The pace of change is picking up

For those of you who follow our Press Releases, you'll see that the last couple of weeks has been pretty busy for us. We switched auditors, filed our Annual Report (10-K) and successfully completed the acquisition of Interactive Network Services, Inc. (INS), a New Jersey-based Internet Service Provider (ISP) providing primarily municipalities and more than 40 public schools in the U.S. Mid-Atlantic region with connectivity, web hosting and co-location services.

As you can imagine, that hasn't left a lot of time for blogging, but just like a kettle will boil once it is no longer being watched, the pace of change in the industry went from a jog to a Sprint (every pun intended) while our attentions were elsewhere.

So, to recap the events of the last couple of weeks, it boils down to the following; 700Mhz spectrum auction, Google throwing their ring in the hat, Sprint / Clearwire partnership, and finally today, the announcement of a Sprint / Google partnership.

• 700MHz spectrum auction
  This has seen intense lobbying of the FCC, by established carriers and potential new nationwide players. Previously used for UHF television, it has the potential to raise up to $20BN for the US Treasury (source: Aloha Partners). Where all the intense lobbying is coming from is the level of 'openness' that the different players are pushing for. Several groups want the auction rules to require that a winning bidder cannot offer retail sales of services. Rather, the winner would have to build a wholesale network and sell on a non-discriminatory basis. Other forms of openness include allowing any legal device to connect and allowing any legal use. These are pillars in the network neutrality platform, of course. (The four pillars are often cited as any resale user, any use, any device, and no tiered service.)

• Where does Google fit in?
  All of the top mobile carriers will be bidding on this spectrum, with AT&T being the powerhouse. Google have thrown their hat in the ring, committing to bidding a minimum of $4.6b if the auction proceeds with as much openness as they want. They have asked the FCC to embrace four additional conditions as part of the auction rules: open applications, open devices, open services, and open networks. Sensing a seismic tilt to the playing field, the other big carriers are lobbying hard to have the auction structured in a way that keeps Google out.
  

Here at NextPhase, we very strongly support network neutrality, and are hopeful that the FCC listens and acts wisely. Open networks are good for competition and good for the consumer. It allows resellers to differentiate themselves by service, and keeps them focused on delighting their customers.

• Sprint / Clearwire partnership
  Stating that they want to do for the Internet what cellular networks did for voice calls, Sprint Nextel and Clearwire Corp. confirmed reports last week that they will collaborate to build out a nationwide WiMax network. The companies will not build out the network together in specific locales, but will independently install and light up infrastructure in the territories they've already targeted, enabling roaming between the two networks. They will also "work jointly on product and service evolution, shared infrastructure, branding, marketing and distribution," according to the statement, as well as exchanging selected 2.5 GHz spectrum in certain areas to optimize the network's performance.

I've probably had more investor calls on this topic than anything else, and what I've told everyone is that NextPhase sees this as a very positive move, both for the industry at large, and for our Company. With one big, bold move like this, Sprint Nextel and Clearwire Corp have legitimized the wireless broadband (and specifically, WiMax technologies) industry. To date, much of our time is spent on educating potential customers on the benefits of wireless technologies (e.g. flexibility, scalability, speed to deploy, cost-effectiveness, etc.) and this announcement makes that job a lot easier for us.

• Sprint / Google
  Google Inc. has made its biggest move yet on the U.S. mobile Web market by signing a deal with Sprint Nextel Corp. that positions the Internet company to build services to run on Sprint's planned WiMAX high-speed wireless network. The two companies announced today that Google will provide its Internet search service for a Web portal that Sprint is developing for the new WiMAX network. The press release went on to say that the deal is expected to boost Web access over the new WiMAX network and expand use of Google's search and communications services on mobile devices, with Google confirming that broadband wireless connectivity is key to growth and its strategy of selling Internet advertising.

Again, from NextPhase's perspective, announcements like this one only confirm that we're rapidly moving beyond technologies to rapidly maturing ecosystems. As I mentioned earlier in this post, the key differentiator is going to be service delivery. Here at NextPhase, we've been assembling all of the critical building blocks to be successful in this environment. We continue to build out our national presence in key secondary and tertiary markets through our M&A activity; we continue to expand our customer call center capabilities in Marietta, Georgia; we continue to develop relationships with market-leading partners, to deliver the next level of value-added services that will plug into this rich ecosystem.

A lot is happening very quickly, and it is a very exciting time for a very young industry, and particularly so for NextPhase. Keep watching this space, and we'll continue to try and to set all of these events into context, and sharing our insights into what we think will happen next.