Alde’s Stuff

Full Disclosure: I am a former employee of Wayport and own Wayport stock.

Seems like AT&T finally was able to convince the board of directors to boot Dave Vucina by buying the company out.

I’m pretty sure this was probably attempt number 3+ to buy the company.

It’ll be interesting to see what AT&T does with Wayport’s technologies and patents. I’m pretty sure that Logan International Airport and any municipal Wi-Fi deployment is in violation of at least one, if not two of Wayport’s patents.

After spending 20 minutes trying to wade through the compartmentalized and siloed nature that is Verizon billing, I eventually talked to a Mr. Mukerjee (guessing he was in Mumbai) to dispute the erroneous charges on my bill. Then I talked to a Mrs Smith (the indignant agent would not give me her first name) to ensure that my account was canceled. This was on the 18th of August. Now I get the following voicemail in my inbox:

“This is Verizon with an urgent message regarding a letter that was sent to you recently and the potential interruption of internet access on your account. Think for your internet access can be as easy as using your charge card. Verizon offers convenient self-serve payment options including the ability to pay your bill using the recurring charge card payment method. To take advantage of this payment options, visit us on the web at www.verizon.net/myaccount or call us online 1-877-432-9409. If payment is not received. Your verizon online service maybe suspended and any outstanding debt will be referred for collection. Verizon thanks you for your prompt attention. Goodbye.”

So, I’m wondering why an automated call would come to me on the 27th of August, days after I canceled my account and was told my Mr Mukerjee that my account balance was $0.

I call that number; it’s a payment service, that charges you, get this, a $3.50 convenience fee. Whose convenience? I why do I need to pay to save you the time and processing of a check? For a bill I’ve been told I owe nothing. See, the email that Verizon Sent to me:

Thank you for allowing us to serve as your Internet service provider. We received your cancellation order effective 2008-08-20 00:00:00.0. We’re sorry to see you go and hope you reconsider. If you change your mind and would like to re-start your Verizon High Speed Internet service, simply call 1-800-567-6789.
…
Sincerely,

Verizon Online
Customer Care Team

Then I call into Verizon’s Payment Information and Payment arrangements line: 800-281-8584. Since I had a dry loop DSL, this completely FLUMMOXES their Voice Actuated IVR system, so much so I eventually just get an “Ok” from it, and a transfer…. To Residential Voice Line collections. Hey! Collections department… No, Lisa doesn’t want to talk to me, so she transfers me over to DSL collections… Where Monica Miller tells me, oh, Dry Loop DSL is another department… To which I get a “Please enter your 10 digit account number…” um, my account number is 13 numbers. I try the first 10, no go. I enter the last 10, no go. Eventually I get the “We can’t help you, please call again.”

So much for having the Network by your side.

Verizon, your customer service is horrible. I’d dare say it’s more horrible than my company’s, and JD Power doesn’t like us at all.

Read over at VoIP Watch a blurb on a company called Yoomba that wants to make your email address your phone number.

No idea if something like this might float, but you’re going to have to get it past Verizon first. They’re suing Vonage over patent infringement, and two of the patents Vonage is allegedly infringing on is patent Number 6104711: Enhanced Internet Domain Name Server, and patent Number 6282574: Method, Server and Telecommuncations System for Name Translation on a Conditional Basis and/or to a Telephone Number.

These two patents’ claims Verizon suggests that if any server anywhere ever did a lookup that used anything other than a telephone number to complete the call was covered by this patent. So, in using a person’s Email address, IM name, etc, would fall under these two patents. The main thing is not what the patents claim, but what the Judge said the patents claimed; there is a difference.

Prior to a Patent lawsuit, there is a Markman hearing in which both the plaintiffs and the defendants attempt to convince the Judge (no jury at this time - Supreme Court ruled only the Judge determines what the patent claims are) as to the scope of the claim. The plaintiff argues for the widest of all interpretations, the defendant argues for the narrowest. Normally these hearings go on for days; however, Verizon and Vonage had less than an hour total to argue their claims. And the Judge found for Verizon on each and every claim, which is quite unprecedented.

During a conference call on Thursday, Sharon O’Leary, Vonage’s chief legal officer, said that U.S. District Judge Claude Hilton had “artificially expanded the coverage” of the patents during this hearing. She claimed that both parties were very limited in the information they could supply to the judge and that the hearing, which typically takes days, was decided in little over an hour.

So this would put Yoomba on slippery footing if they ever tried to use someone’s email address to compete a call on the PSTN network, they’re going to have to license that Intellectual Property from Verizon… Unless Vonage is successful in their appeal of the patent suit and then successful in having those patents overturned.

Because, if it’s just “send an email to chat”, and PC to PC only, well, that’s Skype, or GoogleTalk, etc, and, well, passe.

Ok, so most people have never heard of Wayport, and that’s understandable. When you’re the “Leading provider of highspeed wired and wireless internet access to the business traveler and McDonalds,” not many people will have seen the 0 TV ads or the very few radio commercials run.

Quietly, Wayport endured the Dot-Com bubble, and is generating not just EBITDA positive cash flow, but actual real profit.

You’re thinking, “Ok, why would almighty god of Technology Google want with a network provider to hotels and McDonalds?” It’s really one word… Just one word: Patents.

“Huh?”

Using Google’s own patent search, searching for Wayport, a list of obtuse patents is displayed.

The first patent that is key is Patent# 6326918, which lays down the groundwork for Geographic-based advertising in a wireless environment, which Google and San Francisco seem to have talked about before.

But it doesn’t end there. Throw in the other key patent, 6732176, which in essence patents the “Vendor Neutral” municipal WiFi environment that Earthlink is trying to do with Vonage and Google, and basically any Muni-Fi network in which the Muni is not the only ISP on the network.

And should the Muni try to sell WiFi access to Hotels with interactive ads, you can bank on Patent# 6604087 being leveraged to provide hotel-based ads.

Other than the patents, Wayport is the US’s largest WiFi hotspot provider. There’s already over 6,000 McDonald’s with Wayport WiFi access. Even if T-Mobile had every Starbucks wired, that’s still less than 5200 in the US.

So, there’s already a build WiFi infrastructure, intellectual property that basically covers everything Google wants to do in the WiFi market, and the know how of running a profitable WiFi venture. I’m not sure it’s a matter of if, but one of when?

(Disclosure: The Author owns shares of Wayport.)

I was reading an article over at Ars Technica about AT&T and their issue getting Fiber and Television service to customers.
See, AT&T wasn’t going to spend a lot of money on their broadband. They never have. What they intended to do to compete with Verizon’s FIOS was to use the existing fiber they had planned to put out to their neighborhoods and then leverage the existing copper to the house and use VDSL instead to achieve fast speeds. This is why it’s taken them forever to finally roll this out. It wasn’t until Feb 2006 that VDSL as we know it was standardized. Previous to that it was an Infineon (Israeli company) based chipset that Broadcom also licensed. In essence it was 10Base-S, but because the IEEE 10Base Committee was disbanded in 1997, they would not re-seat to approve a new technology. ADSL hardware providers used this against Infineon to sell against them, claiming that why should someone use a non-certified technology. The true benefit of 10Base-S was that it provided 15mbps of symmetric throughput at short (less than 3000 feet) loop lengths. Perfect for the Hotel Market. The other benefit of 10BaseS was that it had built in CPE device feedback to the head end; it could tell if there was remote link, what speed that link was at, and a true remote report of RSSI and interference. In that sense, just like Betamax was to VHS, 10Base-S was a far superior technology than ADSL.

Today’s VDSL uses tried and true DMT encoding on the line, rather than QAM. Telco’s are much more friendly to DMT. It does lose the ability to do real remote troubleshooting, I don’t think that Ikanos had put forward in-line CPE reporting. VDSL (or VDSL2) has been tested to do over 100mbps Symmetrical and even 200mbps Symmetrical at short loop lengths. It’s not like having a real Multi-Mode fiber terminate at your house, but it allows for AT&T to save money and time in deployment.

But yet again, the Internet’s Village Idiot, Ed Whitaker, wants to hijack the process that unfortunately every other Telco has to go thru. People here in New Jersey bemoan the fact that they don’t have FIOS yet in their area. What they don’t know is the same reason their taxes are so high is the problem with FIOS. New Jersey requires the telcos (and before them, the cable companies) to negotiate with every township, rather than allow them to negotiate at a much higher (county or region) level. New Jersey has over 560 seperate townships. (A reason taxes are so high is that with 560+ townships, there is an incredible amount of redundancy of services; seperate Police/Fire/Administration for almost each and every township = lots of redundant government workers).

I can understand AT&T’s frustration, but welcome to the game Ed, the cable companies have had to do this before you, and I don’t think it’s fair to allow you to jump to the head of the line.

The second post in the series about WiFi Free Lunches, this one about Airports.

I’ve done site surveys and have installed airports in the past. It’s a bigger mess than the hotels.

The first problem is that all airports tend to be run by the government of some sort. It’s usually the city that runs them, but some are county affairs, and some even run by the state. I’m unsure how Airports outside the United States are run, they may even be controlled by the Country.

Why is this a problem? The people that run Airports do so as Feudal Lords. They are the lord of the keep, and the passengers are their vassals. No, I’m not kidding. When I’m done with my current job, I’d love to go run the network infrastructure at one of these large airports. The side benefits are astounding, and the amount of money I’d have direct control over boggles the mind.

These Airport managers believe that they’re doing you a favour by allowing you to sell something to their passengers. For example, an airport that was insanely close to a hotspot of technology didn’t have WiFi for the longest time (up until 2004 if I recall correctly). I was there for the site survey and contractor bidding (we had won the contract to provide WiFi only after we said no the first time, and it was awarded to someone who went out of business after being awarded it). We walked around the entirety of the airport with an AP and antenna on a pole (This was pre-911). We came up with a final number to bill the airport. It was something like 340k or so. That’s running a lot of cable, dealing with union contractors and very little profit built in.

The airport’s response: You pay for the installation and hardware (all 340k), you pay us $2k a month to provide WiFi to the people in the airport, you provide us with a revenue share of each use, and any contract that involves roaming or a third party has to be viewed and approved by the airport. Oh, there’s no free advertising either; you need to talk to our advertising branch of the airport to negotiate paying them to advertise. (Those fees would have been 3 times the amount of the installation).

That’s why you pay for access in an airport.

Airports like Las Vegas are few and far in between.

Every time I read something about some company “winning” an airport bid, I laugh. Unless the airport is a small regional one (Like Atlantic City, or Richmond Va), the company that “won” basically had to buy the business. Ask Logan International (Boston). I did a site survey and a AP plan for there. They were truly ahead of their time because what they wanted was to be THE internet provider for their site, and then resell management of that bandwidth to it’s tenants. But the FCC has stated that they can’t stop anyone from putting up their own WiFi APs if they want (Tmobile and American Airlines).

All the big Airports: O’hare, Atlanta, San Francisco, JFK, Newark, Denver, Houston, Dallas, Dulles. None of them are free. It won’t be free there, no matter what Jim Thompson wishes. It’s much the difference between American/Continental/Delta and Jet Blue/Southwest. As long as the business model requires WiFi vendors to pay outrageous fortunes to have presence in an Airport, expect to pay for WiFi. If the Airport can make a buck at doing it, expect them to make that buck and charge 2 more.

Next I’ll discuss Muni-WiFi and why it’s so overhyped and is so underperforming.

Stumbled across a blog post in which the author asked:

Why isn’t airport and hotel Internet access a standard free feature?

His conclusion:

The Internet is a series of tubes and is here to stay - therefore it should be looked at in the same light as television service since for many travelers Internet access is a necessity.

Seriously. He blames that people are stupid, like Sen. Ted Stevens, and thats why it’s not free.

I also hit Andy Abramson’s blog where he pines about hotspot use and that:

1. Speeds being horrible

2. Latency being a problem

3. NAT Traversal being an issue due to the way access points and routers are networked.

Now, I worked for a company that sold internet access in Hotels, Airports and Retail locations. Odd are good that if you’ve ever used a WiFi hotspot, you used one that ran across my network. So having been on the inside, I’ve got some news for both Andy and Frank: Bandwidth isn’t free. Or more vaguely: There Ain’t No Such Thing As A Free Lunch.

Now, this part is gonna get really technical, so if you don’t want an insiders view of the Hotel WiFi industry, move along…

Large hotels may have an IT staff. These people aren’t much IT as Remote Hands; they call corporate and do what corporate tells them to. Smaller hotels may have an IT person. Usually this person is the same person that maintains the Plumbing, Air Conditioning and Electric, i.e. the Hotel Engineer.

So therefore most hotels can’t afford to do the internet themselves, so they contract with someone like iBahn, GuestTek, Wayport, or whatever numerous other providers there are out there. Depending on how much the hotel wants to spend, will dictate what price is passed on to the consumer.

Average hotel rates for wired and wireless in an entire hotel are $50 to $250 per room installed. That involves the wired rooms using either existing wiring (Cat5 is EXTREMELY rare in a hotel. CAT3 is very rare. Usually it’s unrated twisted pair) or pulling new cabling. Even if you didn’t do wired, you still have to run wire or come up with some solution (ADSL/VDSL is $1100 for a head end and $20-50 per brick). So that 103 room Holiday Inn Express with Wired with Wireless overlay would be about 18k for the total install. Quite less for Wireless, perhaps 6-10k all installed.

The underlying problem here is that hoteliers want the contractors to pay that 6-10k. And then they’ll want the contractor to pay the hotel a monthly revenue share for the luxury of providing their users internet access. (Don’t laugh, this happened up until 2005). That’s the mindset you’re dealing with here.

The typical hotel contracts go something like this: Hotel pays for all capex and owns the hardware outright and the contractor manages it for them: Hotel makes the most money of the revenue share. Or, Contractor pays for all the capex: Hotel makes the least amount of money from the revenue share. Or Hotel wants to give it away: Hotel pays a fixed rate per room per night.

So why do hotels make you pay for access? They like the unlimited upside of the revenue share model. Plus, they don’t have to raise their rates in comparison to their competitors to cover the capex/monthly fees.

I will also remind you at this point that DSL has no service level agreement. For example: AT&T has a 48 hour ticket pick up window. That means their DSL technicians have 48 HOURS after you enter in your issue to just PICK UP the ticket. And there is no guarantee of time to repair. Therefore real hotels use T1s and Leased Line circuits with SLAs. And depending on where the hotel is, you could have a $300 a month T1 to a $15,000 a month T1 (Just ask any hotel on the beautiful islands of the Bahamas how much a T1 costs). Average is somewhere near $700. A Month. Before anyone’s bought anything.

So, if a hotel is paying, oh $700 for a T1, and paid $18,000 for all the hardware, and have a revenue share model in which they recoup $6 of that $10 in fees, it will take 3000 uses to recoup the hardware costs total, and 117 uses to pay for the T1 per month. So, if that’s a 3 year contract (industry standard), that’s only 190 uses a month over 36 months to break even. Which isn’t too tough for most hotels. And as the contractor, you make $760 per month on the break even hotel use.

This, of course, is fine and dandy, until the moment someone picks up a phone to call for help. This is MAIN reason hotels contract the service out. Take a hotel chain like Marriott. With hotels of 500+ rooms, if you had a meager (and I mean REALLY SMALL) take rate of 10%, with an average heads on beds rate of 50%, you’re talking 50 users per night. Out of those, 10% will call for help, so you can expect 5 calls from that hotel per night. These cost the contractor between $5 (if they farm the callcenter out to India), or $20 (America) per call (based upon some concocted callcenter rate of $/hr for the agent, plus opportunity cost, etc). So, as the contractor, you need to clear that amount to generate profit (in this example, $100). So, with that 50 uses, if you get $4, that nets you $100 in profit per day if you keep all your calls in the states.

But should the hotel give internet access away, the contractor would instead charge a flat rate fee, plus per call charge. Now the hotel is losing money, not making it. It’s gone from being a Revenue Center to a Cost Center. You can derive no new profit from having WiFi. Oh, and with free WiFi, take rates tend to skyrocket to 70%. So, 350 users instead of 50. And if 10% have problems, that’s 35 calls instead of 5. Is this starting to make sense? And if I’m giving it away, you can bet the contractor is charging per call and a base MRC. Your downside is infinite, your upside is nil.

I’d short serve the industry here too if I didn’t mention the Legal aspect of being an Internet Service Provider (Because if you’re a hotel and you provide Internet Access, You’re now an ISP). When Gill Sperlin of Titan Media sends you a DMCA takedown notice for Woodsman Gay Male Porn movie sharing. Who is sharing, and how do you stop them? Or you receive an FBI Subpoena for one of your users accused of child pornography? Or Credit Card Fraud?

I’ve stayed at hotels where internet access is free. And they all suffered from the same issues that Andy stated. At night, when the hotel filled up, I couldn’t even listen to 96kbps Shoutcast streams. I’ve been on free WiFi that my signal strength was -85dbm, just barely good enough to maintain a 1meg signal as long as someone didn’t walk down the hallway. I’ve gone to a Panera bread store, but couldn’t get my email because the Horde server I was connected to was blacklisted because it had the word “chips” in the domain name, and therefore was banned for being a gambling site.

In summary, Hotel internet access is not free for 3 main reasons:

1. Hoteliers are the third cheapest bastards in the world (after Airports and Internet Leechers)
2. Bandwidth is not free (even if the government is paying for your city to have a mesh wireless network hooked up to the internet, some taxpayers somewhere are paying for your access)
3. Network hardware isn’t free. Silicon and gold don’t just fall onto PCBs and get magically soldered together. Copper’s natural state is not to string itself into 4 pairs of small gauge wire.
4. Legal compliance costs for law enforcement inquiries and copyright infringement aren’t cheap either.

Hrm, this is rather long. I’ll post about Airports at a later date.

Added content in response to Andy’s comment:

Ah, yea, I seemed to kinda dodge where I was going with your point.

Starwood… Ah that one was great. So they go and put out a bid to all the typical providers, and then the IT director decides he’s going to do it himself with Cisco’s help. 12 months later, with the wonderfulness of Cisco BBSM software (which they bought back from CAIS/Ardent when CAIS couldn’t pay their bills anymore and Cisco was caught short having given them millions of dollars in gear), there were 7 installed Starwoods. 12 months to deply 7 hotels. Needless to say that solution got punted and they went back to the standard group of providers.

What you also have to understand is how branding in a hotel environment works. Most hotels out there with a brand on them are not owned or managed by the company whose brand they fly. A hotel gets built but an independant management company, and all they do is license the name for a fee. This means they buy all their linen, towels, soaps, literature, etc, from that brand. The entire running and control of that hotel is independant (to some degree) from the brand. Just because it’s got a Marriott logo on the outside doesn’t mean that it’s owned by Marriott.

So, in the hotel space, you’ve got GuestTek as the #1 provider if you rate by the number of rooms installed (Oh, did you know that the #1 provider in the space just returned to positive EBITDA on $34 million in revenue? Small Small Small companies.) Somewhere up there too you have Wayport, iBahn (aka STSN), Lodgenet, and other smaller or even vendor provided (companies like SMC and the like with a stand alone firewall).

I know that Wayport and iBahn typically install T1’s to a property. Lodgenet and others typically install DSL (Yes, Lodgenet prefers to deliver the hotel DVD’s with the movie data rather than transfer the movies over the internet). With the price of point to point T1’s coming down because of the glut of fiber after the dot-com demise, it means that these T1’s are typically a lot less oversubscribed than DSL.

Having been in the ISP business now for 12 years, I’ve seen all sorts of customer access; from dialup to X.25, OC48s to the first GigE product sold at UUNET, oversubscription is the key to the quality of service. Consider your standard Tier-1 Provider (Level3, Verizon Business, AT&T, Qwest, etc). These companies tend to have multiple OC192 backbone networks with OC48 peering handoffs. Even if you did have a 10 to 1 T1 oversubscription rate in a city, you’d hardly notice.

Now, go further down the food chain to your DSL providers, like a Verizon, Megapath, Qwest, Bellsouth, Covad, etc. Here you probably see 100 to 1 oversubscription.

For example, if you buy wholesale DSL from Verizon, you typically bring to them an ATM circuit (DS3, OC3, OC12), and then have to pay per megabit of traffic into each LATA that Verizon serves. So that’s say 100 or so LATAs onto a single or multiple circuits. So if you’re on someone’s DSL line (or even Cable internet, you’d be surprised at the number of Hotels that do a bundle deal with Time Warner & Comcast), you’re not only sharing bandwidth with the people in your hotel, you’re also sharing the LATA’s bandwidth with all the other locations in that LATA.

Oh I forgot about loss of revenue for the hotels. Hotels are really upset with the loss of telephone revenue due to the proliferation of Cell Phones in the 90’s. They construct their buildings to inhibit your cellular coverage. No, it’s not that your cellular service sucks so bad you can only get it right up against the window, it’s meant to drive you to use the in-house PBX. Airports got over this by contracting to someone to provide all the GSM/CDMA access in the Airport, and then get a cut of each call being made. Hotels haven’t yet figured this out.

Since you can easily tell what is SIP and then what RTP is keyed off the SIP interaction, companies like Packeteer, Cisco and Juniper all have easy identification of VOIP streams, and then you either partition that bandwidth (like you can in a Packetshaper), or put the QOS all the way down to “Best Effort”.

And lastly, I forgot what the typical user does when they get into the hotel: Download porn. They fire up Kazaa, Morpheus, Gnutella, Bittorrent, you name it.

That’s the recipe for bad VOIP calls. Clogged pipes because of your fellow traveler, because it competes with the hotel’s phone revenue, because cheapest wins and cheap is oversubscribed DSL, and undermaintained or poorly planned installs get internet access at hotels to where you’d rather just stay home.

I’ve had bitch fests about the 9th Circuit Court (the Federal court that serves California, which is full of liberal-assigned judges), and their inherent stupidity and anti-sanity rulings, but on most things internet related, they tend to be on point.

Today’s ruling, which sided with internet web sites/forums/bulletin boards in that these sites are not liable for libellous postings by third parties, is quite a win for freedom of speech and the right to express oneself. From the Fine Article:

Unless Congress revises the existing law, people who claim they were defamed in an Internet posting can only seek damages from the original source of the statement, the court ruled.

What this does is allow web sites / bulletin boards / web forums / newsgroups to provide these services without having to police the responses. If the plaintiffs had won, it’d be a lead-pipe lock that free websites, BB/Forums would dry up, or would become such draconian censors that there’d be a stifling of just about all freedom of expression. Not everyone wants to set up their own blog, some people are just happy in reading and participating in a conversation, not necessarily starting it or hosting it.

And with the Dem’s in congress, we’ll not get a anti-freedom bill in congress either. Hooray!