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Matanuska Telephone Begins IP Switching Transition
16 Jul, 2008
Matanuska Telephone Association (MTA), an Alaska based independent telco, has announced they are beginning their transition to an IP based infrastructure. MTA is transitioning their circuit switched network to the MetaSwitch distributed softswitch platform, which according to a MetaSwitch press release, enables the “delivery of both traditional and IP-based voice services.” MTA serves 40K subscribers in south central Alaska.
The move by MTA is representative of a growing trend among independents in the U.S. The transition to IP networks is well documented for tier 1 carriers like Verizon and AT&T. But that same transition is quite active among the smaller independents as well. Those independents are facing some of the same competitive pressures as the larger carriers, with cable MSOs increasingly offering competitive triple play services in all parts of the country. Independent ILECs also face that pesky trend that just doesn’t seem to go away - wireless substitution. Transitioning to IP based next generation networks is driven not only by efficiency gains and modernization, but also by the promise of revenue generating application development. The hope by all involved is that these new IP powered applications will create both additional value for landlines and additional revenue generating applications to relieve the potential of declining subscriber ARPU. It's real early in this game, so there are a lot of fingers crossed, hoping that this promise will indeed come true. Will it?
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googleGrowing Concern From CLECs About Copper Loop Replacement
11 May, 2007As ILECs continue to migrate to fiber loops, CLECs are growing concerned about what happens to the copper loop which is being replaced. ILECs have no regulatory edict about leasing fiber loops, as they do with copper loops. As copper loops get replaced, ILECs may retire those loops, removing them from CLEC accessibility. CLECs, including XO Communications, are concerned enough to request the Office of Advocacy of the U.S. Small Business Administration to lobby the FCC to open a rulemaking on the issue.
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Should Telephone Service be Free?
12 Oct, 2008
Comcast announced a new promotion last week that offers 12 months of free basic cable service for new customers who also sign up for an additional service. Customers who don’t want an additional service can get Comcast’s basic service of about 20 -30 channels for $10/month. The promotion is tied to the digital TV transition of February 2009 and entices potential customers to avoid the transition “hassle” by getting “free” cable service. “The simple fact is that basic cable is the easiest path through the digital transition and now consumers can get it for free,” said Derek Harrar, General Manager and Senior Vice President, Video Services for Comcast in a company statement. This move is similar to strategies pursued by other video service providers, who are hoping to leverage the digital TV transition for new subscriber additions.
But is this strategy a leading indicator for the future? Should basic core services like basic cable and basic telephone service be offered for free, used as a “carrot” to entice customers to buy “more important” services like broadband? Maybe a very basic phone service, with no LD, access to landline 911, and maybe outgoing service only (to avoid telemarketers) should be a free component of a bundled offering. Such a wireline service may appeal to a customer who previously cut the cord for wireless only, but also needs broadband. There is a growing portion of the population who find the value of traditional wireline phone service elsewhere – either through wireless or broadband/IP services. But, if they could get the security of landline 911, and an extra dial tone in their home as a free value add for subscribing to broadband (or video from a telco’s perspective), maybe a telco’s bundled offering may look more attractive than a comparable cable offering. I realize this idea is not appealing to the hundreds of ILECs who are a part of the current access/settlement system (in fact, it couldn’t work in the context of today’s regulatory structure), but I wonder whether it’s inevitable. In this possible future scenario, the current settlement system adapts to broadband as the underlying service, as opposed to voice.
This scenario cuts both ways. From a cable company’s perspective, a growing portion of the population is turning to the Internet as a source for their video content, and no longer see value in paying for a broad package of video as a part of a traditional subscription pay-TV service. But, if they could receive basic TV (which includes local broadcast affiliates) as a free value add for buying broadband, maybe the cable bundle is more attractive. In a true IP/broadband world, very basic phone and video service is relatively easy to deliver, and has little impact on bandwidth and network performance. Maybe the digital transition is opening the door to a future where free basic services are a regular component of a bundled offering. Thoughts?