Video Follies in the UK

June 12th, 2009
 

If you want a preview of what battles over net neutrality in the USA may evolve into, you need only look at the UK.  In a Financial Times article, British Telecom (NYSE:BT, news, filings) complains loudly about the demands caused by rising video usage.  As usual, thinkbroadband has good material on the subject.  While the BBC’s iPlayer is the primary ‘culprit’, pretty much all sites specializing in video are now being deemed freeloaders.  BT wants them to pay for the extra costs, assessing some sort of licensing fee to deliver content to its customers.  What a mess that would be. [Read more →]

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By the Numbers: Sprint Wireline Versus Level 3

June 11th, 2009
 

With the new M&A buzz being the possible JV between Level 3 Communications (NYSE:LVLT, news, filings) and Sprint Nextel (NYSE:S, news, filings), there will come a whole lot of articles which spread the rumor but don’t delve into the nitty gritty.  In fact, some will surely compare apples to oranges, and not realize it.  Therefore, I thought it might be useful to take both companies’ operational performance and put them side by side in as close to an apples to apples comparison we can manage.  It cannot be perfect of course, but we can get pretty close just by following the following guidelines: [Read more →]

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Sprint, Level 3 Talking Joint Venture

June 11th, 2009
 

According to the Wall Street Journal, Sprint Nextel (NYSE:S, news, filings) and Level 3 Communications (NYSE:LVLT, news, filings) are in early stage talks about a joint venture.  The WSJ has been rather noisy in the telecom merger area lately, most of the main ‘Qwest is selling its longhaul network’ stories originated there as well.  The Sprint/Level3 talks are supposedly at a very early stage, but Sprint’s idea here is obviously to pull a Clearwire.  They want to take a division they are not willing to keep investing in, and fold it into part ownership of a new company that can and will invest in it.  [Read more →]

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AT&T’s Ideas for the National Broadband Plan

June 10th, 2009
 

Lightwave has a nice article on recent comments by Verizon (NYSE:VZ, news, filings) and AT&T (NYSE:T, news, filings) to the FCC about what should make up our national broadband plan, i.e. how to spend the stimulus and promote broadband penetration.  I recommend a read.  However, it can be hard to read such policy statements without having an allergic response to the extremely high levels of buzzword density.  Therefore, I’m going to offer a bit of, err, translation.  Here the 8 elements AT&T offers as central to the right plan: [Read more →]

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Ed Whitacre at GM

June 10th, 2009
 

Ten years from now, will former Ed Whitacre have a resume that includes the reconstruction of the power and prestige an American icon, and also briefly ran a doomed car company in Detroit?  Or will he be two for two?  Readers of Telecom Ramblings know him as well as any group, so what do you think:

[poll id=”25″]

As a fan of competitive telecom I wish Whitacre hadn’t done [Read more →]

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Equinix and Terremark Both Raise a Bundle of Cash

June 9th, 2009
 

Apparently the thawing in the credit markets has now calved an iceberg or two.  Yesterday, Equinix (NASDAQ:EQIX, news, filings) announced they would sell $250M in convertible debt, and just twenty four hours later have raised that to $325M at 4.75% at a strike price of $84.32.  I wouldn’t call it cheap money, at least not relative to a few years ago, but it isn’t bad.  Equinix will use the cash to expand its footprint to meet demand, but didn’t give any details yet.  Interestingly, they also entered into a capped call arrangement designed to reduce dilution, something vaguely similar to the bond hedge Level 3 had with Merril Lynch.  [Read more →]

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Level 3 Lights Its Way to Warsaw

June 9th, 2009
 

Not content with sending extra personnel and equipment into the wilds of upstate New York and southern Texas, Level 3 Communications (NYSE:LVLT, news, filings) announced today that it is lighting fiber in Poland on a new route From Berlin, to Poznan, and on through to Warsaw.  Level 3 has had a PoP in Warsaw for a couple years now.  But while they lit fiber to Vienna, Bratislava, Budapest, and Prague, the route to Warsaw they continued to serve via wavelengths.  With the new fiber route comes a larger relationship with Polish cable provider Vectra, and it gets them closer to Russia where a whole lot of its IP transit growth has been coming from lately. [Read more →]

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Juniper Introduces a 100GE Interface

June 9th, 2009
 

In the effort to reach 100Gps speeds, the lions share of the media coverage goes to the DWDM systems with companies like Ciena (NASDAQ:CIEN, news, filings) and Infinera (NASDAQ:INFN, news, filings) demonstrating 100G transmissions over a few hundred miles, etc.  However, that’s really only going to be useful if you have something to plug it into on each end.  Therefore, today’s announcement by Juniper Networks (NASDAQ:JNPR, news, filings) is of equivalent importance.  Juniper introduced a 100GE interface to its T1600 router, becoming the first to commercially offer such a product.  [Read more →]

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Qwest: Just Kidding!

June 8th, 2009
 

Apparently, the bids really were too low, because today q publicly announced that it has decided not to sell its longhaul network.  They acknowledged there was an auction going on, but said that they did not get bids sufficiently high to make them want to do a deal.  The price tag of $2-3B that was unofficially placed on the asset was just not realistic at the current time.  Is it really worth that much to Qwest and not to Verizon or Level 3 or whomever?  Who knows…  All we can say is that this is a really bad time to sell stuff, and it was always rather odd [Read more →]

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Qwest Longhaul: The Icahn Factor

June 8th, 2009
 

Late last week, the Wall Street Journal reported yet again that bids for Qwest’s longhaul network have been coming in rather light to say the least.  To readers of Telecom Ramblings, that probably came as no surprise given my earlier opinions on the subject.  But what intrigued me about the report was the inclusion of XO Holdings (news, filings) amongst those still interested according to many articles, because on their own that makes no sense at all.  Therefore, I really wonder if there could be something else going on here. [Read more →]

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Is HD Voice the Next Big Thing?

June 8th, 2009
 

Optimum Lightpath, the metro fiber and business services division of Cablevision, began offering HD Voice to its customers last week.  Lately, I have found myself wondering, just what the heck is HD Voice?  Not at a definitional level, that part is easy – HD Voice uses a wider channel and therefore just sounds so much better than a traditional phone call.  I mean, as a phenomenon does HD Voice really have legs? And if so, what kind of legs are they? Lately, VoIP bloggers have been making an increasingly loud roar on the subject, much of which seems to have come out of Jeff Pulver’s recent conference.  Today Andy Abramson gave his endorsement to the idea it can re-invigorate the VoIP segment.    Those are certainly the right names in the VoIP blogging community to have behind you. [Read more →]

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Re-Introducing the Telecom Ramblings Forums

June 6th, 2009
 

Last fall I introduced a Forum on Telecom Ramblings in response to a multi-day outage on another site.  It was hurriedly done and not really up to the task at hand, and quite frankly the readership just wasn’t wide enough yet to support it anyway.  But the dream did not die, and since then I have experimented with various forum software in preparation for another try.  The time has come, and you can find the new forums in the top menu bar under the name ‘Community’.  You will also see the latest posts in the forum alongside the comment form beneath every post, and I may find other places to splice it in. 

The general idea behind my forums is [Read more →]

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Telx Raises a Pile of Cash

June 5th, 2009
 

Colocation and interconnection specialist Telx raised a tidy sum of $43.5M this week.  The new financing is being provided by CIT Communications, Media & Entertainment and RBC Capital Markets and both replaces an existing loan and adds new capital for expansion.  This seems like a further indication that the credit markets continue to thaw.  Money is available, though I’m sure it’s still not cheap. [Read more →]

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Ciena Still Suffering

June 4th, 2009
 

Network equipment provider Ciena (NASDAQ:CIEN, news, filings) reported earnings today, and while the forecast is for improving weather their results show that it is definitely still raining outside.  Fiscal Q2 revenues of $144.2M were down almost 14% sequentially and 40% over the same quarter last year.  That’s definitely nothing to write home about, almost everyone expected a decline but not that big.  The company reported a loss of $503M, but most of that was on a $456M goodwill charge which doesn’t really mean very much at the moment.  However, adjusted net loss of $0.25/share was still not a happy number. [Read more →]

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On Level 3’s Regional Push

June 4th, 2009
 

Yesterday Brendan posted this question about Level 3 Communications (NYSE:LVLT, news, filings):

I am a LVLT shareholder, and it seems everyday when I check up on their news, they just upgraded an a regional network. What do these upgrades mean, and does it make any difference to a shareholder, or just a better experience to the customer.

This effort to reach mid-sized regional and local enterprises by Level 3 began last month, when they announced the it during their earnings call along with the first markets in the expansion.  I did write this article about it at the time, which still represents most of my thoughts on the subject.  Since then, the company has issued five PRs, one for each market – Washington DC, Colorado, Nashville, Seattle, and upstate New York.  In each they introduced the general manager for the market, listed how many thousands of enterprises their fiber passes in each, and announced an [Read more →]

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Undersea Upgrades Abound at Global Crossing

June 3rd, 2009
 

International fiber and data provider glbc announced a series of upgrades to its undersea infrastructure today.  According to the company, the moves come in direct response to traffic growth across the board internationally but most specifically into and out of South and Latin America.  In order to keep up, Global Crossing is adding [Read more →]

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CenturyTel, Embarq to be Renamed CenturyLink

June 3rd, 2009
 

When their merger completes sometime this summer, the union of CenturyLink (NYSE:CTL, news, filings) and eq will be known as ‘CenturyLink’.  All that stands between them and that glorious title is final FCC approval.  That approval isn’t really much of a hurdle of course, can anyone imagine the FCC saying no to this one after presiding over the reconstitution of AT&T?  Of course not. [Read more →]

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More On Fearing Dumb Pipes

June 3rd, 2009
 

Vijay Gill wrote a nice article today looking at the common telco fear of becoming a dumb pipe.  He suggests that they are digging their own hole by outsourcing their networks and personnel, that they are de-emphasizing the very things they should be putting their effort into.  To put it another way, if you can’t do the ‘dumb pipe’ properly and make decent money then how can you expect to be the best ‘smart pipe’?  That only works if ‘best’ means [Read more →]

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Clearwire Opens In Vegas, Unofficially

June 2nd, 2009
 

Upstart WiMAX operator clwr is apparently now selling service to Las Vegas, although it won’t officially launch the whole package just yet.  Word leaked out after coverage maps started showing up on clear.com, and the company confirmed the news yesterday.  Las Vegas is of course on the list for this year, and will apparently follow the Atlanta launch quickly. [Read more →]

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Metro Fiber and Lit Building List Update In Progress

June 2nd, 2009
 

I am in the process updating my metro fiber and lit building list, so today I am soliciting for any new or simply more recent data that anyone may have.  If a company is already on the list and keeps updated numbers in a public document, I will likely find it easily enough.  If not, feel free to send updated information along.   All structures that consume bandwidth count, from carrier hotels to general stores and even wireless towers.  While a few companies on the list have European assets which are included in their numbers, for the most part metro fiber and lit building information in Europe has been harder to come by.  I’m going to at least try [Read more →]

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Level 3 Aims Southward

June 1st, 2009
 

Level 3 Communications (NYSE:LVLT, news, filings) announced fiber and equipment upgrades today along the Texas-Mexico border, specifically in McAllen and Laredo.  This initiative will bring both additional capacity and a wider range of services to the region, and will allow Level 3 to better target cross-border traffic of all kinds.  Level 3’s footprint in southern Texas is not part of its original build.  It comes from the WilTel and Broadwing footprints, but I have never known if the facilities were part of the original build of either of those two operators or if the fiber came as part of a capacity swap from someone else.  Perhaps a reader knows? [Read more →]

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Profile: Stratus Telecommunications, the Magic behind the Jack

June 1st, 2009
 

With all the hubbub surrounding MagicJack, it is easy to dismiss them as nothing more than a marketing machine.  But behind the infomercials lies a network – the CLEC network that often gets credit for the ability to offer such low pricing.  That network is built and largely operated by MagicJack’s sister company, Stratus Telecommunications.  MagicJack and Stratus are both owned by Ymax but are managed independently, and while Stratus supplies the infrastructure for its sibling, those same products are also sold to network operators across the sector.  Stratus’s offerings are based on [Read more →]

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Fiber Valuations Continue to Climb Back

May 31st, 2009
 

It does seem now that winter was the low point for market valuations of fiber based competitive telecoms in this cycle, because since then there has been a steady upward trend.  Part of that has come in the debt markets, where bond prices have in most cases moved closer to par.  For instance, back in December, Level 3 bought back a pile ($173M) of its 6% convertibles due 2010 at just 70 cents on the dollar, they now trade in the mid 90s.  But common stock has also done well across the sector despite the incessant drumbeat of negative news coverage.  Here is a graph with my latest EV/EBITDA calculations for a cross section of the industry: [Read more →]

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