Tuesday, December 24, 2013

God bless us, every one!

Merry Christmas, dear reader. I hope the new year ahead holds untold wonders for you. I resolve, once again, to try to post more in 2014, as it marks the 10 year anniversary of this humble bloglet. In the meantime, here's hoping you enjoy the winter religious or secular observance of your choice.

One person has already received his Christmas present, and that's my friend and former colleague Tim McDonald, who is joining magicJack Vocaltec as COO! I first came into contact with Tim 10 years ago, as he was one of the early supporters of my blog. When I was invited to speak at an Eli Noam event at Columbia in late 2004, I got a chance to meet him face-to-face, and was introduced to some other members of his team at Merrill Lynch. Tim became a key advocate of my recruitment to that team, which I finally joined in 2007.

Tim possesses one of the sharpest minds I have encountered, and he is uber-connected in industry, as well as being a helluva nice fellow. I wish him every success in this new role, and I think the company is very fortunate to have him on board. I will follow developments with interest, as the world of VoIP is set to become more interesting in 2014.

Tuesday, December 10, 2013

My presentation last week in Budapest

Last week I had the pleasure of presenting at a conference hosted in beautiful Budapest by the Hungarian national telecom regulator, NMHH. The theme of the conference, broadly, was whether the telecom sector is once again becoming attractive to investors, and if not, why not and how might regulation play a role in restoring some stability to the sector? I was on a panel with three sell-side equity analysts, but I had determined beforehand to talk about the role of private entrepreneurial capital in changing the status quo in FTTx investment, with a particular focus on Germany and the UK. My presentation begins at 1:02:20.

The last few minutes of the video feature an unidentified commenter skewering my analysis of the UK market. He was speaking from the back of the room, and the lighting was such that I couldn't make out at the time who he was, but both the moderator and I came to the conclusion that he must be a BT employee, given the level of defensiveness and irritation evident in his commentary.

It turns out that it was Ed Richards of OFCOM. He lambastes me for the "utter nonsense" of suggesting that Spotify or Twitter require FTTH connections. That would be utter nonsense, if I'd actually said that, but I didn't. What I said was that if you live in a post-industrial city in Eastern Germany and you want to start the next Spotify or Twitter, you're going to need to move to Berlin (I was referencing a map which shows a dearth of connectivity >50Mbps outside of Berlin in the eastern half of the country).

Maybe I wasn't clear enough, but I was assuming the audience would implicitly understand the fact that start-ups dealing with data-intensive platforms need fast pipes to data centres, and these may not be readily available anywhere except the major cities. I never said, as Ed asserts, that Spotify or Twitter could never have been developed in the UK or Germany because of connectivity issues. My implication was that data-intensive start-ups would naturally gravitate to places where the connectivity and associated infrastructure was conducive, and that as long as this remains concentrated in a few large cities, it just perpetuates the economic disparity between the major hubs and the second tier cities struggling to redefine themselves. Perhaps years of listening to incumbents complaining about their imminent doom leads to a higher propensity towards selective deafness among the regulatory community.

I was also apparently too harsh for not recognising what has apparently been a highly successful and widespread UK fibre roll-out. I must have been asleep, because I haven't seen any fibre rolled out in the UK. Just because the ASA allows it to be marketed as "fibre optic broadband" doesn't magically make it fibre. On this basis, we might as well allow bog-standard ADSL to also be called fibre, as the exchanges where the DSLAMs sit are backhauled by fibre. Hell, mobile could be marketed as fibre. The term, as used in the Orwellian context in which it has been cast in the UK, is meaningless, though I fear that saying so might constitute thoughtcrime.