content business is way out of wack. Their insatiable desire to drive up the value of their intellectual property at any cost will eventually come back to haunt them in my opinion. At what point do consumers look at their cable bill and say enough is enough and move on?

paolo.franzoi
paolo.franzoi
12/5/2012 | 5:11:59 PM
re: Independent Telcos: It's Time to Prepare


 


You guys do know that only a small fraction of the IOCs are RoR carriers, most of even the small telcos are rate cap carriers.  I think we are confusing the terms RoR with supported via USF funds.  They are not the same.


 


seven

paolo.franzoi
paolo.franzoi
12/5/2012 | 5:11:58 PM
re: Independent Telcos: It's Time to Prepare


 


I would argue that completely.  I would argue that the number of carriers that are RoR carriers is a very small number as a total number of the IOCs - not lines but of the total number of the IOCs.


 


seven


 

pivotmedia
pivotmedia
12/5/2012 | 5:11:58 PM
re: Independent Telcos: It's Time to Prepare


You and I obviously have very different definitions of RoR or price cap or maybe IOCs, or maybe all.


I guess we'll just have to agree to disagree.

Page 1 / 2   >   >>
More Blogs from How IOCee It
10:00 AM The Metaswitch Forum reminds us that technology isn't really the stumbling block preventing carriers becoming more Internet-centric service providers
9:00 AM Windstream grows beyond its once rural ILEC status.
3:05 PM Reform of the Universal Service Fund and inter-carrier compensation system picks up support
12:00 PM Its Savvis acquisition has catapulted CenturyLink into the big league, and it's all happened so quickly
11:55 AM Cablevision retires the Bresnan name
Featured Video
Upcoming Live Events
October 22, 2019, Los Angeles, CA
November 5, 2019, London, England
November 7, 2019, London, UK
November 14, 2019, Maritim Hotel, Berlin
December 3-5, 2019, Vienna, Austria
December 3, 2019, New York, New York
March 16-18, 2020, Embassy Suites, Denver, Colorado
May 18-20, 2020, Irving Convention Center, Dallas, TX
All Upcoming Live Events