Net Neutrality Friday

So as I posted last week, I need to explain why Netflix is a problem for the ISPs. Most of what I think the ISPs complain about is jealousy. But Netflix is different.

Let me take Apple iTunes as the counter-example. ISPs complain that Apple is making a lot of money by having built a service that utilizes their network. The bulk of what iTunes does is file download. This is a model that has been around a very long time. The same is true for the App Store. Apple may be doing a much higher volume of transactions, but there is really nothing new. The Apps that are downloaded are a different matter and Netflix is one of them. The ISPs have tried to create their own App Stores, but consumers have seen no value to it. So when an ISP rails that companies like Apple are making money off their networks, I have no sympathy. Without companies like Apple, consumers have no need to buy big broadband pipes. These pipes are what is driving service provider revenue.

There is another problem here and one that is more subtle. We talk about Apple and Google, but many Internet Content companies have lost their shirts. You can’t compare all the money invested in all the companies, pick the winners and complain. When you are a product company like Apple, you have the opportunity to make a profit if you build a good profit. If you are an ISP, you will make money off your network. The question for an ISP is NOT will I make money, its WHEN will I make money.

But again Netflix is different. As of the Q413 report, Netflix has over 44M members. The service that is offered online is a streaming video service. If you recall last week, I talked about how streaming and particular video streaming puts pressure on the network. This pressure is NOT in the Access Network. The pressure is on the regional and metro networks. As I said last week, we take those portions of the network as free. The reason for that is the price model given to us by the ISPs. No consumer today sees the value in spending a dime more for a better metro or regional network. Most of them don’t know that it exists.

There is a second problem. If you remember the money exchange model with Telephone Companies, they paid each other for carrying traffic. If one way called the other more, then cash was actually settled. In the Internet world, there is no way to pay for traffic Asymmetry in most contracts. Traffic Symmetry was assumed. That again puts pressure on Regional and Metropolitan networks of ISPs.

It is this combination that is causing ISPs to dislike Netflix and try to find a way to bill them more. I do feel a bit of sympathy here for the ISPs. The ISPs are now trying to take this a step further and trying to create models in which one bit is worth more than another. They have taken some steps in that direction and that is where we will go next time.

Have a great weekend!

Jim Sackman
FocalPoint Business Coaching
http://www.jimsackman.focalpointcoaching.com/
We Focus On Your Business – Time, Team, Money, Exit
Business Coaching, Sales Training, Web Marketing, Behavioral Assessments, Financial Analysis
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Sonoma County: News and Notes

As we are really getting cranked up for the year, I think it is worth remembering that we all need to have clear, written goals for the year. If you have not built a plan already, then do so! If you are having making these goals, let me know.

Now to the business of Sonoma County. Tonight is the Awards Gala at the Santa Rosa Chamber of Commerce. I hope to see folks there and chat about business and pleasure. If you are in Sonoma County, you probably need to think about joining this Chamber. There is a good sized membership and lots of events to attend. Just keep it in mind.

Well, we got a tiny bit of rain last night. Nowhere near enough. All we can do is hope for more rain at the moment. We have to also think about conservation wherever we can. Take a look at the Sonoma County Economics Board Green Business website for ideas.

I heard a report on the radio that Single Family Home Sales were down nationally. That seems to be in line with what is going on inside Sonoma County. The thought is that the inventory issue that we see locally is the same nationally.

In about 2 weeks, we will have the 4Q reports from local public companies. I will be tuning in and reporting what I hear. This is particularly true about Cyan, which seems to be in a spot of trouble.

Finally, I want to send out a reminder about my Lunch and Learn event at noon on 2/13/14. Lunch will be provided by Chef Chris. This will be held at the Sonoma County Veterans Memorial Building. The topic is Time Management and is based on the work of Brian Tracy. Brian is the founder of FocalPoint. He the author of over 60 books and has lectured and consulted on a global basis. If you want to know more about this event, just let me know!

Jim Sackman
FocalPoint Business Coaching
http://www.jimsackman.focalpointcoaching.com/
We Focus On Your Business – Time, Team, Money, Exit
Business Coaching, Sales Training, Web Marketing, Behavioral Assessments, Financial Analysis

FiOS ONTs: Proliferation and Challenges

Once we got the bulk of the bugs run out of the BPON product Verizon began deploying in massive numbers. These are not cell phone numbers or iPod numbers but we got to the point that a business day might see 10,000 installs a day. At that rate, we were deploying on a monthly basis what many of the small competitors had done life of company.

The shear volume of this deployment created its own challenges. Networks like to have stability and really want to have no changes. Just having the network technician mucking about installing new cables and attaching more equipment led to problems. On top of that, we could tell when new region was introduced to FiOS. The initial failure rates climbed, then fell. This was all new technology and people had to learn. I think that is one thing that people miss in these big rollouts of new technology. Literally 10s of 1000s of people inside Verizon were impacted by FiOS. Imagine the amount of training and change that happens. I know people complain about Service Providers moving slowly, but watching this all unfold was a huge learning experience for me.

Well, the initial deployments were suburban for FiOS. There were many construction cost advantages to this, especially as we shook out the network. The Single Family Home ONT itself went through several revisions, but they all supported a similar number of interfaces. The reason for most of the changes was cost reduction.

We did have two other kinds of ONTs. They were targeted at specific segments: Multi-Dwelling Units (like Apartments) and Small Business Units. The former ramped up the number of phone ports and often used VDSL or VDSL2 as the link to the gateway inside the residence. The latter had T-1 ports. Both of these units failed and for different reasons.

The easier to talk about is the SBU (or MTU) ONTs. These failed because Verizon could not figure out how to manage T-1 lines off ONTs. To this day, I am not sure what the issue was. But we built several variants per our contract and they could work in the system. But making them work operationally for the field to deploy became an insurmountable challenge for Verizon. In the end, I think they gave people T-1 over Ethernet Adapters and called it done.

The MDU failure is a bit harder to explain. There was always the challenge of modularity. No matter what we built it would never match the needs of the building exactly. On top of that there was a big issue on the coax side. With an SFH ONT, there was a single home’s worth of TVs hanging off of the coax port. So, there might be a few hundred feet and 1 – 5 TVs hanging off the port. For an MDU, those numbers were a LOT harder to get a handle on. In some cases the coax signal was too high and in others too low. The VDSL(2) ports were also hard to get right as the number of MODEMs available was low. In the end, Verizon would bite the bullet and run fiber to each apartment and give them a SFH ONT.

So, what is the lesson here? Really, Tellabs had almost no impact on the outcome. These problems were either inside Verizon or became a Rubik’s cube of challenges. That is the problem with the big deployments. Where Verizon could provide 100% clarity things went fast. Where they couldn’t they ground to a halt. One off issues are very hard to deal with in bulk deployments. Think about that every time you want to scale a business and a customer wants a “special”.

Jim Sackman
FocalPoint Business Coaching
http://www.jimsackman.focalpointcoaching.com/
We Focus On Your Business – Time, Team, Money, Exit
Business Coaching, Sales Training, Web Marketing, Behavioral Assessments, Financial Analysis
Lunch and Learn

Tellabs FiOS: Focus

I wrote months ago at this about the focus that AFC had and how this focus created a market success in the small carriers. Now here we were doing a very large rollout at a Tier 1 carrier. This created an interesting set of challenges.

One of the things that was a huge gain in the IOCs was the flexibility of the UMC. This feature allowed the customer to configure the installation to what they needed. This was a real problem for FiOS. The solution was to create OLTs in standard configurations. We ended up building 2 configurations: A was a TR-08 configuration and B was a GR-303 configuration. Other than that there was no difference between the OLTs. TR-08 and GR-303 are different voice interfaces and depended on what was available on the voice switch in the Central Office.

So, we ended up with a 6 chassis configuration. 1 Chassis each for Common Control, Voice Interface, and Spare (intended later for T-1 type services). 3 Chassis were used to hold a total of 50 PON interfaces. The PON chassis eventually held the connections to the Data Networks but in the beginning their was only one connection per OLT (and it was an OC-3c 155Mb/s interface). Harmonic gear was placed in the rack for Video Transmission as well.

Now one of the challenges was something most people would consider simple: Software Upgrades. The UMC started life as a Digital Loop Carrier (DLC). The DLC specification (TR-57) were originally written in the days of the SLC-96. In those days, products were not software upgradeable. In fact, there was no customer software upgrades until we reached Release 2.1. Given that the entire upgrade process was arcane and at best touch and go. This became a huge issue with Verizon.

This process became a point at which the FiOS product separated from the main DLC product. The first real upgrades were a 3 night process to operate in the maintenance window that was available. Given that we eventually ended up with 3,500 OLTs we (Tellabs and Verizon) concluded that if we didn’t do better that upgrades would be going on continuously. Even with this process we could only do several in a night.

Over a 2 year process, this timing came down to being able to be done within a single maintenance window with lots of time to spare. And all of this was all about focus. We now had 2 distinct products. The DLC and the FiOS BPON. They had significant internal differences. They shared a huge amount of a technology base. But this is one of the things that made FiOS work in volume. Tellabs forced the former AFC to build a product specific to the market. Given the scale of deployment, this made sense. Now the group had enough business that we could do both.

Next up, I want to talk about something on the ONT front. Next week we will talk about the UMC Ethernet Interface which has a lot of angle to it.

Jim Sackman
FocalPoint Business Coaching
http://www.jimsackman.focalpointcoaching.com/
We Focus On Your Business – Time, Team, Money, Exit
Business Coaching, Sales Training, Web Marketing, Behavioral Assessments, Financial Analysis

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Net Neutrality Friday

So once again, I get to talk about Net Neutrality. Next week, I will probably rename this day to something a bit broader. But let’s stick on this topic today.

I want to talk first about what the ISPs want and why they want it. Since this is about money, I have to go back to how people got paid in the telephone network. When you made a long distance phone call, you paid your local phone company. That phone company paid the long distance carrier and the terminating local company their share of the call revenue.

In the days of the Internet, all of this is done on an aggregate basis at best. You pay your ISP for service. The content provider pays their ISP for service. Both ISPs pay one or more backbone providers for peering. What we don’t have is a payment system between the two end ISPs.

Secondly, phone service came with two kinds of charges. First, there was the fee to have a phone. Second, there was a usage fee. This usage fee was waved if a call was made locally. Local calls were free because no significant resource was used to complete the call. From an Internet perspective, we received unlimited service based on the clock rate of the data that we receive.  Resources used, distance, none of that mattered to how much we were billed.

These two differences in the money exchange have caused us all kinds of issues. The first is a focus on Access Networks (the connection between a subscriber and the network) and speed for Internet Services. To increase revenues, Carriers wanted to sell more higher rate services. However, the Metro and Aggregation networks are “free” to use (the bits that connect regional networks). This leads to the dichotomy that a carrier wants you to buy a super fast pipe, and then never use it. Seems like the old days when I would go to IT conferences and the topics would be “How to keep those nasty users off your wonderful networks”.  One other distinction between the phone and Internet was that most phone calls were local, most Internet sessions are remote.

In the days of e-mail and static content, that is what the carriers got with the Internet. The connections were used only when people were at their computer. The data that they loaded was generally small and sporadic. People bought faster networks so that their load times were faster and that connectivity was instant.  The pressure on the Metro and Aggregation networks was low.  Even those most traffic flowed across them (unlike with phone service), idle time was so high these networks had plenty of bandwidth.

Fast forward to the days of the streaming services. And by that I really mean streaming video services. In general, audio is not enough bandwidth to worry about (it just adds a bit more to the problem). These services run a “lot” of data over a long period of time from machine to machine. The user will view it and bandwidth is used at a much higher rate. On top of that the idle times between content flowing go away. This is even true for other services. For example, I just had a Skype notification pop up. That is not a lot of data, but add it all up and it adds to the problem.

So, the ISPs want to get back into the business of charging us for usage. They have started this with bandwidth caps. But there is a second element here and that is their view of the people making money from their network. I always struggle with that. If I go back to the phone network analogy, it is like they are trying to charge us for the type of conversations we are having. I have little sympathy for that.

Anyway, Monday back to the Tellabs story. Next week, a bit about the breaking point of this in the ISP mind: Netflix. Have a great weekend!

Jim Sackman
FocalPoint Business Coaching
http://www.jimsackman.focalpointcoaching.com/
We Focus On Your Business – Time, Team, Money, Exit
Business Coaching, Sales Training, Web Marketing, Behavioral Assessments, Financial Analysis
Lunch and Learn Tickets

 

Sonoma County News and Notes

Want to start off with a gentle reminder to think about coming to my Time Management Workshop. Tickets are limited and I will be providing lunch from Chef Chris. This one hour workshop can help you get time back every day. I am expecting to do more of these and if you have a topic that you want at one of these in the future let me know.

I want to talk a bit about our weather. We are in the middle of a bad drought. I am sure we will have impacts from this on our home lives. But as a Business Coach, I want to talk about the potential economic impact on Sonoma County and the North Bay. I saw an article recently in the North Bay Business Journal that Wine has a $13B impact on the Sonoma County Economy. There is another article that pegs the impact on Napa County as the same. These are huge numbers and there are thousands of jobs that are connected to the Wine Business.

I have talked a bit about a monoculture economy. We live in what is essentially a cash crop export economy. On top of that our tourism business is dependent on the Wineries.

There is nothing we can do to impact what can happen this year except save water as much that we can. That is about all we can do. In the long term, we need to help provide more diversity in our economy. We have had some success in the Food Manufacturing Industry, Breweries, and Distilleries. Unfortunately, all of these industries use a lot of water. We need to start looking at businesses are different and are environmentally sustainable in our locality.

The question is where do we take action as a group like this? Maybe the Sonoma County EDB. But each of us needs to think about our impact here and what we might be able to do about this. I am not trying to denigrate those things that we do well, but having a broader economy will serve us all.

I have posted about 2 issues in our local economy. I don’t think we are in trouble but I do think we have a note of caution. If I add to it that our local telecom firms are strugggling a bit. Other local firms are doing very well and I am still optimistic about what we will end up with this year!

I want to end this discussion with a reminder of my non-coaching services.  I put these into four categories.  First, are Behavioral Assessments based on DISC.  We offer a range of assessments from personal to Sales Skills to 360s to Career Skills.  These can be very helpful in improving your communications with others.  Second, I offer Sales Training.  This can be done one or one or in a workshop (1/2 day or full day).  If you want to exceed your quota, just let me know.  Third, I offer a range of Financial Services from Business Valuation, Benchmarking, Expense Reduction to Business Planning.  if you are in need just let me know.  Fourth and finally, I offer Web Marketing from Website Development to SEO to Social Media.  Let me know if you need an Online 360 appraisal.

Jim Sackman
FocalPoint Business Coaching
http://www.jimsackman.focalpointcoaching.com/
We Focus On Your Business – Time, Team, Money, Exit
Business Coaching, Sales Training, Web Marketing, Behavioral Assessments, Financial Analysis