Most channel partners, when considering selling cable services, think in terms of coaxial service. And, sure, this low-cost Internet access service is popular with customers, but one of its drawbacks is the lack of SLAs. In a 2011 survey of channel partners, two-thirds said it keeps them from recommending cablecos as primary providers. Cablecos are quick to point out that coax is not the only game in town; they offer high-capacity SLA-based Ethernet and optical services too.
Indeed, with their sights set firmly on earning new revenues from business customers, the nation’s largest cable MSOs invested, and continue to invest, considerable time and money in their networks and customer support systems, explained industry analyst Craig Clausen, executive vice president and principal analyst with New Paradigm Research Group. "Initially, cable MSOs established beachheads with smaller businesses by offering them cost-effective, high-speed Internet access riding over their coax facilities," he said. "Business users satisfied with the cable companies' performance on this foundational service became receptive to the idea of letting the MSOs provide them with more critical voice and data services."
The cablecos' response was to pack their data portfolios with services comparable to those offered by the ILECs and CLECs, including fiber-based multipoint Ethernet and high-bandwidth, low-latency optical transport.
For channel partners, these services represent an opportunity to source both cost-effective and diverse network connections for their business customers video, cloud computing and other bandwidth-intensive applications.
"While the ability to provide business uses with cost-effective bandwidth services is important, it's only part of the picture," said Clausen. "More important to business users are the solutions that can be provided over big pipe circuits. The fiber and Ethernet-based broadband services cable MSOs are currently ramping up put them in a position to be credible solutions providers to businesses."
For example, Ethernet Private Line is a point-to-point service that is well-suited for Internet access, remote data backup, data center connectivity, LAN-to-LAN connections and more. Ethernet LAN, which enables multipoint-to-multipoint communication, can be used for distance learning, video conferencing and more.
Today, four of the top five MSOs have developed channel programs, enabling partners to sell high-capacity connections, including Comcast Business, Cablevision (and its Optimum Lightpath division), Time Warner Cable Business Class, and Charter Business. While these are the country's largest cable companies, none offers a nationwide solution, which can pose a logistical problem for high-bandwidth customers that tend to be geographically disbursed, multilocation enterprises.
"Cable MSOs are limited to their established footprints. MSOs do not sell or build out networks in each other's footprints," explained Tom Azelby, founder and managing partner of Bandwave Systems.
Broadband aggregators like Bandwave have stepped in to fill the void. Some of these are the same companies that aggregate telco DSL. Today, however, they also are working with cablecos to patch together coax and Ethernet/optical services across MSO territories. Here are three aggregators that work aggressively with the channel:
- APXnet, founded in 2001 as NLT Co., specializes in cable coax and fiber services in the top 20 metro markets and most tier 2 and 3 rural markets in 45 states.
- Bandwave Systems, founded in May 2000, provides broadband — cable DSL,T1, T3, fiber and wireless) — to businesses with multiple locations.
- NetWolves Corp., founded in 1998, offers data connectivity services, including frame relay and private lines with transmission speeds ranging from 56KBps to T3, or broadband services such as DSL and cable, as well as IP and ISDN services.
Executives at these companies say the value proposition for broadband aggregators is the ability to construct custom footprints for business and wholesale customers. Aggregators also provide a single point of support, one contract and one bill.
Download the Channel Partners Digital Issue, "Beyond Coax: Selling Cableco Ethernet & Optical Services."