Charles is right 100%, and he is being as proactive as any VAR (including DR and ourselves... Charles did a WiNOG on this not to long ago) trying to figure the mess out so you can get the money (hopefully you'll spend it with us right!).
Here is what I know (and I've done more research and had more conversations than I think I cared to): - No one knows where the money is going to go or who is going to get it. Some people think the States are going to get all the money, others that Fiber will get all of the money, Telco's will get it, only people that have received RUS funding in the past will get it, etc. No one has a clear idea of where the money is going, so it's hard to say what anyone can do to help you get the money except give you an idea of what the RUS process is like. - Realistically, the only (and best) thing WISPA can do is provide a forum for people to discuss what they are doing to get the money, and WISPA can help lobby the government to get the money into our hands. I wouldn't expect WISPA to provide a "grant in a box" widget :-) - Many people are arguing already that if you haven't already filed paperwork, you're not going to get any money. It's amazing how many people have already put in RUS applications to get this money, before the rules on who is going to get it has been defined! - There are a 1,000 people now that think they are going to get a million dollars from the Government to start a WISP... I'm afraid they are going to crash and burn Metricom style. So while an incumbent might be the better choice to get the money, the packages newcomers are putting together are pretty impressive. But I digress... because... - Personally, I'm going to be surprised if the WISP industry gets even 10% of the money... the sad thing being we can do much more with it than the people that probably will get it. Anyways, I wouldn't expect any reseller/distributor/trade organization to give you the secret sauce on how to get that money. Sure we are all doing research to try to help people get money, but it doesn't mean they will be right (I've seen some pretty interesting ideas on who/how people are going to get money... some that I've wanted to laugh at). So I would start looking at filling out some of the RUS paperwork, and gathering as much information as you can. In the long run, if you want the money, YOUR going to have to go get it... everyone else can help though :-) Daniel White 3-dB Networks http://www.3dbnetworks.com >-----Original Message----- >From: wireless-boun...@wispa.org [mailto:wireless-boun...@wispa.org] On >Behalf Of Charles Wu >Sent: Sunday, May 24, 2009 10:46 PM >To: sarn...@info-ed.com; WISPA General List >Subject: Re: [WISPA] Broadband Stimulus Allocations? > >Hi Scott, > >>What has WISPA came up with to help WISP's get in on the broadband >stimulus package? Throw me some bait? As I promised before, my >membership fees(after >tax season) are sitting here... give me something >to bite. Not being an A**, but I belonged to one place(not WISPA), but >didn't get much out of it. > >>I did receive an invitation from Double Radius to help me get in on >this. Just wanting to know if WISPA got anything going on, before I jump >on that >opportunity? One of my regular suppliers that I trust. > >>From someone who's successfully navigated this process in various >iterations, the process of putting in an application for government >funding (be it RUS/NTIA/etc) is something that's measured in inches of >thickness of paper and months (or years) of labor -- at the last ISPCON, >Donny Bell, a WISP out of Minnesota mentioned that he spent in excess of >$250k in time / effort / manpower / legal fees for his first RUS loan >application -- and was denied! > >Keep in mind too, if you take a look at the comments on the stimulus >funding, there were thousands of comments (and many from people with >deep pockets and plenty of lawyers and DC lobbying) -- the competition >for this money will be, IMO, incredibly stiff and will require a full- >time expensive, sustained effort if you even want to have a chance to >win > >I think it's a bit unrealistic to expect $250 / year in dues to provide >you a turn-key solution for grant funding > >That said, for your information -- here's a link to the latest in BTOP >updates: http://www.recovery.gov/?q=content/program- >plan&program_id=5517#schedule > >-Charles > >---------- Original Message ---------------------------------- >From: RickG <rgunder...@gmail.com> >Reply-To: WISPA General List <wireless@wispa.org> >Date: Sun, 24 May 2009 13:00:41 -0400 > >>I find the "secret sauce" of converting a customer a very interesting >>subject as well. For the most part nearly every WISP I have run had a >>monopoly. The ones that didnt had a niche of some kind. My first >>owner/operator venture was not good because it was in a highly >>competitive market and I could not overcome the "go with the big >>company" mentality. My customers said I gave great service but even >>they succumbed to price. Therefore, I sold that and went back to the >>monopoly world (read boondocks). Even here, I eventually expect >>competition to enter my market. It would be nice to know the "secret >>sauce" so I can be better prepared for that day. >> >>-RickG >> >>On Sun, May 24, 2009 at 9:33 AM, Charles Wu <c...@cticonnect.com> wrote: >>>>All I can say is if you are "holding back" on doing more installs >because you can't afford it, you need to find some financing and get >installing. Once that customer is installed with something else (DSL, >>Cable, competitor), it's 10x harder to get them to switch to you. You >have to get the customers NOW. >>> >>> Now that's a more interesting discussion >>> >>> What's the business plan for customer acquisition? Do you still keep >building out into unserved areas (e.g., "first to market")? >>> >>> At this point, I would guess that most areas have competition - so >then is the business model based upon arbitraging attrition and moves? >>> >>> e.g., the average American moves every 7 years - so that means 12% of >the population is available "yearly" as a "new customer" >>> >>> So, say you have 5,000 customers in a market of 100,000 >>> >>> You'll churn 1% / month (50) - but there's a market of "new adds" of >1,000 customers every month due to just organic moving activity...so >assuming 20% market share, market equilibrium would be 20,000 >subscribers >>> >>> Not necessarily a bad thing =) >>> >>> That said, I'd be curious to talk about "secret sauce" methods to >convert customers from the competition >>> >>> -Charles >>> >>> >>> >>> Charles Wu wrote: >>> >>> Hi Scott, >>> >>> >>> >>> Regarding debt...I've found that there's a "scale inflection point" >in running a WISP (or any business for the matter) that needs to be >reached -- the main purpose for taking on debt (because due to interest, >you end up paying more in the longer term instead of buying cash), is to >accelerate growth so one can progress beyond this point >>> >>> >>> >>> e.g., if you can organically fund 30 new installs a month with cash, >if you take on debt, you could leverage yourself and now do 100 installs >/ month >>> >>> >>> >>> Now, from a business perspective -- in looking at the WISP >>> >>> >>> >>> As a stand-alone sustainable business -- it costs a minimum of about >$30k / month to operate a small WISP -- now, I'll argue that that >$30k/month in operations remains relatively constant and whether it's >supporting 300, 800 or 1500 customers -- however, at 300 customers, the >business is bleeding cash...at 800 customers the business is just about >at a break-even, and at 1500 customers, the business is a cash machine >>> >>> >>> >>> -Charles >>> >>> >>> >>> -----Original Message----- >>> >>> From: wireless-boun...@wispa.org<mailto:wireless-boun...@wispa.org> >[mailto:wireless-boun...@wispa.org] On Behalf Of Scott Reed >>> >>> Sent: Saturday, May 23, 2009 4:20 PM >>> >>> To: WISPA General List >>> >>> Subject: Re: [WISPA] Quesiton on Funding / Financing / Capital >Availability >>> >>> >>> >>> So I will take option 4 from a previous post since Travis made the >point. >>> >>> "Up to 60 months with $1 buyout is the same as a 5 year bank loan." >>> >>> I want to run debt free as soon a possible. That being the case I >don't >>> >>> lease and have not leased to keep debt down. I do have a start-up >loan >>> >>> that is being paid on a little slower than I would like, but we have >>> >>> paid off 1/2 of it in < 5 years and based on our payments, we are >cash >>> >>> flow positive. >>> >>> Granted, my WISP is a lot smaller than many that post here and our >>> >>> growth rate is small, but some of that is managing growth to stay >>> >>> cash-flow positive. >>> >>> I have seen several companies die because they became cash rich, but >>> >>> still could not cover the debt. >>> >>> >>> >>> Travis Johnson wrote: >>> >>> >>> >>> The banks can sell a car with little effort. They already have >>> >>> relationships with dealers and auctions. And often, if the consumer's >>> >>> credit is questionable, the dealer will guarantee to take the car >back >>> >>> if the loan defaults. >>> >>> >>> >>> Who is going to buy a $10,000 radio that has been repo'd? Even for >>> >>> $5k, I wouldn't touch it. I'd buy a new radio with warranty, that I >>> >>> know is good and hasn't been fried or broken. >>> >>> >>> >>> The banks will never loan on the equipment alone. There is no >security >>> >>> there... but again, why do you need a bank loan for equipment when >you >>> >>> can just lease it and get the same results? Up to 60 months with $1 >>> >>> buyout is the same as a 5 year bank loan. What's the difference? >>> >>> >>> >>> Travis >>> >>> Microserv >>> >>> >>> >>> Tom DeReggi wrote: >>> >>> >>> >>> Maybe when talking about CPE. >>> >>> >>> >>> But what about when one is talking about a $10,000 Part101 radio? >>> >>> >>> >>> Just like a car, all that the lender should need is to "hold the >title" of >>> >>> the radio until paid off, and get a down payment of $2000 to cover >the cost >>> >>> of tower climber/repo man, and a signed letter of authorization from >lanlord >>> >>> stating the location of the tower gear is installed on and they >acknowledge >>> >>> that the gear is not abandoned equipment. (So it does not >automatically >>> >>> become property of landlord in 4 months, and teh landlord knows the >>> >>> equipment owner has first rights to the gear). >>> >>> >>> >>> Think about it... Wouldn't repo costs be reduced when the repo man >knows >>> >>> exactly where to find the radio? A car can easilly be relocated and >>> >>> hard-to-find, when the owner skips town. >>> >>> Plus the home likely has an owner with a shot gun or a big dog, which >the >>> >>> tower/MTU likely does not. The MTU building might even have a >security >>> >>> guard to escort teh lender safely to the roof :-) >>> >>> >>> >>> >>> >>> Tom DeReggi >>> >>> RapidDSL & Wireless, Inc >>> >>> IntAirNet- Fixed Wireless Broadband >>> >>> >>> >>> >>> >>> ----- Original Message ----- >>> >>> From: "jp" <j...@saucer.midcoast.com><mailto:j...@saucer.midcoast.com> >>> >>> To: "WISPA General List" ><wireless@wispa.org><mailto:wireless@wispa.org> >>> >>> Sent: Friday, May 22, 2009 11:13 AM >>> >>> Subject: Re: [WISPA] Quesiton on Funding / Financing / Capital >Availability >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> In a worse case scenario, a car is probably considerably easier to >repo >>> >>> than the antenna on my roof and radio in my attic. And the car would >be >>> >>> worth a magnitude more money. The installed infrastructure is >worthless >>> >>> if it costs a huge amount to get to it. >>> >>> >>> >>> On Thu, May 21, 2009 at 07:27:09PM -0400, Tom DeReggi wrote: >>> >>> >>> >>> >>> >>> I've never found a lender willing to lend against using the in-place >used >>> >>> equipment as colladeral. >>> >>> It is the biggest double standard. >>> >>> I find it highly ironic that they'll use a car for colladeral that >looses >>> >>> 50% of its value the day it leaves the lot, and has a rate of failure >and >>> >>> risk of damage higher than just about any product on the market, and >it >>> >>> has >>> >>> a huge cash burn (gas :-). but yet lendors won't put equivellent >value on >>> >>> wireless gear, that holds its value, Ebay boasting easilly 50% after >3-4 >>> >>> years of use, even after fully depreciated. >>> >>> I'll never understand the lending market. >>> >>> >>> >>> Tom DeReggi >>> >>> RapidDSL & Wireless, Inc >>> >>> IntAirNet- Fixed Wireless Broadband >>> >>> >>> >>> >>> >>> ----- Original Message ----- >>> >>> From: <rea...@muddyfrogwater.us><mailto:rea...@muddyfrogwater.us> >>> >>> To: "WISPA General List" ><wireless@wispa.org><mailto:wireless@wispa.org> >>> >>> Sent: Thursday, May 21, 2009 1:55 PM >>> >>> Subject: Re: [WISPA] Quesiton on Funding / Financing / Capital >>> >>> Availability >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> Answers in-line. >>> >>> >>> >>> >>> >>> ++++++++++++++++++++++++++++++++ >>> >>> <insert witty tagline here> >>> >>> >>> >>> ----- Original Message ----- >>> >>> From: "Charles Wu" <c...@cticonnect.com><mailto:c...@cticonnect.com> >>> >>> To: "WISPA General List" ><wireless@wispa.org><mailto:wireless@wispa.org> >>> >>> Sent: Thursday, May 21, 2009 8:49 AM >>> >>> Subject: [WISPA] Quesiton on Funding / Financing / Capital >Availability >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> With all the hype being generated by the stimulus bill, we have been >>> >>> approached by a multitude of third party financial organizations that >>> >>> have >>> >>> a renewed interest in potentially financing rural broadband...now, >>> >>> specifically, for WISPs, in the past, equipment leasing has been a >>> >>> very >>> >>> popular option for financing, but in looking at our numbers over the >>> >>> past >>> >>> year, I've noticed a marked decline in the amount of leasing that we >>> >>> do - >>> >>> that said, I have the following questions for the listserv about >>> >>> financing >>> >>> >>> >>> Assuming that WISPs are still need to buy equipment... >>> >>> >>> >>> 1. Are you able to just purchase equipment out of cash-flow >>> >>> organically >>> >>> generated from operations >>> >>> >>> >>> >>> >>> Other than originally starting with our own personal seed money, >that's >>> >>> what >>> >>> we've done. >>> >>> >>> >>> >>> >>> >>> >>> 2. Have you gone to more traditional forms of money (e.g., bank / SBA >>> >>> / >>> >>> RUS loans)? >>> >>> >>> >>> >>> >>> I could not qualify for any of them. >>> >>> >>> >>> >>> >>> >>> >>> 3. Are you doing more vendor leasing programs (e.g., Motorola 3% >>> >>> financing >>> >>> deal) >>> >>> >>> >>> >>> >>> Never sought any. >>> >>> >>> >>> >>> >>> >>> >>> 4. Have you not been able to borrow money due to the credit crunch >>> >>> (e.g., >>> >>> not deploying as aggressively) >>> >>> >>> >>> >>> >>> My corporation hasn't ever been able to obtain hard money credit. >In >>> >>> fact, the "credit crunch" start last Fall raised my "30+ day past >due" >>> >>> amount from a piddly $1200 to at one time to almost $13,000 in just >>> >>> four >>> >>> months. That almost put us under, and we're still barely scraping >by >>> >>> until >>> >>> our seasonally variable cash flow revives come August, with still >>> >>> several >>> >>> thousand on the books that's very slowly getting chipped away at. >>> >>> >>> >>> >>> >>> >>> >>> 5. Are you holding off on deployments because of the economy >>> >>> >>> >>> >>> >>> No, we're holding off due to lack of cash flow. We have plenty of >>> >>> people >>> >>> waiting for us to build infrastructure out to them. >>> >>> >>> >>> >>> >>> >>> >>> 6. Have you gone to Agility...<cough> Louie the loanshark =) >>> >>> >>> >>> >>> >>> After much discussion, being some of the first people Agility >>> >>> contacted, >>> >>> we >>> >>> have not done any business with them. In my estimation, they wanted >>> >>> control over our business and day to day decisions, which we >concluded >>> >>> was >>> >>> both unwarranted and unwise. >>> >>> >>> >>> >>> >>> >>> >>> Or any other thoughts / comments on this topic? >>> >>> >>> >>> >>> >>> >>> >>> WISP equipment is not really a "commodity" in that there is almost no >>> >>> market >>> >>> for it outside of the "maker-vendor" relationship. Other than Ebay, >>> >>> and a >>> >>> couple of people who attempt to do it piecemeal, there is no "market" >>> >>> which >>> >>> stabilizes the value of used equipment, making them a commodity you >can >>> >>> borrow against. >>> >>> >>> >>> Perhaps it would be more useful, if vendors had the ability to get >>> >>> capital >>> >>> and create stable working and short term credit relationships with >>> >>> their >>> >>> buyers, kind of like the used car market. >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> -Charles >>> >>> >>> >>> >>> >>> --------------------------------------------------------------------- >----------- >>> >>> WISPA Wants You! 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