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Entries in The CLEC Monitor (180)

Wednesday
May022012

XO Communications Launches Concentric Cloud Solutions

Source: XO Press Release

XO Communications announced the launch of Concentric Cloud Solutions. Concentric Cloud Solutions offers new cloud computing, content acceleration, and cloud voice solutions for businesses. 

Concentric Cloud Solutions leverages its own cloud-based technology, technology from partners including Limelight Networks, LiveOps, and VCE, and the XO nationwide network to offer customers cloud computing, content acceleration, and cloud voice services. Concentric Cloud Solutions services are available through an on-demand model to support the rapid deployment of virtualized environments and services.

Wednesday
Apr182012

Birch Closes on $750k Deal for AstroTel Assets

AstroTel Settles Up With Verizon Post-Close

Birch Communications has closed on its 14th acquisition since 2006, and its second consecutive deal involving a property operating in Chapter 11. The Atlanta, Georgia-based CLEC and managed services provider announced on April 11 that it had completed its acquisition of the operating assets of AstroTel, a Bradenton, Florida-based CLEC.  Birch paid $750,000 cash for AstroTel’s IP-based network that spans Florida’s West Coast, its telephone customers and associated account receivables. 

Birch purchased AstroTel from Mike Ray, who owned 100 percent of the twelve-year old company.  Ray had been operating the company in bankruptcy since early 2011. According to its Chapter 11 filings, AstroTel maintained only $325k in assets and around $675k in liabilities at the time it declared bankruptcy, with $539k of the liabilities associated with an arbitration claim owed to Verizon Florida, LLC.

The funds due to Verizon were disputed costs that Verizon had charged AstroTel through the telcos’ interconnection agreement; Verizon is the ILEC in AstroTel’s service area.  After losing its arbitration case, AstroTel sought injunctive relief and filed its own lawsuit against Verizon claiming (among other things) that the ILEC intentionally impaired services to AstroTel subscribers, falsified installation and repair records, and failed to inform AstroTel when customers cancelled service. AstroTel also stated in its lawsuit that it was forced to expend undue resources deciphering Verizon’s inaccurate and falsified bills for many years.

It appears however that the close of the Birch deal will bring some closure to the Verizon/AstroTel legal disputes. According to documents filed will the FCC and the US Bankruptcy Court of Florida, terms of the Birch acquisition dictated that upon the deal’s close, AstroTel was required to pay Verizon $489k of its arbitration award, and drop any of its outstanding claims against the ILEC. 

At a price of just $750,000, Birch paid below 1x revenues for the Florida CLEC.  AstroTel stated in its bankruptcy filings that it generated around $1m in revenues in 2010, indicating a deal multiple of approximately 0.75x revenue.  This discounted deal continues a recent bargain hunting trend for Birch. In October 2011, Birch closed on a deal to acquire the assets of Orlando-based Cordia Communications for $8m, paying just 0.1x revenue for the bankrupt CLEC.

Since its inception in 1997, Birch has used M&A to grow its client base from 100 customers to over 100k customers in over 38 states.  Recently however, the company’s growth efforts have been targeted to the Southern US.  In addition to its two Florida based acquisitions (Cordia and AstroTel), Birch has spent $50m developing its own IP network, located primarily in the Southeast and Southwest as it looks to expand its services to include a wholesale offering in the regions.

Wednesday
Apr182012

Study Released by FTTH Council Explores Existing Gigabet to the Home

Source: FTTH Council Press Release

Early adopters of gigabit fiber optic service are online for three times the daily average of Internet users and tend to have relatively complex home networks supporting five or more devices, according to a study released by the Fiber-to-the-Home Council Americas.

The report, provided to the Council by Telecom Thinktank and RVA LLC, offers a glimpse into the small but growing community of gigabit Internet users who are receiving their service from one of more than a dozen telecoms that now offer the service in locations throughout the world.  Gigabit subscribers were surveyed to determine their motivation and utilization of the ultra-high speed broadband access.

Download the report here.

Among the network operators now offering gigabit service to homes in the United States are EPB in Chattanooga TN, Paxio and Sonic.net in California, and Lafayette Utilities in Louisiana.  Early gigabit providers in other regions of the world include Telia in Sweden, ZON in Portugal, Turkcell Superonline in Turkey, and NTT and KDDI in Japan.  Most of the 2012 gigabit service offerings are symmetrical, with both upload and download clocking in at a full gigabit per second.

Among the global network operators, it is estimated that the total number of residential subscribers receiving gigabit service is still in the hundreds.  However, the report anticipates that the number will grow significantly over the next year as large gigabit-enabled FTTH services are rolled out in South Korea and Singapore, and by Google in Kansas City in the United States.  RVA estimates that another 20 small, US-based FTTH providers, including municipal and competitive networks and some small local phone companies, are currently rolling out a gigabit service offering.

In their user survey, Telecom Thinktank and RVA found that the current crop of gigabit subscribers are:

  • Online an average of 8 hours per day, compared with the U.S. Internet user average of 2.5 hours per day.
  • The "earliest of early adopters," with relatively complex home networks consisting of five or more network devices.  In the U.S., 12 percent of gigabit users had 10 or more networked devices in their homes.
  • Content creators, as Hong Kong Broadband's traffic measurements show its gigabit subscribers using three times the upload bandwidth when compared to their download use.  Upload speed is critical for distributing HD photos and videos, efficient "cloud computing" and virtual presence video conferencing.

The report found that most of the telecoms providing gigabit service are doing so to establish themselves as the undisputed market leaders in bandwidth and connectivity, and to enable them to offer ultra-low latency and bundle values to technophiles and high-bandwidth users requiring a large pipe to support multiple devices and services.  Network operators also cited the appeal of superfast connectivity to work-at-home professionals requiring low latency and rapid file transfers.

Pricing for gigabit service ranges from a low of US$26 per month from Hong Kong Broadband to a high of US$560 per month at network operator Turkcell.  None of the network operators providing gigabit service was found to cap subscriber bandwidth usage. 

Tuesday
Apr172012

NTS Begins FTTP Stimulus Build in Louisiana

Source: NTS Press Release

NTS, Inc., f/k/a Xfone, Inc. announced that it has begun construction of its high speed Fiber-To-The-Premise (FTTP) Network in southern Louisiana. As the build out progresses, the fiber network will eventually include the communities of Hammond, Ponchatoula, Natalbany, Tickfaw, Independence and Amite, Louisiana, adding approximately 11,500 FTTP passings. A WiMAX service extension overlay will also bring advanced broadband services to towns in the St. Helena, Washington and Tangipahoa Parishes.

The Company’s southern Louisiana build out is funded by approximately $36.1 million in federal stimulus grants and loans.

In addition to breaking ground in Louisiana, NTS also announced that it has connected its first customers in Wilson, Texas and in Meadow, Texas. NTS’s ongoing fiber build out, when completed, is expected to reach 19 new communities in Texas and Louisiana, bringing the Company’s total FTTP passings to approximately 50,000. In addition to its presence in Wilson, NTS has established its FTTP network in the towns of Lubbock, Levelland, Smyer, Wolfforth, Littlefield, Burkburnett, Brownfield, Whitharral and Slaton, Texas.

Tuesday
Apr172012

GCI Plans to Deply Terrestrial Broadband Internet to 65 Rural Communities

Source: GCI Press Release

General Communication, Inc. (GCI) (Nasdaq:GNCMA) and its wholly owned subsidiary, United Utilities, Inc. (UUI), announced their plan to provide terrestrial broadband Internet service to the residents of 65 remote, rural communities in Bristol Bay and the Yukon-Kuskokwim Delta.

At the end of 2011, a year ahead of schedule, UUI completed the construction of TERRA-Southwest, the first terrestrial broadband transport network to link Anchorage and the 65 communities. At the beginning of 2012, TERRA-Southwest began providing terrestrial broadband service to critical community service providers such as schools, hospitals, and health clinics.

As a result of the early completion of TERRA-Southwest, GCI and UUI have accelerated their plans to deploy terrestrial broadband Internet service in the 65 TERRA-Southwest communities. The first phase of deployment will begin in June and should be completed by mid-October of 2012, a year ahead of schedule.

GCI and UUI will offer a range of new Internet service plans starting as low as $24.99 per month. In communities currently served by the satellite-based WISP system, download speeds will be eight to 16 times faster than what is available today on similarly priced plans. The new Internet service plans will be delivered over different networks depending on the community.

In TERRA-Southwest communities other than Bethel and Dillingham, the plans will be delivered over newly deployed Wi-Fi wireless networks and possibly over wireline DSL (digital subscriber line) networks in some UUI communities. Both GCI and UUI will provide the plans in all UUI communities.

Since Wi-Fi coverage is affected by many factors, including the unique topographic features of each community, the first phase of the Wi-Fi deployment may not achieve full availability of the service plans throughout a given community. After the first phase is complete, GCI and UUI will evaluate the resulting coverage and determine whether additional steps are needed to achieve additional coverage.

In Bethel, the plans will be delivered over GCI's existing video network and UUI's DSL network. GCI is still working on a service delivery solution in Dillingham, as GCI does not own a local telephone or video network and Dillingham's geographic layout is not ideal for the installation of Wi-Fi service.

GCI will also make wholesale service plans available to other local carriers in the TERRA-Southwest service area, which will enable those carriers to sell Internet service to their customers.