Today's Top Stories AT&T (NYSE: T), Verizon (NYSE: VZ) and CenturyLink (NYSE: CTL)--three of the largest U.S. incumbent telcos--are in the midst of a patent war with Brandywine Communications Technologies, a patent holding company. In a number of U.S. court complaints, Brandywine claims that a number of telcos and CLECs have infringed on seven different DSL-related patents that it says it owns. At issue are patents that relate to various DSL-related techniques, from "detecting loss of echo cancellation" (U.S. patent number 5,206,854) to "predistortion technique for communications systems" (U.S. patent number 5,251,328). To date, Brandywine has sued over 39 different service providers. In addition to filing a lawsuit against AT&T, Verizon and Centurylink last year, the company has sued Windstream (Nasdaq: WIN), IKANO, and Megapath. It is also currently trying to settle one of its cases with EarthLink (Nasdaq: ELNK). Brandywine's moves are familiar to anyone who's been following the string of patent infringement claims--some apparently legitimate, others somewhat sketchy--that have plagued providers across the industry. Last May, a group of eight service providers and vendors, including Alcatel-Lucent (NYSE: ALU), EarthLink (Nasdaq: ELNK), and Metro PCS, entered into separate patent agreements with visual voicemail provider Klausner Technologies for its consumer and enterprise visual voicemail products. However, three of the other 12 defendants, including Toshiba America, Primus Telecommunications, and Paetec--which at that time had just been acquired by Windstream, now also defending a patent infringement lawsuit brought by Klausner, did not settle. While Brandywine is the latest so-called "patent troll" to emerge, they likely won't be the last as patent disputes have been an ongoing issue in both the wireline and wireless segments of the telecom industry. A recent report found that patent infringement lawsuits have increased over the past five years from 22 percent of all patent lawsuits filed to 40 percent. For more:
- Broadband DSL Reports has this article Special Report: 5 nightmares that keep telecom executives up at night Related articles:
Week in research: Patent trolls now file 40% of patent lawsuits
Earthlink, Alcatel-Lucent among providers to settle voicemail patent suits with Klausner
Windstream becomes Klausner's latest visual voice mail patent target
Klausner files suit against Cisco, Avaya over voicemail patent
Verizon looks to stop voicemail lawsuit Read more about: Patent Infringement
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The FCC on Monday put a number of changes on the table to rework Phase I of the Connect America Fund (CAF), including the definition of "underserved" areas and how to best allocate the remaining $185 million in broadband funds. Last year, the FCC introduced the CAF as a way to modernize the Universal Service Fund (USF) and intercarrier compensation (ICC) programs by redirecting funds to focus on expanding broadband availability to over 18 million consumers who live in "price cap" areas that currently get no broadband service. One of the problems that have plagued these communities from getting broadband is that it has been far too expensive to build the necessary facilities (fiber and DSLAM) equipment to deliver service in areas where the density of homes and businesses are low. "Broadband has gone from being a luxury to a necessity for full participation in our economy and society--for all Americans," the FCC said in an earlier statement about the CAF. As it starts to implement Phase II of the CAF, the FCC has asked for comments on CAF Phase I rules. The FCC said it has advocated to expand the definition of unserved areas so that CAF Phase I funds were being used to provide services that met the minimum broadband speed requirement it set. In addition, the regulator wanted feedback on proposals for the next round of Phase I funding "including tying funding to the construction of second-mile fiber, tying funding to the estimated costs of deployment in an area, and maintaining the $775 per unserved location metric." Interested parties have until Jan. 28 to send comments and until Feb. 11 for reply comments. In 2012, a number of service providers, including CenturyLink (NYSE: CTL), FairPoint (Nasdaq: FRP), and Frontier (Nasdaq: FTR), were awarded CAF funding to expand broadband services in their territories. However compelling the CAF program is, it hasn't been without controversy. CenturyLink and Windstream (Nasdaq: WIN), for example, only accepted portions of the CAF funds they were eligible for. One of the key issues for these telcos was the rule that the regulator would support $775 per household. CenturyLink only accepted only $35 million of the $90 million for which it was eligible to deploy broadband service to 45,000 homes in rural areas that are deemed "unserved." At that time, the telco said that restrictions on the initial round made "further deployment uneconomic." Likewise, Windstream only accepted $653,000 of the $60.4 million it was offered, citing the limitations of the CAF I rules. Windstream said that while it "has aggressively invested its own capital in its broadband network over the past 10 years, there are very few areas in its territory that can be served for $775 or less in government support, as required by the CAF-1 rules." For more:
- Court House News Service has this article Related articles:
UPDATED: CenturyLink gets $35M in FCC CAF funding for broadband expansion
FairPoint gets $2M CAF grant to extend broadband service in Vermont
Frontier secures $72M Connect America loan to expand broadband reach
FCC's Connect America Funding initiative leaves 13 states in the cold Read more about: FCC
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Armstrong Telephone Co., an independent telco and cable operator, on Wednesday announced that it has expanded its use of Equinox Information Systems' TeleLink mediation and revenue assurance solution to include least cost routing (LCR) functions. Since 2010, the Butler, Pa.-based service provider has been using the TeleLink solution for reporting and invoice validation. Given the history it had with using the platform for those functions, Armstrong decided it to use the product for LCR functions as well. Least Cost Routing is the process of analyzing, selecting and directing the path of outbound communications traffic, depending on which path delivers the best rates for voice services. Equinox said that it enhanced the TeleLink platform to meet Armstrong's own requirements. The platform provides various functions including automated tools for outputting least cost route guides (by jurisdiction and route parameter), performing optimal route calculations, and analyzing the cost-effectiveness and actual cost implications of inserting a new carrier into call routing. Having this platform in place will help the telco, which delivers voice services via its traditional wireline telco network and its cable properties in Ohio, West Virginia, Maryland, Pennsylvania, and New York, to better manage its voice traffic and its work with other carriers that terminate calls. "The new TeleLink tools will allow us to reduce costs in a number of ways—decreased labor costs through automation as well as providing lower operating costs via an apples-to-apples comparison of rates and routes across multiple carriers," Tom Wilson, director of Telecom Traffic Management for Armstrong Telephone, said in a release. For more:
- see the release Industry Voices: The opportunity in evolving IP services Related articles:
SCTE to spotlight small MSOs Armstrong, BendBroadband, Buckeye, Massillon
Calling cable a 'men's club,' NCTA exec pushes SCTE Cable-Tec attendees to recruit women Read more about: Armstrong Cable
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Birch Communications on Wednesday signed an agreement to acquire Covista Communications, marking its 17th acquisition since 2006. Financial terms of the acquisition were not revealed. Covista is a facilities-based competitive telecom provider that provides services to a mix of business, wholesale and residential customers in 48 states. By buying Covista, Birch will gain access to customers that reside in a number of several southeastern, southwestern and northeastern states. Vincent M. Oddo, Birch President and CEO, said in a release announcing the acquisition that "Covista's Metaswitch-based facilities network, which has switching centers in Tennessee, New York City and Los Angeles, is complementary to our current service footprint while also adding some new markets." Besides expanding the reach of Birch's own IP network, the Covista purchase will complement its line of hosted PBX, SIP trunking and wholesale service offerings, which were launched in 2012. Joining a group of private equity firms and other aggressive competitors like Zayo, Birch has become one of the key consolidators of the competitive telecom market. Similar to other acquisitions that Birch has made in recent years, the Covista purchase once again reflects the CLEC's "tuck-in" strategy that searches for opportunities to purchase other service providers that offer similar services and geographic coverage. After purchasing Cordia in Oct. 2011, Oddo said that the service provider would purchase other competitive carriers it thought would bolster its IP-based services strategy. Keeping to that promise, last year Birch purchased both DayStar Communications and AstroTel, two acquisitions that immediately increased its presence in the Florida market. These acquisitions came not long after it secured $110 million in a refinancing effort in addition to a $7.5 million equipment financing deal with CIT Vendor Finance. With plans to continue expanding its IP network in new markets and broaden its managed telecom and IT solution sets, it's likely that Birch will be making other acquisitions that complement its network footprint and service focus. For more:
- see the release Related articles:
Birch Communications serves up SIP trunking for SMBs
Birch Communications secures $17M from Wells Fargo Bank
Birch wraps up its purchase of DayStar Communications
UPDATED: Birch Communications gets more funding to purchase new equipment
Birch beefs up Fla. network, customer base by completing AstroTel acquisition Read more about: Acquisition, Birch Communications
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Hawaiian Telcom (Nasdaq: HCOM) on Monday completed its acquisition of Honolulu-based CLEC Wavecom Solutions. After initially announcing its intention to acquire Wavecom in July, Hawaiian Telcom received regulatory approvals from both the FCC and Hawaii Public Utilities Commission last Thursday, Dec. 28. By acquiring Wavecom, Hawaiian Telcom will immediately expand its business and wholesale service capabilities with a six-island subsea and terrestrial fiber network that currently service over 1,700 customers throughout the state. The service provider said that the Wavecom deal will generate about $4.5 million of annual unlevered free cash flow upon completion of integration activities as a result of net incremental revenues and EBITDA of approximately $7 million and $3.5 million, respectively, in addition to related capital expenditure synergies. Already delivering a wide array of its own fiber and IP/MPLS networks, the telco said that as it integrates Wavecom's fiber network, its network capabilities "will be enhanced through augmentation of fiber capacity and diversity statewide." Acquiring Wavecom will provide another boost to Hawaiian Telcom's business and wholesale revenue mix. In Q3 2012, it reported that business revenues rose 1 percent year-over-year to $41.6 million due to a 6.3 percent rise in business high-speed Internet (HSI) subscribers as well as higher equipment sales. And while legacy TDM revenue losses drove Hawaiian Telcom's wholesale revenue down 2.1 percent to $17.6 million, the ongoing growth of Ethernet circuits provisioned over the new fiber builds helped drive wholesale carrier data revenue up one percent year-over-year to $15.7 million. In related news, Hawaiian Telcom announced on Wednesday that its stock has been elevated to trade on the Nasdaq Global Select Market. For more:
- see the Wavecom release
- here's the Nasdaq announcement Related articles:
Hawaiian Telcom acquires Wavecom Solutions, adds more fiber to its network diet
Hawaiian Telcom and union ratify five-year agreement
Hawaiian Telcom names Scott Barber as its new COO
Hawaiian Telcom Q3 next-gen revenue gains offset by 5.6% decline in voice access lines
Hawaiian Telcom employs Intrado for next-gen 911 services Read more about: Acquisition, Hawaiian Telcom
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