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technology has significantly improved in many ways over the past five years: network components are smaller and easier to deploy; newer technologies reduce the impact of rain-fade; wireless bandwidth capability is increasing, while deployment costs have come down. Yes, it is still a line-of-sight technology, but if that requirement can be met then, according to Gupta, the advantages of lower cost and much faster deployment can make wireless a compelling alternative to fiber.
I was interested in gathering opinions on Over-the-Top (OTT) services to discover if delegates from network providers generally thought these new services were good for the industry or a threat. Mostly the sentiment was that OTT applications like Facebook, MySpace, and YouTube increase usage and consume bandwidth, so this encourages customer adoption of broadband access, and makes them willing to spend more for higher |
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Mostly the sentiment was that OTT applications like Facebook, MySpace, and YouTube increase usage and consume bandwidth, so this encourages customer adoption of broadband access, and makes them willing to spend more for higher bandwidths. |
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and buy from each other. After all, who wants to add money to the coffers of the “big guys” if it can be avoided? It might just come back at you in the form of negative regulatory outcomes. So why not support each other? Arunas made an insightful observation stating the issue was a “people” problem more than a technical issue. Heaven knows the ASR/LSR process continues to be painful but this should merely be an obstacle to cooperation rather than a reason for non-cooperation. It appears there is a certain
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bandwidths. All good. However, as pointed out by Brady Adams, VP Engineering Ops at Grande, the issue with these services is that the impact on the network is unpredictable. Growth is not linear and can hit based on a number of factors off the radar of the network providers, causing unexpected congestion and degradation problems. On balance however, it’s probably preferable to handle a congestion problem than an under-utilization problem.
Consolidation and Collaboration
The RBOCs have reconsolidated. An issue for Tier 2/3 companies is how to compete and maintain market share against possible encroachment by the larger beasts. For the time being, the big guys seem to be preoccupied elsewhere and no doubt the Tier 2/3s hope that continues. However ,whether from fear of AT&T and Verizon, or other economic pressures, the news from the show is that consolidation and collaboration in the LEC and Tier 2 & 3 markets are an ongoing fact of life.
Arunas Chesonis of PAETEC suggests that the COMPTEL brothers should support each other |
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level of suspicion amongst some Tier 2 neighbors, if not an actual lack of trust. I can see how that could happen given the nature of this market. Companies like PAETEC, Zayo and many others have grown through acquisitions; a brother one day may become an acquisition target the next. I hesitate to use the term predatory but providing returns on shareholder investment can certainly inspire opportunistic behavior. I guess the question to be considered by a smaller player is this: Do I want to risk the LECs compromising my business through regulation or am I going to be gobbled up by a voracious neighbor? I’ll leave that to the readers to contemplate…
Another interesting phenomenon is the emergence of marketing consortia. I was talking to the Indatel folks who are a “Nationwide Team of Carriers.” I really do like the logo and the baseball motif (see www.Indatelgroup.org). This is a group of more than twenty regional carriers who have banded together for marketing purposes. I can see the advantages of contributing to a common brand, both in saving costs and
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