RESELLER CHANNEL: Broadband Brokers Rebrand Business-class Cable Access

Posted: 3/2003

Broadband Brokers Rebrand
Business-class Cable Access

By Khali Henderson

Cablecos are taking a closer look at
the advantages value-added resellers can play in bringing large multilocation
business clients onto their high-speed services.

At the urging of MegaPath Networks
Inc., an aggregator of broadband access networks for distributed enterprises,
Cox Business Services LLC is rolling out a resale program for what Cox National
Account Manager Dave West calls "service brokers." MegaPath became the
company’s first such wholesale customer in November 2002.

MegaPath also signed a similar
agreement last fall with Time Warner Cable, a division of AOL Time Warner.
MegaPath resells Time Warner Cable’s business-class cable broadband access to
telecommuters and remote branch offices in 44 regional service areas in the
United States.

Dan Foster, Megapath’s chief
marketing and sales officer, says MegaPath’s agreements are firsts for both
companies. Time Warner Cable declined to be interviewed for this article, but
Cox Business Services confirms MegaPath is the company’s first reseller.

"A lot of the folks did not
have a wholesale program or the sales and support infrastructure in place when
we first started talking to them," Foster says. "Rather, what we did
was help them think through it [and] understand why it would be valuable to

He explains cablecos, because of
their limited footprints, find it difficult to win large national accounts.
However, he says, in its search for alternative access solutions for teleworkers
and branch offices, MegaPath found cable access coverage areas often are
complementary to telcos’ DSL. "So in some cases DSL would not be there, but
there was cable plant there that had been upgraded to two-way HFC," he
says, adding that cable access, therefore, expands MegaPath’s ability to serve
customers. Megapath offers cable access in 62 U.S. markets.

"We will get anywhere from 10
to 20 percent more coverage at a minimum with the cable footprint," he
says. A recent insurance company win was due to the ability to serve several
points with cable access, he adds.

Foster says MegaPath has customers
online with both Time Warner Cable and Cox Business Services. These include some
business-class customers requiring static IP addressees and higher levels of

Getting to this point hasn’t been
easy, however. "I think there are a host of opportunities and challenges
for these folks as they start to build programs. One of them is the support
structure required to scale nationally," says Foster.

West adds, "With Cox, the way
we operate is autonomous. Everyone does their own thing in their own market, so
in order to be able to accommodate the service operators, the brokers, the
value-added resellers, we had to put a program together where we could bring all
Cox markets together.

"It’s been a trial and error.
It’s been working with the people like the MegaPaths out there to find out what
they need from back-office support — that kind of thing. We’ve been developing
that process ever since."

West explains Cox Business Services
developed a Web tool to manage orders — order entry and order status — between
the markets and the service broker. Billing is aggregated on a market-by-market
basis on behalf of the broker’s master account, and is provided in paper form.
By the end of second quarter, West says Cox Business Services expects to roll
out its SmartCombo billing, which will aggregate billing from all markets under
one master account and will be available electronically — on CD-ROM or FTP

MegaPath already has an electronic
NOC-to-NOC interface with the cablecos to facilitate support.

MegaPath is pleased with the
progress so far, says Foster, but the company would like to move the
relationship beyond a VAR play to peering.

"We’ve talked to them about the
desire to provide a peered relationship so that we can hand the traffic off to
our network, but in the near term, there has been not a lot of progress in that
space," he says, referring to the ongoing push for cablecos to unbundle
their networks (click here) .

"They have not unbundled their
solution to the point that we can peer with them and provide a traffic handoff
at Layer 2 level, much as the ILECs and the CLECs have over the last several
years," Foster says. "So, we start to lose some control over not only
the Layer 3 portion of the network, [but] the ability to do real-time
diagnostics for the customer."

Jason Knowles, an analyst covering
network services for Current Analysis Inc., notes, "MegaPath is a reseller,
and as such, the company doesn’t have control over the last-mile access.
MegaPath is at the mercy of its partner for provisioning or to resolve any
technical problem, and as a result, the company’s SLAs aren’t very competitive.
Furthermore, the company isn’t able to be as flexible with pricing."

In the face of these challenges,
Foster says, "We remain optimistic because we have openly worked with them
to define new methods and procedures in the wholesale business on the support
side of the business, we would love nothing more than to be a pioneer with the
cable companies to understand how to do scalable peering and handoff of traffic
in a true wholesale environment."

Cox Business Services spokesperson
Bobby Amirshahi says, "At this time we’re not looking at giving more
visibility into our systems and NOC to MegaPath. Cox may reconsider that as
MegaPath generates more customers for us, and as we bring other aggregators into
the mix. But right now, we’re not."

Meanwhile, Cox says it is in
negotiations with other ISPs, but has not inked any new agreements.

Perhaps one reason is the
incremental value to ISPs serving businesses is thus far marginal. "While
cable broadband access is the technology of choice among consumers, it hasn’t
fared so well in the business market," notes Knowles. "Part of the
problem has to do with security and performance degradation problems that
plagued cable access early on, but the larger problem is that of availability.
While the cable companies are trying to remedy this problem, the fact remains
that many office dwellings are not cable ready. Finally, this is a new and
relatively untested service in the business market, and as such, the service
will likely experience some growing pains."


Cox Business Services LLC
MegaPath Networks Inc.

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