Wireless Cowboys

Stories from the Wireless Broadband Frontier

Stories from the Wireless Broadband Frontier.
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Starving the Beast

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The best way to deal with bad behavior is to stop paying the players who are either not delivering what you want or are treating you poorly and either support the ones who are doing a better job or start your own.

My own personal example is the way that the independent ISPs were treated by the phone/cable companies.   I was front and center at that bloodbath, watching my DSL margins and customers taken away when the telcos decided to wipe out competition in DSL.    The independent providers were forced into little niches and the bigger ones consolidated or were wiped out when they couldn’t compete.   All the “regulation” in the world was not enough to save the CLECs and independent ISPs, and more regulation will have the same result – it won’t help.    Net Neutrality advocacy is a crybaby tactic – we want our open Internet WAAAHHH!!! – and expecting government regulation to resolve the problem is a delusion shared by many smart and otherwise thoughtful people who think that government has the power to make a difference on this subject.

The big players are better at gaming the system, so the best way to deal with it is to play a different game.    The way to kill the beast is to starve the beast.   Take the money out of the system.   Instead of whining about how they treat you, punch them right in the face!

When I started my WISP in 2004, I made a conscious effort to completely avoid any long term contracts or dependencies on the telcos.   Even when it meant building 120 miles worth of microwave backhaul to break out of a telco “hostage situation”, or watching a customer base of 800 in one area dwindle down to 100 over 18 months.   Putting in the extra work to build my own infrastructure and keep revenues in house limited my gross revenue potential but meant that my margins were higher and that I was no longer dependent on companies that wanted to see me fail.   Within 12 months, I was making more net revenue from 100 customers on my own fixed wireless infrastructure than I made with 800 customers on dialup and DSL over telco copper.

So lets do a little thought exercise.   There are about 3 million WISP customers in the US.  Average customer revenue per month is about $50.    That is $150 million dollars a month taken out of the pockets of the telcos/cablecos.    That is $1.8 billion a year.   WISPA coordinated lobbying efforts in 2012 took $55 million in CAF funding out of the pockets of CenturyLink alone.   Now CenturyLink is targeting WISPs not because we are taking their customers (been doing that for years) but because their government funding is at risk.

I relish every opportunity I get to take money away from the telcos after what they did to me and so many of my colleagues.  Helping create a trade association and being part of an industry that is taking BILLIONS of dollars away from the telcos makes me very proud.

A Message from the Past

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While Googling something else, I came across this message that I sent out to our nascent WISPA list right after my father passed away in January of 2004.   I thought it was worth sharing again…

Hi everyone,

I wanted to take a moment to thank you guys for being
supportive on one really tough day.

We have had an overwhelming amount of support over
the last couple of days from our friends and family
and other people in our community.  In addition to being
a well-known businessman, dad spent a lot of time
volunteering at our county fair and being a good friend
to a lot of people.  His passing was the top news story
on the local radio station on Friday, which is a pretty
good indication of the impact he had on our community.

When I was living in a trailer house and driving a
$25 car back in 1997, my dad was one of the very few people
who believed in me and gave me the support I needed to start
my first ISP business.  I might be stuck in a dead-end job or
flipping burgers if it wasn't for the help that he offered
me.  The only thing that he didn't tolerate from a person
was not performing to the best of their ability.  One of
the last things he told me was "do your best and keep
getting after things" and I am going to do all I can to
fulfill his wishes.

Rather than sending flowers or anything like that, I would
ask that you keep alive the spirit of helping others. 
Volunteer some time to a cause that means something to you. 
If you have the ability, give an opportunity to someone who
could use a break.  The rewards that come back to you will
mean much more than the time that you spend.  I think
that the new WISPA efforts are going to pay back big rewards
to all of us and I'm going to volunteer a lot of my time to
that project - you guys can choose whatever works for you.

Best wishes to all of you, and I'll see you again in a couple
of days.

Do your best,

Matt Larsen

WISPs to AT&T Customers – We Got This

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Late last month, in their fourth quarter earnings call, AT&T basically said that they are going to stop expansion of their broadband footprint, especially in rural areas.    From the mouth of Randall L Stephenson, AT&T CEO:

…we have been apprehensive on moving, doing anything on rural access lines because the issue here is, do you have a broadband product for rural America?

We’ve all been trying to find a broadband solution that was economically viable to get out to rural America, and we’re not finding one to be quite candid. The best opportunity we have is LTE.

We are obviously excited about the opportunity to use LTE to get to rural America with the T-Mobile transaction.That having been set aside, now we’re looking at rural America and asking, what’s the broadband solution? We don’t have one right now.

Anyone who knows about the physics of mobile wireless knows that LTE is not going to be the savior in rural areas.   Apparently AT&T has finally figured that out as well.    Combine this with Stephenson’s earlier quote that referred to DSL as being “obsolete” and you can imagine how customers on AT&T’s landline networks with shoddy DSL or no broadband access are feeling right now.

Here is the message to AT&T from the 2000+ WISP operators around the US – “Don’t worry bro, we got this.”   Anytime, anywhere that the incumbent telcos or cable companies refuse to build out or step up their network performance, there will be a WISP there to do it for them.

Thanks for the customers AT&T!   Keep em coming!

 

WISPs vs Telcos

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Random thoughts about the WISP industry on a Friday:

The entire WISP industry is in many ways a giant collaborative project.   Many of the early WISP pioneers did not have any kind of background in RF or wireless communications.   The initial core of pioneers were independent ISPs that were disgusted with how the telcos were ruining the competitive environment and turned to fixed wireless as a possible alternative.   For the first two or three years, there were no real face-to-face meetings as the discussions took place on the old isp-wireless mailling list run by Jupiter Media.   In the spring of 2001, the first WISPCON in Chicago brought many of the mailling list members together in person for the first time and things really started to click.   I came back from that show with a completely different perspective on the WISP business.   Beforehand, I thought that it might be more like CB Radio redux (as unlicensed was often perceived at the time) than a real business, but after hearing from others that were making it work and seeing some of the equipment that was coming out (first glimpses of the Canopy platform and introduction to Mikrotik) I realized that we had a legit chance of surviving and thriving.

After that show, the relationships between the attendees were maintained online with occasional real-world gatherings.    There was constant experimentation by WISPs all over the world with equipment setups, business models and how to deal with competition.   Since very few WISPs were competing with one another, sharing was very open and honest.   We certainly had our share of know-it-alls and charlatans, but they followed Darwin’s path to irrelevance as the industry evolved.   WISPA was created in early 2004 and for several years it was almost entirely virtual.   The board held meetings online and the mailling lists contained the core of the interactions between members as the industry slowly gathered steam.     WISPCON died after five or six shows and didn’t really get replaced until WISPA put on its first trade show in summer 2010.   The trade shows are accelerating the collaboration, as some in-person contact is still extremely valuable when it comes to interacting with people.

A couple of points to throw out with regard to this discussion.

1)   Take a look at the last ten years of telecom and compare it with the last ten years of the WISP business.   Telecom has evolved into the price-gouging, anti-competitive, government pork-fed monster that we all love to hate.   4000-5000 WISPs sprang into existence with little or no government subsidies, delivered broadband to places that didn’t have it and competition to places that needed it and took advantage of technology that is now capable of delivering comparable or better services than the telcos.

2)  Defining characteristics of Telcos and WISPS:
Telcos = closed, anticompetitive, profit driven, dependent on subsidy, use regulation against competition
WISPS = open, competitive, service oriented, profitable without subsidy, work around regulation

3)  Collaboration was done without access to “ultra broadband” research networks or fancy systems – it was done through simple mailling lists and the building of interpersonal relationships.

4)  In-person meetings were critical to the development of the interpersonal relationships.   100gig broadband is no substitute.

Open networks and collaboration are the keys to progress in ICT.   100gig broadband is nearly worthless if it is a closed network.   Collaboration can be done without it.    Money will not fix our country’s broadband problems.

Have a great weekend!

Broadband <> Rural Electrification

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Many USF advocates have made the assertion that universal broadband should be given the same priority and consideration that was given to the universal provision of electric service to all parts of the country.   However, this argument fails when advances in broadband technology are brought into consideration.    Electrical power delivery is dependent on the construction of a massive wired infrastructure to every user location and an expensive support system for that infrastructure.   Traditional landline broadband is similar, as dsl, fiber and cable have substantial plant and plant maintenance requirements.   In a wireline network, facilities must be built out to every potential customer location, even if those customers are not using the service.  This drives up the cost of deployment and maintenance.   A high penetration rate is required for a wireline network to be profitable and costs are fixed at a high rate.

Fixed wireless broadband does not have these same requirements.

When a fixed wireless broadband system is brought online, a landline network is only needed when the aggregate demand of the base station exceeds the capacity of a wireless backbone system.   Once a base station is brought online, everyone within range is able to obtain service and there are no additional plant maintenance costs beyond the installation of the customer premise radio.   With fixed wireless, a base station can be profitable even with a very small number of customers and the total cost of operation goes down with every additional customer added to the base station.   This simple difference in the economics of deployment enables WISPs to survive and prosper without government subsidies while landline operators are dependent on USF to maintain their wireline plants.

In a wireline broadband deployment, fixed expenses are constant throughout the lifetime of the system and these expenses are used as part of the equation for determining USF support.  In many cases, USF funding does not go to the providers that are delivering the best product – it goes to the companies that deliver the most expensive product and do the best job of filling out paperwork.   Until this issue is resolved, USF has the potential to do more harm than good to rural broadband deployment in America.