Article 43


Saturday, May 16, 2009

Can Obama’s Plan Sway Alcatel-Lucent To Stop Laying Off Americans?

The new ALCATEL-LUCENT has not only been aggressively CUTTING JOBS, but also it’s AMERICAN FOOTPRINT.

Could the US Broadband Stimulus Initiative sway the telecom manufacturing giant to slow down it’s US DOWNSIZING ?


Alcatel-Lucent: Stimulus Funds Hinge on Creating Jobs
Winning Federal Broadband Projects Takes More Than Technology

By Tara Seals
Xchange Magazine
May 13, 2009

WITH 7.2 BILLION SET ASIDE by the Obama administration to increase broadband penetration in the United States ($6.4 billion of that is for deployments), the industry has a fair bit of soul searching to do to find the best pockets of opportunity while completing the federal mandate of creating jobs. Infrastructure giant ALCATEL-LUCENT has launched a comprehensive program for its carrier CUSTOMERS to help them do just that. Guiding principle? Community.

This is about showing that jobs will be created and sustained, and you need to show that the project you’re seeking funding for is a sustainable venture, Rich Wonders, vice president of strategic marketing at ALU, told xchange. “Jobs fall into two buckets the ones that are created from the building of the network, which are near-term jobs, and then the jobs created by having the broadband, which are long-term and the more interesting bucket.”

ALU estimates that for every 1 percent increase in broadband penetration, just a shade under 300,000 jobs are created. Industries are able to come to where they weren’t able to before, and theres more opportunity in things like education services and healthcare.

Focus on Community Benefits

Wonders said that the winners of the funding will be those that inherently understand what the government is trying to do.

“Given the competitive nature of this - so many companies seeking this limited number of funds you have to differentiate for the reviewers, who are not experts in broadband, with a strong stakeholder plan,” Wonders explained. “The process is such that all the applications for funding look the same you’re applying for money to build out broadband. But if you say, I’ve got four community applications to do this, this, this and this, and here’s an idea of the projects this will enable, that will create the most jobs and provide the most community benefit.”

Therefore, the solutions carriers should offer should include not just wireless or wireline access and a full suite of backhaul and transport, but also community applications packages.

“There are applications for distance learning, health care, public safety and more that turn a broadband network into something that drives community value rather than simply gives consumers fast downloads of YouTube,” Wonders said. “We can show them the applications that they’d see elsewhere gaming, video, Facebook. But those aren֒t what they care about. They care about things like telemedicine, the ability to do remote diagnostic and surgery. This is why we want to drive broadband further out.”

Have a Sustainable Business Model

Carriers might need to show a municipal element to the applications for funding, but theyll also have to demonstrate that the project is a sustainable one.

“There are just too many stories where cities wanted local fiber rings and muni wireless and that failed because there was no sustainable business model,” said Wonders. “So you’re going to have to talk about take rates and what you will charge, because the government doesnt want to end up funding a bridge that goes halfway across the river. If all you do is show that you want to connect all the schools, that’s only half the equation.”

Similarly, he notes that getting money to fortify backbone capacity to support service providers is an unlikely grant recipient. “A lot of companies want to build out big pipes to make it easier for service providers to come in and serve underserved pockets within a city a sort of build it and they will come tactic,: said Wonders. “But that’s not going to happen. For that pitch to work, you need to find multiple local providers that can commit to doing that. Otherwise youre building a highway with no off-ramps.”

One big area of opportunity in ALU’s view is smart grid - a rollout that will be funded by a separate bucket of money from the Department of Energy. As you deploy this network and think about the apps you layer on top - smart METERING and utilities it gets pretty exciting,” said Wonders. Especially since there’s a separate pile of money from the DoE to fund this.

He said it’s likely that carriers will find traditional utility providers going after the DoE money, and municipalities going after all these funds. “A lot of times there might be a muni that can do smart grid,” said Wonders. “But if they’re not a provider of electric services already, theres strong direction from the government to go seek partners on this, so there’s an opportunity there.”

Offer the Right Technologies for the Project

From a technology perspective, the guiding principle is, faster is better.

“Things look a little different from when the initiative was first announced,” explained Wonders. “Unlike what we originally thought, theres no set-aside for specific technologies or interests wireless, public safety, not in there. And there’s a fair amount of work in defining underserved and fairly served, and broadband in general.”

“That said, the government has said that while its taking a technology-neutral approach, it’s looking to get the fastest technology to the greatest number of people. There are interests pulling in opposite directions,” said Wonders. Faster is better, and fiber is the only future-proof technology we have in the industry. On the other hand, there’s a limited amount of funding, so the tension is around connecting as many people as possible with the fastest broadband available.

“Wireless is in a unique position. If you have EV-DO Rev. a or HSPA+ and are looking to expand that into an area that already has a broadband operator, that’s not going to garner a great amount of funding, of course,” Wonders noted. “But in the right place, wireless makes all the sense in the world. But it has more to do with the broadband ecosystem, availability of spectrum and who your partners are. Also it needs to be licensed spectrum. We strongly advise against unlicensed too any pitfalls there.”

To try and quantify and clarify how its carrier customers can pursue the opportunity, the vendor has a program that falls into four categories: public policy in the form of submitting comments, giving regular updates for customers and providing advocacy; hosting a series of industry events and having conversations with media in an effort to bolster communications on the subject; creating stimulus-specific solution bundles with community applications; and creating a series of learning programs for carriers that include a Web site presence, Webinars, collateral and live workshops.

We look at this money as an opportunity to build the network for the next 50 years,” Wonders said. “Spend the money on the right customers with the right technology, and this can be an opportunity that none of us have seen before, and likely won’t see for a long time again.”


Posted by Elvis on 05/16/09 •
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