Channel Surfing Blog 

By Khali Henderson

It seems in most industries, it gets down to two behemoth competitors. WalMart and Target. Microsoft and Apple. Home Depot and Lowes. Barnes & Noble and Borders.

While it happens over and over, we bristle at the lack of choices even as we patronize these stores. It just doesn’t seem right that there shouldn’t be other options. We applaud the Amazon.coms and the Dells that come in and shake things up – bringing innovation in features, delivery and price.

In telecoms, then, it should not surprise us that consolidation to a few giants is well on its way. Consumers probably can name the likely contenders – AT&T – for the title.

Unlike some other retail entities, these companies built their businesses on rate of return regulation for decades. Competition – bringing innovation in features, delivery and price -- had to be forced by laws and regulations, giving competitors access to those facilities the ratepayers built.

The fight over network sharing has persisted for years and is now coming to a head in the recent spate of forbearance petitions. The FCC is scheduled to issue a decision in July on whether to grant a request by Qwest to no longer be required to provide competitive carriers with just and reasonable wholesale access to its legacy Bell facilities. Qwest has asked the FCC to eliminate wholesale unbundling rules mandated by the 1996 Telecom Act in Denver, Minneapolis, Phoenix and Seattle. The FCC in December 2005 granted a similar request Qwest made for its Omaha, Neb., territory.

Of course, Verizon and AT&T are hoping for a similar relief.

COMPTEL today released a white paper that it says shows how the elimination of reasonable wholesale regulations can curb innovation and competition at the retail level.

Indeed, after Qwest got relief in Omaha, it increased the rates it charges competitors by 30 percent to 178 percent, collapsing the wholesale market there, driving out competitors like McLeodUSA (now PAETEC) that used those wholesale services, thus diminishing retail competition. The Omaha Forbearance experience shows that functioning wholesale markets do not emerge automatically when unbundling obligations are removed.

More than 75 of World Telecom Group's top agents participated in the 6th Annual WTG Tee & Sea event last weekend, May 15-17,  in sunny Malibu, Calif.

The event, which included agents' guests and WTG suppliers, hosted about 150 people in all. This was a smaller group than in year's past by design, according to WTG CEO Vince Bradley. Instead of an open invite, this year's event was an incentive for top performing sales agents as part of its 2008 PartnerPerks program.

Those selling more than $60,000 in new business were given entrance to the event. These included Top Speed Data, Litch Data, Carrier Support Group, WorldOne Communications and Touchstar Software.

Those selling more than $120,000 in new business also received paid travel. These included Alaine Fulton of Safe Haven, Mannie Galon of G2 Solutions and Roger Duncan of Tellerium.

Those agents with more than $300,000 in new business got a full ride. Top honors went to Dale Stewart of CSG and Scott Rockwell of Telco Quote.

PartnerPerks qualifiers David Bang of Litch Data, David Glendenning of CSG and Diane Hoey of WorldOne with WTG CEO Vince Bradley (middle)

The event was revamped in other ways, too. The traditional kick-off open house at WTG headquarters was scrapped for a luncheon at the The Malibu West Beach Club, followed by presentations from the event's premier sponsors (Qwest, Level3, Verizon, XO, Covad and New Edge Networks). The popular “Happy Hour on the Beach” was reprised, but combined with the Premier Provider Expo.

Partners sponsors mingle at WTG’s Happy Hour on the Beach.

The "Tee" part of the WTG Tee & Sea event was held on Friday at the The Malibu Country Club. The shotgun Golf Tournament included more than $5,000 in prizes. Mitch Krayton of Digital Resources shot a double eagle from 150 yards out - a shot that helped this normally average golfer to earn second place in the contest, Bradley said.

Top golf twosome Gary Keswick of CM Group and Matt Winterburn of XO with WTG CEO Vince Bradley (middle)

Top Foursome David Bang of Litch Data, Robert Green & Mike Luck of ICS and Ryan Wortham of ATI with WTG CEO Vince Bradley (middle)

The "Sea" part of the event also was different this year. Instead of a cruise, a Wine Pairing was held at an oceanfront restaurant.

Susan Eakle of PAETEC, Sherrie Hiller of TelePacific, Jessica Lewis of CSG, guest Lynn Durica, Susan Farraj from A+ Conferencing and Jennifer Hayes of Teleconsult enjoy the "sea."

Afterward, everyone regrouped at the 19th hole for Casino games, massage and a raffle.

By Khali Henderson

The Keanes (Jeff and Pete) of the KeaneTel have been inviting me to attend their master agency's annual for the past few years. This year, being that it was in Las Vegas and near my home base in Phoenix, I decided to join in. Now, I know why that call it the Telecom Training Triathlon.

I originally thought it was a cute marketing name for the three-day event, but it turns out to be an endurance test. The day I was attended, classes started at 8:30 and continued through to 5 p.m. with a one-hour lunch break. Then, it picked up again with a reception at 8 p.m. when KeaneTel honored its top sales partners and suppliers.

Jeff Keane admits that it can be a long day, but says it's only half as long on the first and last days of the event. To reward sales partners for their stamina, KeaneTel offered two free years of membership in its sales partner program. Unlike traditional agent programs, KeaneTel sales partners pay a monthly fee to KeaneTel in exhange for 80 percent to 100 percent of commisisons. The two prizes (a $7,200 value each) -- one for an existing partner and one for a prospective partner -- were offered in a drawing. The catch? You had to attend every activity to qualify for the drawing.

By Friday morning, the crowd -- about 30+ agents and as many suppliers -- thinned, eliminating all but eight companies from drawing. (No pain, no gain!) Dwayne King of Network Carrier Resources (NCR) and Paul Pietrusewicz of Maket2Go were the winners.

NCR's Dwayne King

Market2Go's Paul Pietrusewicz

I wasn't eligible for the award, of course, but I did get a workout  -- albeit only the middle part, which I believe corresponds to the  swimming part in a real triathlon. (Well, there was swimming at the MGM Grand in Vegas, but I can't say that I got to go anywhere near the water.) Nevertheless, I and the other students were nearly "drowning" in information by the time that I left.  

During last week's training KeaneTel sales partners heard from 13 suppliers and event sponsors, including ACC Business, AT&T (via master agent Integral Choice), Cavalier, Connex, Covad, DynaLink, Intelliverse, Intercall, New Edge Networks, PAETEC, Qwest, Total Call International/OPEX and XO.  Two of the suppliers -- PAETEC and Intelliverse -- are new to the KeaneTel portfolio this year.

Since I was only there for a day, I got to hear from just a few. Here are some of the highlights:

PAETEC's Alex Prescott

 

 

 

 

 

 

 

 

 

 

PAETEC's Steve Kopp and Alex Prescott promoted the CLEC's expanded footprint following the McLeodUSA merger. They discussed the company's data products and also a unique equipment-for-services offer. Jeff Keane said also touted an aggressive commission strucutre available to the KeaneTel Sales Partners.

Intelliverse's Frank Paterno

 

 

 

 

 

 

 

 

 

 

Frank Paterno of Intelliverse, spoke about selling the company's hosted IP telephony services as well as its new integration with the New Edge Networks MPLS footprint, bypassing the public Internet. New Edge Networks' new channel chief Brett Theiss discussed the company's new MPLS over DSL product.

Joel Allinson of XO (KeaneTel's Carrier of the Year) highlighted the CLEC's IPfolio products and mentioned a new cool IP Flex feature launched a month ago that enables users of its service to click-to-dial any number even when away from their desktop phone. The service calls both the subscriber and the person he/she is calling and connects them. Later this year, XO wil add a feature that allows subscribers to move seamlessly from mobile phone to desktop within a call.

XO's John DiCataldo announced upcoming XO SIP integrations with popular IP PBXs. The latest is with Cisco's UC500. In June, the carrier plans to announce integrations with gear from Nortel, 3Com, ShoreTel and Mitel. In January 2009, integration is planned for systems from Siemens, Aastra, Toshiba and Panasonic, he said.

Qwest's Steve Robinson

 

 

 

 

 

 

 

 

 

 

Qwest's Steve Robinson also talked about its product roadmap for OneFlex SmartConnect. In second quarter, he expects it to support up to 200 seats per location; presently, the limit is 48. He also expects it to support a VPN component in short order.

In addition to its new carriers, KeaneTel also announced the launch of a new Website, www.keanetelsalespartners.com, to house all carrier communications regarding spiff and promotions as well as useful tools like area code maps. Since the site was opened in January, Keane said it's become a popular place for carriers to disseminate information to the KeaneTel sales network.

Keane said this year's training is the most successful to date. There weren't more people, but the ones that attended represented 80 percent to 90 percent of KeaneTel's business. KeaneTel has about 32 sales partners, he said. (KeaneTel had tried the traditional agency route, but found it unproductive and shut it down.)  This year, he said the KeaneTel sales partners are on pace to deliver $22 million in carrier revenue.

I am happy to report that I survived my first Telecom Training Triathlon with only a residual few aches and pains  -- mostly of the brain cramp variety.

By Khali Henderson

It's never fun to be on the receiving end of a postcard from Puerto Vallerta. But, it happened to me -- and probably many of you -- today.

Ted Schuman, president and CEO of PlanetOne, sent one (albeit electronic) from the sandy shores of Mexico. It was belated, but I can't blame him for preferring the picturesque view to corresponding with the working folk.

Puerto Vallarta

Schuman took along a few friends -- the PlanetOne President's Club -- for this holiday.

PlanetOne agents and suppliers in Puerto Vallarta.

The seventh annual incentive trip was held May 15-18 at the Vallarta Palace in Nuevo Vallarta, Mexico, just minutes from downtown Puerto Vallarta.

PlanetOne's top-producing agents and their guests attended the four-day event, which was sponsored by XO, TNCI, ACC, Qwest and PAETEC. Carrier execs also participated in the festivities.

The event began with a welcome reception on Thursday. On Friday, the real fun began. A city tour and shopping excursion was followed by Beach Olympics. Contestants competed in a tug-o-war, egg toss, tequila relay, swimming race and something very messy called the “Flour Basket Fill Up.”

Tug-o-war

Sack race

“We wanted to create a fun and competitive environment where being the most athletic person did not assure you of winning anything, and I believe we accomplished our objective in spades,” said Schuman.

Later on, Wave Runners were provided for the adventurous participants to tackle the three- to six-foot swells. The day wrapped up with dinner served on the beach along with a Mariachi serenade.

On Saturday, guests boarded the Geronimo, a chartered catamaran. Guests snorkeled at the Las Marietas Islands, which Jacques Cousteau called his favorite place in the world to snorkel. From there it was off to a private beach and a catered lunch and some kayaking.

Snorkeling

That evening, PlanetOne held its award ceremony for the President's Club winners in one of the many ocean front restaurants at Vallarta Palace.

Rather than depart on Sunday, some of the guests weren't ready to go home (no kidding) and stayed on for some R&R in Puerto Vallarta.

If you haven't been tortured enough by these snapshots of paradise, you can view the slideshow. You can see the triumphant winners of the egg-toss and the PHONE+ Channel Executive of the Year working hard at holding down a hammock.

Cara Sievers

Just up the road from my neighborhood in Memphis is a thriving telecom expense management company called Asentinel. Recently, I dropped by for a chat with CEO David Perdue to learn more about the company and hear about its newly granted U.S. patent covering core elements of its TEM software, Asentinel 5.0.

The six-year-old company spawned from a sister company in Romania called Asentinel SRL, which still executes all Asentinel product development, while the support and sales functions are based here in Memphis.

Why Memphis? In the beginning, the Romanian Asentinel was doing contract programming work for Global 500 companies, one of which was Memphis-based Union Planters Bank. During one of those engagements, Union Planters asked the programmers to write some software to help them manage their telecom invoices and spend, which at that time was $37 million per year. Perdue said the software saved the bank $500,000 in just the first three or four months of using it.

Seeing what a great product they had on their hands, the principals of Asentinel SRL approached Perdue because of his telecom background to spearhead this TEM software sales company, and Asentinel, as we know it, was born. Jason Fisher, who was president of the sister company, came to Asentinel as chief software architect.

Perdue is especially proud of Asentinel’s recently granted patent. The patent (U.S. Patent No. 7,340,422), entitled, “Systems and Methods for Processing and Managing Telecommunications Invoices,” has 56 claims covering a broad range of TEM functionality, including multivendor invoice importation and dissection.

“We have long highlighted that when we introduced our Asentinel TEM software, we were the first to develop truly innovative solutions to address the challenging task of processing telecom invoices,” said Perdue. “This patent, granted from an application filed in 2003, serves as a testament to this view, and recognizes our industry leadership.”

David C. Perdue serves as CEO at the helm of Asentinel.

Perdue said he hopes it’s the first of many patents to be granted to Asentinel. The company is working on more patent applications and also has filed applications in Canada and Europe. Perdue noted that some Asentinel competitors might have patents on their pieces of the TEM business; but he is not shaken by this – the patent office had to have found that Asentinel’s 56 claims were unique from anything else out there or the patent wouldn’t have been granted.

The Asentinel 5.0 software, sold on a perpetual license or subscription basis, features reporting and business intelligence capabilities, as well a Java-based EDI translator written by Asentinel software engineers. In addition, Asentinel 5.0's optimized code means the software has minimal customer database and hardware requirements. The software uses AJAX (Asynchronous JavaScript and XML) technology to power its business intelligence engine.

 
Laurentiu Herbei, senior software engineer at Asentinel, takes a moment to demonstrate some of the tool’s reporting capabilities.

Asentinel sells both direct and through affiliates. The company has a handful of reseller and consultant partners and is looking for more to help it broaden its reach.

Kelly Teal

XO Holdings isn’t ‘holding’ up so well these days. Yesterday the CLEC reported a first-quarter loss of $42.9 million – more than the $20.6 million in losses a year earlier. Ongoing losses, combined with the hiring of an investment bank, make XO look ripe for one of three actions: going private; getting bought by a rival; or filing bankruptcy.

I say that for three reasons.

First, companies don’t hire investment banks unless they need to change something about their business model. XO contracted Morgan Stanley as its “financial advisor” in February.

Second, XO’s stock prices keep dropping – today they’re at 55 cents; yesterday they hit 60 cents. The company has been trading on the Over The Counter Bulletin Board – a place where stocks pretty much go to die – since 2003 (I earlier had written since last October but I had my facts wrong).

Finally, XO is carrying a high debt load and it doesn’t look like refinancing will happen any time soon in this credit-crunched market. The debt comes due in April and July of next year.

On the whole, I’m surprised Carl Icahn has let matters get this bad at XO. Maybe he’s been too focused on cleaning up Motorola. Meanwhile, XO plans to spend another $22 million on capex in 2008. If XO doesn’t spend that money, it fears “it would be difficult to continue to compete against the ever increasing pressures from the regional Bell operating companies.” That’s from its earnings info yesterday.

I’m curious to know what telecom and XO insiders think of the situation. I hear morale at the company is, understandably, in the dumps. (Update: An insider tells me morale actually is high, so I'm getting conflicting information) E-mail me with your thoughts; if I write an article, I’ll keep your name and company confidential.

Kelly Teal

We now know why Frontline Wireless suddenly closed shop and why the D Block didn’t sell in the FCC’s 700MHz spectrum auction. Turns out, the Public Safety Spectrum Trust (PSST) – the non-profit that holds the D Block licenses but that can’t make any money until there’s a commercial provider operating the bandwidth – attached some pretty incredible conditions to the spectrum.

For starters, the PSST was talking about “negotiable” annual lease payments of $50 million-$55 million. For 10 years. And with no guarantees that public safety or commercial users would ever sign up if Frontline Wireless won the auction, it’s no wonder investors jumped ship.

There were other requirements, too, that made the D Block less and less attractive to equity firms.

The obvious question now is what is the FCC going to do about it? There’s talk of a re-auction of the D Block and something will have to be different the next time around.

But there are better questions the FCC, Congress and the industry should ask themselves. How did this debacle come about? How can it be prevented from recurring? Why are so few companies interested in the D Block? It’s curious to me that a non-profit selected by the FCC also happens to have as its advisor the for-profit company that hoped to serve as the D Block’s MVNO. Frontline Wireless would have been the underlying carrier while Cyren Call – founded by Nextel’s Morgan O’Brien – intended to serve as the reseller whose end users would have been the public safety community.

I know the Inspector General cleared Cyren Call and the PSST of any collusion. But I still am left to wonder why so few entities hold so much power over a critical piece of government – read, the peoples’ – property.