Re: [AFMUG] Price per sub?

[Chuck McCown]

I adopt the Trump style of argument at times

From: Mike Hammett 
Sent: Thursday, January 12, 2017 3:34 PM
To: af@afmug.com 
Subject: Re: [AFMUG] Price per sub?

Chuck will argue otherwise, but I think few are in his position.




-
Mike Hammett
Intelligent Computing Solutions

Midwest Internet Exchange

The Brothers WISP








From: "Travis Johnson" <t...@ida.net>
To: af@afmug.com
Sent: Thursday, January 12, 2017 11:06:37 AM
Subject: Re: [AFMUG] Price per sub?

Hi,

Not to be picky about terminology, but by definition a "tax" is "a compulsory 
contribution to state revenue, levied by the government on workers' income and 
business profits or added to the cost of some goods, services, and 
transactions."


Isn't this money collected as USF and other "fees" on telephone bills? And 
these are fees that I can NOT remove from my phone bill, so basically it's a 
tax... it's just a telephone tax rather than income or sales tax. Right?

Travis

On 1/12/2017 9:59 AM, Chuck McCown wrote:

  Depending on the area, FCC study area, parent trap rules etc, a rural sub can 
earn up to about $200/month even if they don’t pay their bill or use any 
services.  It used to be more.  If you overearn, your welfare check gets cut, 
but in any case the guaranteed rate of return used to be 11.25%.  And that is 
an ROI after cost recovery of legit expenses.  That is an EBITDA ROR.  Hard to 
pass up a deal like that.  

  But the FCC is deflating that whole program.  They pushed a whole bunch of 
these rural companies into a lucrative A-CAM deal that pays them a fixed amount 
for the next 10 years with the expectation of nothing after that.  For the “buy 
out” they have to agree to upgrade to 25 Mbps service.  

  They did cap executive pay for a while then repealed it, I think it is back 
on.  And for the non A-CAM companies (it was an elective program) they are 
capping investment.  But still, it is around $10K per dwelling.  That may seem 
high, but I have personally had BLM permitting expenses equal $40K per dwelling 
alone with total cost of construction hitting $200K per dwelling.  

  The magic of revenue pooling, no tax dollars are harmed in this scheme...

  From: Ken Hohhof 
  Sent: Thursday, January 12, 2017 9:51 AM
  To: af@afmug.com 
  Subject: Re: [AFMUG] Price per sub?

  Chuck, here’s a question for you.



  I seem to remember checking how much Frontier paid for customers Verizon and 
AT didn’t want, and I think it was around the same $2000/sub number that 
cable companies are typically priced at.  Or maybe it was $1000 and I 
rationalized it in my mind as half of a cable customer because no TV.  Either 
way, it was a lot of money for unwanted customers and decrepit infrastructure.



  Why such a high value?  Why not $1?



  Are they factoring in an expected stream of USF/CAF subsidies as part of the 
value of buying a customer?  Or are they just being stupid?  I assume executive 
pay goes up the bigger the company grows, so maybe perverse incentives.  Look 
at the marvelous Hindenburg we have built, it’s HUGE!







  From: Af [mailto:af-boun...@afmug.com] On Behalf Of Chuck McCown
  Sent: Thursday, January 12, 2017 10:39 AM
  To: af@afmug.com
  Subject: Re: [AFMUG] Price per sub?



  Even if EBITDA is zero year over year, you can look at growth of equity.  If 
the assets are truly worth what they are booked at, then buy for that value.  I 
prefer net present value of future cash flows to be a part of the analysis. 



  But for something that has been a going concern for some time, with little 
debt and equity close to net asset value, multiples of EBITDA are a comfortable 
way to value the thing.  



  However, in a WISP situation where you are buying the customer and some 
amount of SM and AP that may or may not have much value to you, net present 
value may be the way to go.  



  From: Ken Hohhof 

  Sent: Thursday, January 12, 2017 8:39 AM

  To: af@afmug.com 

  Subject: Re: [AFMUG] Price per sub?



  I think there is some validity in getting the revenue and expense numbers 
separately and doing your own analysis.  If you just ask for their net income, 
that will vary greatly based on how the current owners are managing the 
business, I think there are 3 types:



  1)  Being run as a startup

  2)  Being run as a big company / cash cow

  3)  Being groomed for sale



  A 190 sub WISP is probably being run as a startup.  First, that means 
managing cashflow not profit.  Second, that means any time you  have an extra 
dime, you spend it on expanding the business.  If those are capital 
expenditures, maybe they go into depreciation and get excluded from EBITDA.  
But if they go into advertising, subscriber radios, install materials and 
labor, etc., that gets expensed and makes the business look less profitable.



  Whatever year it was that capital gains taxes wen

Re: [AFMUG] Price per sub?

[Mike Hammett]

Chuck will argue otherwise, but I think few are in his position. 




- 
Mike Hammett 
Intelligent Computing Solutions 

Midwest Internet Exchange 

The Brothers WISP 




- Original Message -

From: "Travis Johnson" <t...@ida.net> 
To: af@afmug.com 
Sent: Thursday, January 12, 2017 11:06:37 AM 
Subject: Re: [AFMUG] Price per sub? 

Hi, 

Not to be picky about terminology, but by definition a "tax" is " a compulsory 
contribution to state revenue, levied by the government on workers' income and 
business profits or added to the cost of some goods, services, and 
transactions." 


Isn't this money collected as USF and other "fees" on telephone bills? And 
these are fees that I can NOT remove from my phone bill, so basically it's a 
tax... it's just a telephone tax rather than income or sales tax. Right? 

Travis 

On 1/12/2017 9:59 AM, Chuck McCown wrote: 





Depending on the area, FCC study area, parent trap rules etc, a rural sub can 
earn up to about $200/month even if they don’t pay their bill or use any 
services. It used to be more. If you overearn, your welfare check gets cut, but 
in any case the guaranteed rate of return used to be 11.25%. And that is an ROI 
after cost recovery of legit expenses. That is an EBITDA ROR. Hard to pass up a 
deal like that. 

But the FCC is deflating that whole program. They pushed a whole bunch of these 
rural companies into a lucrative A-CAM deal that pays them a fixed amount for 
the next 10 years with the expectation of nothing after that. For the “buy out” 
they have to agree to upgrade to 25 Mbps service. 

They did cap executive pay for a while then repealed it, I think it is back on. 
And for the non A-CAM companies (it was an elective program) they are capping 
investment. But still, it is around $10K per dwelling. That may seem high, but 
I have personally had BLM permitting expenses equal $40K per dwelling alone 
with total cost of construction hitting $200K per dwelling. 

The magic of revenue pooling, no tax dollars are harmed in this scheme... 




From: Ken Hohhof 
Sent: Thursday, January 12, 2017 9:51 AM 
To: af@afmug.com 
Subject: Re: [AFMUG] Price per sub? 



Chuck, here’s a question for you. 

I seem to remember checking how much Frontier paid for customers Verizon and 
AT didn’t want, and I think it was around the same $2000/sub number that 
cable companies are typically priced at. Or maybe it was $1000 and I 
rationalized it in my mind as half of a cable customer because no TV. Either 
way, it was a lot of money for unwanted customers and decrepit infrastructure. 

Why such a high value? Why not $1? 

Are they factoring in an expected stream of USF/CAF subsidies as part of the 
value of buying a customer? Or are they just being stupid? I assume executive 
pay goes up the bigger the company grows, so maybe perverse incentives. Look at 
the marvelous Hindenburg we have built, it’s HUGE! 





From: Af [ mailto:af-boun...@afmug.com ] On Behalf Of Chuck McCown 
Sent: Thursday, January 12, 2017 10:39 AM 
To: af@afmug.com 
Subject: Re: [AFMUG] Price per sub? 




Even if EBITDA is zero year over year, you can look at growth of equity. If the 
assets are truly worth what they are booked at, then buy for that value. I 
prefer net present value of future cash flows to be a part of the analysis. 



But for something that has been a going concern for some time, with little debt 
and equity close to net asset value, multiples of EBITDA are a comfortable way 
to value the thing. 



However, in a WISP situation where you are buying the customer and some amount 
of SM and AP that may or may not have much value to you, net present value may 
be the way to go. 






From: Ken Hohhof 

Sent: Thursday, January 12, 2017 8:39 AM 

To: af@afmug.com 

Subject: Re: [AFMUG] Price per sub? 



I think there is some validity in getting the revenue and expense numbers 
separately and doing your own analysis. If you just ask for their net income, 
that will vary greatly based on how the current owners are managing the 
business, I think there are 3 types: 

1) Being run as a startup 
2) Being run as a big company / cash cow 
3) Being groomed for sale 

A 190 sub WISP is probably being run as a startup. First, that means managing 
cashflow not profit. Second, that means any time you have an extra dime, you 
spend it on expanding the business. If those are capital expenditures, maybe 
they go into depreciation and get excluded from EBITDA. But if they go into 
advertising, subscriber radios, install materials and labor, etc., that gets 
expensed and makes the business look less profitable. 

Whatever year it was that capital gains taxes went back up, I heard a tutorial 
on how to groom your business for sale before the deadline. Basically you stop 
focusing on increasing revenue, and instead cut costs, it will immediately 
improve your EBITDA and therefore your valuation. I think we’ve all experienced 
this wh

Re: [AFMUG] Price per sub?

[Chuck McCown]

High penetration rate for a small WISP would not necessarily make it more value 
to me as a potential purchase.  No room to grow.  

From: Brian Webster 
Sent: Thursday, January 12, 2017 2:41 PM
To: af@afmug.com 
Subject: Re: [AFMUG] Price per sub?

That is why I brought that point up. Most states have broadband adoption rates 
between 74 and 77 percent of the homes passed. That is the adoption rate for 
all broadband providers combined not any one carrier. Some higher adoption 
rates reach 80% and as Chuck mentioned in their particular neighborhoods they 
have achieved 84% which is not surprising if you are the first carrier in AND 
offer fiber. Their claim of 90% as one carrier in the face of competition is 
suspect as to what they think penetration is to them. I suspect it is the 
percentage of leads that come in to them and they close and make that lead a 
paying customer. 

 

Knowing the total potential homes passed and comparing that to the number of 
subscribers will tell you the WISP’s market penetration rate. Look at the other 
competitors in that same area and asses what may be potential for subscriber 
growth using the existing infrastructure. It would also be crucial to assess 
the potential for the sites to add dedicated PTP radios and be able to sell 
dedicated enterprise business connections. Many WISP’s are finding that as a 
tremendous growth market without having to do a large footprint expansion, and 
these customers are much higher revenue with less customer support 
requirements. It’s a different business model and sales mentality but for many 
WISP’s it’s a fairly easy overlay on their existing market area. If the WISP 
does not already have a coverage map created you should have one done so that 
you can see the true market potential and be able to calculate the homes 
passed. It is good to look at that potential compared to the competitive 
broadband providers and also look at where there may be overlap to your 
network. No sense paying for something you already can cover.

 

Thank You,

Brian Webster

www.wirelessmapping.com

www.Broadband-Mapping.com

 

From: Af [mailto:af-boun...@afmug.com] On Behalf Of Ken Hohhof
Sent: Thursday, January 12, 2017 11:34 AM
To: af@afmug.com
Subject: Re: [AFMUG] Price per sub?

 

I am confused when he says they have 90% “take rate” yet there is another WISP 
competitor in the area.  I assume there are also people with Hughesnet, Exede, 
mobile hotspots, and Luddites with no Internet.  Perhaps he means something 
other than they have 90% of households in the coverage area as customers.

 

I can understand with a $20 plan they could sweep up even the people who could 
almost use dialup.  Still 90% market penetration in the face of competition 
seems amazing.  I’m guessing 10% of households in my area don’t have any kind 
of fixed Internet, either because they don’t need no stinkin’ Internet, or 
because they just use the data plan on their smartphone.

 

 

From: Af [mailto:af-boun...@afmug.com] On Behalf Of Chuck McCown
Sent: Thursday, January 12, 2017 10:15 AM
To: af@afmug.com
Subject: Re: [AFMUG] Price per sub?

 

We see the asymptote converging on about 84% in our FTTH neighborhoods.   

 

From: Brian Webster 

Sent: Wednesday, January 11, 2017 7:36 PM

To: af@afmug.com 

Subject: Re: [AFMUG] Price per sub?

 

A couple of things that seem to always come up in these deals. One, what future 
revenue has already been taken by the current owners. What I mean by that are 
prepaid annual contracts, side deals on site rent in exchange for relay sites, 
stuff like that.

 

Second, is the owners tend to want you to buy their potential. When you say 90% 
take rate you should dig in to those numbers. The highest adoption rate in 
America are only about 80% of households passed. Are they saying 90% take rate 
on leads that come in? How many homes does their network potentially cover vs. 
number of subscribers. How much competition is there for those homes. What 
equipment do they have deployed, signal levels and client distances? This will 
have a big effect on your ability to upsell bandwidth. If the clients are all 
marginal connections you will not have the ability to deliver much capacity off 
the sectors if you want to upsell or if customer want more bandwidth. This 
means upgrades at your own cost. 

 

Third, look very carefully at tower site leases or agreements. Are there any? 
Do they allow for a transfer of ownership and stay in effect? Are there balloon 
rent increases that would change your forecasts? Do they have renewal terms 
that are long enough for you to make your money on the purchase of their 
company? Large company or small being purchased the tower site agreements are 
one very important thing to dig deep on the details.

 

 

Thank You,

Brian Webster

www.wirelessmapping.com

www.Broadband-Mapping.com

 

From: Af [mailto:af-boun...@afmug.com] On Behalf Of Mike Hammett
Sent: Wednesday, January 11, 2017 9:08 PM
To: af

Re: [AFMUG] Price per sub?

[Brian Webster]

That is why I brought that point up. Most states have broadband adoption rates 
between 74 and 77 percent of the homes passed. That is the adoption rate for 
all broadband providers combined not any one carrier. Some higher adoption 
rates reach 80% and as Chuck mentioned in their particular neighborhoods they 
have achieved 84% which is not surprising if you are the first carrier in AND 
offer fiber. Their claim of 90% as one carrier in the face of competition is 
suspect as to what they think penetration is to them. I suspect it is the 
percentage of leads that come in to them and they close and make that lead a 
paying customer. 

 

Knowing the total potential homes passed and comparing that to the number of 
subscribers will tell you the WISP’s market penetration rate. Look at the other 
competitors in that same area and asses what may be potential for subscriber 
growth using the existing infrastructure. It would also be crucial to assess 
the potential for the sites to add dedicated PTP radios and be able to sell 
dedicated enterprise business connections. Many WISP’s are finding that as a 
tremendous growth market without having to do a large footprint expansion, and 
these customers are much higher revenue with less customer support 
requirements. It’s a different business model and sales mentality but for many 
WISP’s it’s a fairly easy overlay on their existing market area. If the WISP 
does not already have a coverage map created you should have one done so that 
you can see the true market potential and be able to calculate the homes 
passed. It is good to look at that potential compared to the competitive 
broadband providers and also look at where there may be overlap to your 
network. No sense paying for something you already can cover.

 

Thank You,

Brian Webster

www.wirelessmapping.com

www.Broadband-Mapping.com

 

From: Af [mailto:af-boun...@afmug.com] On Behalf Of Ken Hohhof
Sent: Thursday, January 12, 2017 11:34 AM
To: af@afmug.com
Subject: Re: [AFMUG] Price per sub?

 

I am confused when he says they have 90% “take rate” yet there is another WISP 
competitor in the area.  I assume there are also people with Hughesnet, Exede, 
mobile hotspots, and Luddites with no Internet.  Perhaps he means something 
other than they have 90% of households in the coverage area as customers.

 

I can understand with a $20 plan they could sweep up even the people who could 
almost use dialup.  Still 90% market penetration in the face of competition 
seems amazing.  I’m guessing 10% of households in my area don’t have any kind 
of fixed Internet, either because they don’t need no stinkin’ Internet, or 
because they just use the data plan on their smartphone.

 

 

From: Af [mailto:af-boun...@afmug.com] On Behalf Of Chuck McCown
Sent: Thursday, January 12, 2017 10:15 AM
To: af@afmug.com
Subject: Re: [AFMUG] Price per sub?

 

We see the asymptote converging on about 84% in our FTTH neighborhoods.   

 

From: Brian Webster 

Sent: Wednesday, January 11, 2017 7:36 PM

To: af@afmug.com 

Subject: Re: [AFMUG] Price per sub?

 

A couple of things that seem to always come up in these deals. One, what future 
revenue has already been taken by the current owners. What I mean by that are 
prepaid annual contracts, side deals on site rent in exchange for relay sites, 
stuff like that.

 

Second, is the owners tend to want you to buy their potential. When you say 90% 
take rate you should dig in to those numbers. The highest adoption rate in 
America are only about 80% of households passed. Are they saying 90% take rate 
on leads that come in? How many homes does their network potentially cover vs. 
number of subscribers. How much competition is there for those homes. What 
equipment do they have deployed, signal levels and client distances? This will 
have a big effect on your ability to upsell bandwidth. If the clients are all 
marginal connections you will not have the ability to deliver much capacity off 
the sectors if you want to upsell or if customer want more bandwidth. This 
means upgrades at your own cost. 

 

Third, look very carefully at tower site leases or agreements. Are there any? 
Do they allow for a transfer of ownership and stay in effect? Are there balloon 
rent increases that would change your forecasts? Do they have renewal terms 
that are long enough for you to make your money on the purchase of their 
company? Large company or small being purchased the tower site agreements are 
one very important thing to dig deep on the details.

 

 

Thank You,

Brian Webster

www.wirelessmapping.com

www.Broadband-Mapping.com

 

From: Af [mailto:af-boun...@afmug.com] On Behalf Of Mike Hammett
Sent: Wednesday, January 11, 2017 9:08 PM
To: af@afmug.com
Subject: Re: [AFMUG] Price per sub?

 

I hear that is around 12x - 18x months of revenue and a heck of a lot easier to 
calculate when ballparking. They know their revenue (or well, is somewhat easy 
to figure out). They probably can't spell

Re: [AFMUG] Price per sub?

[Ken Hohhof]

CAF is just a new mission for the same money, it is paid for with USF 
“contributions”.  More like same beast, two different heads.

https://www.fcc.gov/general/connect-america-fund-caf

 

Similarly, the Wheeler FCC decided to expand Lifeline phone subsidies to also 
cover broadband (ignoring that $9 doesn’t buy much of a phone+data bundle).  
But it comes from the Universal Service (slush) Fund.

 

 

From: Af [mailto:af-boun...@afmug.com] On Behalf Of Chuck McCown
Sent: Thursday, January 12, 2017 12:16 PM
To: af@afmug.com
Subject: Re: [AFMUG] Price per sub?

 

Yes CAF.

CAF is not USF.  Two totally different beasts.  

 

From: Ken Hohhof 

Sent: Thursday, January 12, 2017 11:14 AM

To: af@afmug.com <mailto:af@afmug.com>  

Subject: Re: [AFMUG] Price per sub?

 

http://www.telecompetitor.com/massachusetts-joins-effort-urging-the-fcc-to-release-connect-america-funding-to-states/

 

 

From: Af [mailto:af-boun...@afmug.com] On Behalf Of Chuck McCown
Sent: Thursday, January 12, 2017 11:51 AM
To: af@afmug.com <mailto:af@afmug.com> 
Subject: Re: [AFMUG] Price per sub?

 

Some states have a state USF and it is handled differently, sometimes with 
strings attached.  I don’t think telcos turn down federal USF.  

 

Some do turn down CAF and some states want CAF.  CAF is tax dollar based.  And 
CAF is not related to divestiture.  It is an invention of the Obama 
administration.  

 

CAF != USF by any stretch.  

 

And there is a push in all states to make ISPs fund the USF right along with 
cell phone carriers and everyone else.  

 

From: Ken Hohhof 

Sent: Thursday, January 12, 2017 10:46 AM

To: af@afmug.com <mailto:af@afmug.com>  

Subject: Re: [AFMUG] Price per sub?

 

But now you see states (I think Massachusetts is the latest) want to receive 
the USF money their telcos have turned down.  Why is there no sunset on this 
“fee”?  I think USF “contributions” have doubled in recent years?  Why not just 
let the percentage go back down, if the telcos don’t want the money.

 

I think because of not calling it a tax, even though it walks and quacks like a 
tax.  If it was called a tax, the public and all fiscal conservative 
legislators would be all over it, to have it reduced or eliminated.

 

It’s like the March of Dimes, we need to reinvent ourselves, polio was 
eliminated, but we still have all these dimes coming in!

 

Plus I take issue with your historical analysis, nothing about LD revenue and 
breaking up the Bell System justifies the repurposing of this money to the 
“Connect America Fund”.

 

Let’s face it, POTS is a relic, and the concept of LD vs local calling is a 
relic.  People are switching to cellphones and that isn’t going to change.  All 
government programs need a sunset provision, where their original reason for 
existence has to be re-examined and justified anew.

 

The real day of reckoning will come when the “contribution base” from 
interstate voice no longer funds CAF, and they want to make ISPs start 
contributing on their broadband revenue.  You’re internet bill now has a new 
17% fee!  Will these unelected agencies be able to say nothing to see here, 
it’s just a fee, move along?  Or will Congress have to authorize it?  And if 
so, will they have to treat it as a tax and therefore the third rail especially 
with Republicans controlling both houses of Congress and a Republican? In the 
White House?  Not sure what DJT would think of it.  Populists traditionally 
favor bread and circuses, and don’t worry as much about deficit spending as 
Republicans supposedly do.  New taxes would still seem counterintuitive.

 

 

From: Af [mailto:af-boun...@afmug.com] On Behalf Of Chuck McCown
Sent: Thursday, January 12, 2017 11:18 AM
To: af@afmug.com <mailto:af@afmug.com> 
Subject: Re: [AFMUG] Price per sub?

 

No, it is a replacement for revenue previously obtained from AT on line-haul 
agreements.  As a consideration for the divestiture and forcing AT to allow 
others to enter the long distance arena, the revenue previously shared with the 
smaller non AT companies was diverted to the National Exchange Carriers 
Association, NECA for distribution in a socialist manner.  

 

And everyone’s long distance bills went way way down.   Then when the 96 act 
happened and CLECS were allowed to enter the local exchange market similar how 
the LD companies were allowed after divestiture, USAC was invented to move some 
of the local exchange tariff revenue into another pool to replace money that 
local exchange carriers would lose when CLECs stole their customers.  

 

So, LD revenue and local revenue were moved to pools to allow competition.  
NECA administers one pool of revenue, USAC the other.  Neither is the 
government.  And contributions are non compulsory on the customers however most 
pass the fees along, however some do not.  NECA and USAC are simply two not for 
profit companies that have been designated by the FCC to distribute the dole.  

 

I re

Re: [AFMUG] Price per sub?

[Chuck McCown]

Yes CAF.
CAF is not USF.  Two totally different beasts.  

From: Ken Hohhof 
Sent: Thursday, January 12, 2017 11:14 AM
To: af@afmug.com 
Subject: Re: [AFMUG] Price per sub?

http://www.telecompetitor.com/massachusetts-joins-effort-urging-the-fcc-to-release-connect-america-funding-to-states/

 

 

From: Af [mailto:af-boun...@afmug.com] On Behalf Of Chuck McCown
Sent: Thursday, January 12, 2017 11:51 AM
To: af@afmug.com
Subject: Re: [AFMUG] Price per sub?

 

Some states have a state USF and it is handled differently, sometimes with 
strings attached.  I don’t think telcos turn down federal USF.  

 

Some do turn down CAF and some states want CAF.  CAF is tax dollar based.  And 
CAF is not related to divestiture.  It is an invention of the Obama 
administration.  

 

CAF != USF by any stretch.  

 

And there is a push in all states to make ISPs fund the USF right along with 
cell phone carriers and everyone else.  

 

From: Ken Hohhof 

Sent: Thursday, January 12, 2017 10:46 AM

To: af@afmug.com 

Subject: Re: [AFMUG] Price per sub?

 

But now you see states (I think Massachusetts is the latest) want to receive 
the USF money their telcos have turned down.  Why is there no sunset on this 
“fee”?  I think USF “contributions” have doubled in recent years?  Why not just 
let the percentage go back down, if the telcos don’t want the money.

 

I think because of not calling it a tax, even though it walks and quacks like a 
tax.  If it was called a tax, the public and all fiscal conservative 
legislators would be all over it, to have it reduced or eliminated.

 

It’s like the March of Dimes, we need to reinvent ourselves, polio was 
eliminated, but we still have all these dimes coming in!

 

Plus I take issue with your historical analysis, nothing about LD revenue and 
breaking up the Bell System justifies the repurposing of this money to the 
“Connect America Fund”.

 

Let’s face it, POTS is a relic, and the concept of LD vs local calling is a 
relic.  People are switching to cellphones and that isn’t going to change.  All 
government programs need a sunset provision, where their original reason for 
existence has to be re-examined and justified anew.

 

The real day of reckoning will come when the “contribution base” from 
interstate voice no longer funds CAF, and they want to make ISPs start 
contributing on their broadband revenue.  You’re internet bill now has a new 
17% fee!  Will these unelected agencies be able to say nothing to see here, 
it’s just a fee, move along?  Or will Congress have to authorize it?  And if 
so, will they have to treat it as a tax and therefore the third rail especially 
with Republicans controlling both houses of Congress and a Republican? In the 
White House?  Not sure what DJT would think of it.  Populists traditionally 
favor bread and circuses, and don’t worry as much about deficit spending as 
Republicans supposedly do.  New taxes would still seem counterintuitive.

 

 

From: Af [mailto:af-boun...@afmug.com] On Behalf Of Chuck McCown
Sent: Thursday, January 12, 2017 11:18 AM
To: af@afmug.com
Subject: Re: [AFMUG] Price per sub?

 

No, it is a replacement for revenue previously obtained from AT on line-haul 
agreements.  As a consideration for the divestiture and forcing AT to allow 
others to enter the long distance arena, the revenue previously shared with the 
smaller non AT companies was diverted to the National Exchange Carriers 
Association, NECA for distribution in a socialist manner.  

 

And everyone’s long distance bills went way way down.   Then when the 96 act 
happened and CLECS were allowed to enter the local exchange market similar how 
the LD companies were allowed after divestiture, USAC was invented to move some 
of the local exchange tariff revenue into another pool to replace money that 
local exchange carriers would lose when CLECs stole their customers.  

 

So, LD revenue and local revenue were moved to pools to allow competition.  
NECA administers one pool of revenue, USAC the other.  Neither is the 
government.  And contributions are non compulsory on the customers however most 
pass the fees along, however some do not.  NECA and USAC are simply two not for 
profit companies that have been designated by the FCC to distribute the dole.  

 

I remember when a phone call to the next town over , 13 miles away, was 15 
cents per minute during the day.  Anyone want to go back to that?

 

You do not have to use a phone.   

You do not have to water ski at Lake Powell, so the National Park Service fee 
to enter the area is a fee, not a tax.  

 

From: Travis Johnson 

Sent: Thursday, January 12, 2017 10:06 AM

To: af@afmug.com 

Subject: Re: [AFMUG] Price per sub?

 

Hi,

Not to be picky about terminology, but by definition a "tax" is "a compulsory 
contribution to state revenue, levied by the government on workers' income and 
business profits or added to the cost of some goods, services, and 
transactions."

Isn't 

Re: [AFMUG] Price per sub?

[Ken Hohhof]

http://www.telecompetitor.com/massachusetts-joins-effort-urging-the-fcc-to-release-connect-america-funding-to-states/

 

 

From: Af [mailto:af-boun...@afmug.com] On Behalf Of Chuck McCown
Sent: Thursday, January 12, 2017 11:51 AM
To: af@afmug.com
Subject: Re: [AFMUG] Price per sub?

 

Some states have a state USF and it is handled differently, sometimes with 
strings attached.  I don’t think telcos turn down federal USF.  

 

Some do turn down CAF and some states want CAF.  CAF is tax dollar based.  And 
CAF is not related to divestiture.  It is an invention of the Obama 
administration.  

 

CAF != USF by any stretch.  

 

And there is a push in all states to make ISPs fund the USF right along with 
cell phone carriers and everyone else.  

 

From: Ken Hohhof 

Sent: Thursday, January 12, 2017 10:46 AM

To: af@afmug.com <mailto:af@afmug.com>  

Subject: Re: [AFMUG] Price per sub?

 

But now you see states (I think Massachusetts is the latest) want to receive 
the USF money their telcos have turned down.  Why is there no sunset on this 
“fee”?  I think USF “contributions” have doubled in recent years?  Why not just 
let the percentage go back down, if the telcos don’t want the money.

 

I think because of not calling it a tax, even though it walks and quacks like a 
tax.  If it was called a tax, the public and all fiscal conservative 
legislators would be all over it, to have it reduced or eliminated.

 

It’s like the March of Dimes, we need to reinvent ourselves, polio was 
eliminated, but we still have all these dimes coming in!

 

Plus I take issue with your historical analysis, nothing about LD revenue and 
breaking up the Bell System justifies the repurposing of this money to the 
“Connect America Fund”.

 

Let’s face it, POTS is a relic, and the concept of LD vs local calling is a 
relic.  People are switching to cellphones and that isn’t going to change.  All 
government programs need a sunset provision, where their original reason for 
existence has to be re-examined and justified anew.

 

The real day of reckoning will come when the “contribution base” from 
interstate voice no longer funds CAF, and they want to make ISPs start 
contributing on their broadband revenue.  You’re internet bill now has a new 
17% fee!  Will these unelected agencies be able to say nothing to see here, 
it’s just a fee, move along?  Or will Congress have to authorize it?  And if 
so, will they have to treat it as a tax and therefore the third rail especially 
with Republicans controlling both houses of Congress and a Republican? In the 
White House?  Not sure what DJT would think of it.  Populists traditionally 
favor bread and circuses, and don’t worry as much about deficit spending as 
Republicans supposedly do.  New taxes would still seem counterintuitive.

 

 

From: Af [mailto:af-boun...@afmug.com] On Behalf Of Chuck McCown
Sent: Thursday, January 12, 2017 11:18 AM
To: af@afmug.com <mailto:af@afmug.com> 
Subject: Re: [AFMUG] Price per sub?

 

No, it is a replacement for revenue previously obtained from AT on line-haul 
agreements.  As a consideration for the divestiture and forcing AT to allow 
others to enter the long distance arena, the revenue previously shared with the 
smaller non AT companies was diverted to the National Exchange Carriers 
Association, NECA for distribution in a socialist manner.  

 

And everyone’s long distance bills went way way down.   Then when the 96 act 
happened and CLECS were allowed to enter the local exchange market similar how 
the LD companies were allowed after divestiture, USAC was invented to move some 
of the local exchange tariff revenue into another pool to replace money that 
local exchange carriers would lose when CLECs stole their customers.  

 

So, LD revenue and local revenue were moved to pools to allow competition.  
NECA administers one pool of revenue, USAC the other.  Neither is the 
government.  And contributions are non compulsory on the customers however most 
pass the fees along, however some do not.  NECA and USAC are simply two not for 
profit companies that have been designated by the FCC to distribute the dole.  

 

I remember when a phone call to the next town over , 13 miles away, was 15 
cents per minute during the day.  Anyone want to go back to that?

 

You do not have to use a phone.   

You do not have to water ski at Lake Powell, so the National Park Service fee 
to enter the area is a fee, not a tax.  

 

From: Travis Johnson 

Sent: Thursday, January 12, 2017 10:06 AM

To: af@afmug.com <mailto:af@afmug.com>  

Subject: Re: [AFMUG] Price per sub?

 

Hi,

Not to be picky about terminology, but by definition a "tax" is "a compulsory 
contribution to state revenue, levied by the government on workers' income and 
business profits or added to the cost of some goods, services, and 
transactions."

Isn't this money collected as USF and other "fees" on telephone bills? And 
these a

Re: [AFMUG] Price per sub?

[Chuck McCown]

Some states have a state USF and it is handled differently, sometimes with 
strings attached.  I don’t think telcos turn down federal USF.  

Some do turn down CAF and some states want CAF.  CAF is tax dollar based.  And 
CAF is not related to divestiture.  It is an invention of the Obama 
administration.  

CAF != USF by any stretch.  

And there is a push in all states to make ISPs fund the USF right along with 
cell phone carriers and everyone else.  

From: Ken Hohhof 
Sent: Thursday, January 12, 2017 10:46 AM
To: af@afmug.com 
Subject: Re: [AFMUG] Price per sub?

But now you see states (I think Massachusetts is the latest) want to receive 
the USF money their telcos have turned down.  Why is there no sunset on this 
“fee”?  I think USF “contributions” have doubled in recent years?  Why not just 
let the percentage go back down, if the telcos don’t want the money.

 

I think because of not calling it a tax, even though it walks and quacks like a 
tax.  If it was called a tax, the public and all fiscal conservative 
legislators would be all over it, to have it reduced or eliminated.

 

It’s like the March of Dimes, we need to reinvent ourselves, polio was 
eliminated, but we still have all these dimes coming in!

 

Plus I take issue with your historical analysis, nothing about LD revenue and 
breaking up the Bell System justifies the repurposing of this money to the 
“Connect America Fund”.

 

Let’s face it, POTS is a relic, and the concept of LD vs local calling is a 
relic.  People are switching to cellphones and that isn’t going to change.  All 
government programs need a sunset provision, where their original reason for 
existence has to be re-examined and justified anew.

 

The real day of reckoning will come when the “contribution base” from 
interstate voice no longer funds CAF, and they want to make ISPs start 
contributing on their broadband revenue.  You’re internet bill now has a new 
17% fee!  Will these unelected agencies be able to say nothing to see here, 
it’s just a fee, move along?  Or will Congress have to authorize it?  And if 
so, will they have to treat it as a tax and therefore the third rail especially 
with Republicans controlling both houses of Congress and a Republican? In the 
White House?  Not sure what DJT would think of it.  Populists traditionally 
favor bread and circuses, and don’t worry as much about deficit spending as 
Republicans supposedly do.  New taxes would still seem counterintuitive.

 

 

From: Af [mailto:af-boun...@afmug.com] On Behalf Of Chuck McCown
Sent: Thursday, January 12, 2017 11:18 AM
To: af@afmug.com
Subject: Re: [AFMUG] Price per sub?

 

No, it is a replacement for revenue previously obtained from AT on line-haul 
agreements.  As a consideration for the divestiture and forcing AT to allow 
others to enter the long distance arena, the revenue previously shared with the 
smaller non AT companies was diverted to the National Exchange Carriers 
Association, NECA for distribution in a socialist manner.  

 

And everyone’s long distance bills went way way down.   Then when the 96 act 
happened and CLECS were allowed to enter the local exchange market similar how 
the LD companies were allowed after divestiture, USAC was invented to move some 
of the local exchange tariff revenue into another pool to replace money that 
local exchange carriers would lose when CLECs stole their customers.  

 

So, LD revenue and local revenue were moved to pools to allow competition.  
NECA administers one pool of revenue, USAC the other.  Neither is the 
government.  And contributions are non compulsory on the customers however most 
pass the fees along, however some do not.  NECA and USAC are simply two not for 
profit companies that have been designated by the FCC to distribute the dole.  

 

I remember when a phone call to the next town over , 13 miles away, was 15 
cents per minute during the day.  Anyone want to go back to that?

 

You do not have to use a phone.   

You do not have to water ski at Lake Powell, so the National Park Service fee 
to enter the area is a fee, not a tax.  

 

From: Travis Johnson 

Sent: Thursday, January 12, 2017 10:06 AM

To: af@afmug.com 

Subject: Re: [AFMUG] Price per sub?

 

Hi,

Not to be picky about terminology, but by definition a "tax" is "a compulsory 
contribution to state revenue, levied by the government on workers' income and 
business profits or added to the cost of some goods, services, and 
transactions."

Isn't this money collected as USF and other "fees" on telephone bills? And 
these are fees that I can NOT remove from my phone bill, so basically it's a 
tax... it's just a telephone tax rather than income or sales tax. Right?

Travis

On 1/12/2017 9:59 AM, Chuck McCown wrote:

  Depending on the area, FCC study area, parent trap rules etc, a rural sub can 
earn up to about $200/month even if they don’t pay their bill or use any 
services.  It used to be more.  If you overear

Re: [AFMUG] Price per sub?

[Ken Hohhof]

But now you see states (I think Massachusetts is the latest) want to receive 
the USF money their telcos have turned down.  Why is there no sunset on this 
“fee”?  I think USF “contributions” have doubled in recent years?  Why not just 
let the percentage go back down, if the telcos don’t want the money.

 

I think because of not calling it a tax, even though it walks and quacks like a 
tax.  If it was called a tax, the public and all fiscal conservative 
legislators would be all over it, to have it reduced or eliminated.

 

It’s like the March of Dimes, we need to reinvent ourselves, polio was 
eliminated, but we still have all these dimes coming in!

 

Plus I take issue with your historical analysis, nothing about LD revenue and 
breaking up the Bell System justifies the repurposing of this money to the 
“Connect America Fund”.

 

Let’s face it, POTS is a relic, and the concept of LD vs local calling is a 
relic.  People are switching to cellphones and that isn’t going to change.  All 
government programs need a sunset provision, where their original reason for 
existence has to be re-examined and justified anew.

 

The real day of reckoning will come when the “contribution base” from 
interstate voice no longer funds CAF, and they want to make ISPs start 
contributing on their broadband revenue.  You’re internet bill now has a new 
17% fee!  Will these unelected agencies be able to say nothing to see here, 
it’s just a fee, move along?  Or will Congress have to authorize it?  And if 
so, will they have to treat it as a tax and therefore the third rail especially 
with Republicans controlling both houses of Congress and a Republican? In the 
White House?  Not sure what DJT would think of it.  Populists traditionally 
favor bread and circuses, and don’t worry as much about deficit spending as 
Republicans supposedly do.  New taxes would still seem counterintuitive.

 

 

From: Af [mailto:af-boun...@afmug.com] On Behalf Of Chuck McCown
Sent: Thursday, January 12, 2017 11:18 AM
To: af@afmug.com
Subject: Re: [AFMUG] Price per sub?

 

No, it is a replacement for revenue previously obtained from AT on line-haul 
agreements.  As a consideration for the divestiture and forcing AT to allow 
others to enter the long distance arena, the revenue previously shared with the 
smaller non AT companies was diverted to the National Exchange Carriers 
Association, NECA for distribution in a socialist manner.  

 

And everyone’s long distance bills went way way down.   Then when the 96 act 
happened and CLECS were allowed to enter the local exchange market similar how 
the LD companies were allowed after divestiture, USAC was invented to move some 
of the local exchange tariff revenue into another pool to replace money that 
local exchange carriers would lose when CLECs stole their customers.  

 

So, LD revenue and local revenue were moved to pools to allow competition.  
NECA administers one pool of revenue, USAC the other.  Neither is the 
government.  And contributions are non compulsory on the customers however most 
pass the fees along, however some do not.  NECA and USAC are simply two not for 
profit companies that have been designated by the FCC to distribute the dole.  

 

I remember when a phone call to the next town over , 13 miles away, was 15 
cents per minute during the day.  Anyone want to go back to that?

 

You do not have to use a phone.   

You do not have to water ski at Lake Powell, so the National Park Service fee 
to enter the area is a fee, not a tax.  

 

From: Travis Johnson 

Sent: Thursday, January 12, 2017 10:06 AM

To: af@afmug.com 

Subject: Re: [AFMUG] Price per sub?

 

Hi,

Not to be picky about terminology, but by definition a "tax" is "a compulsory 
contribution to state revenue, levied by the government on workers' income and 
business profits or added to the cost of some goods, services, and 
transactions."

Isn't this money collected as USF and other "fees" on telephone bills? And 
these are fees that I can NOT remove from my phone bill, so basically it's a 
tax... it's just a telephone tax rather than income or sales tax. Right?

Travis

On 1/12/2017 9:59 AM, Chuck McCown wrote:

Depending on the area, FCC study area, parent trap rules etc, a rural sub can 
earn up to about $200/month even if they don’t pay their bill or use any 
services.  It used to be more.  If you overearn, your welfare check gets cut, 
but in any case the guaranteed rate of return used to be 11.25%.  And that is 
an ROI after cost recovery of legit expenses.  That is an EBITDA ROR.  Hard to 
pass up a deal like that.  

 

But the FCC is deflating that whole program.  They pushed a whole bunch of 
these rural companies into a lucrative A-CAM deal that pays them a fixed amount 
for the next 10 years with the expectation of nothing after that.  For the “buy 
out” they have to agree to upgrade to 25 Mbps service.  

 

They did cap executive pay for a while then r

Re: [AFMUG] Price per sub?

[Chuck McCown]

No, it is a replacement for revenue previously obtained from AT on line-haul 
agreements.  As a consideration for the divestiture and forcing AT to allow 
others to enter the long distance arena, the revenue previously shared with the 
smaller non AT companies was diverted to the National Exchange Carriers 
Association, NECA for distribution in a socialist manner.  

And everyone’s long distance bills went way way down.   Then when the 96 act 
happened and CLECS were allowed to enter the local exchange market similar how 
the LD companies were allowed after divestiture, USAC was invented to move some 
of the local exchange tariff revenue into another pool to replace money that 
local exchange carriers would lose when CLECs stole their customers.  

So, LD revenue and local revenue were moved to pools to allow competition.  
NECA administers one pool of revenue, USAC the other.  Neither is the 
government.  And contributions are non compulsory on the customers however most 
pass the fees along, however some do not.  NECA and USAC are simply two not for 
profit companies that have been designated by the FCC to distribute the dole.  

I remember when a phone call to the next town over , 13 miles away, was 15 
cents per minute during the day.  Anyone want to go back to that?

You do not have to use a phone.   
You do not have to water ski at Lake Powell, so the National Park Service fee 
to enter the area is a fee, not a tax.  

From: Travis Johnson 
Sent: Thursday, January 12, 2017 10:06 AM
To: af@afmug.com 
Subject: Re: [AFMUG] Price per sub?

Hi,

Not to be picky about terminology, but by definition a "tax" is "a compulsory 
contribution to state revenue, levied by the government on workers' income and 
business profits or added to the cost of some goods, services, and 
transactions."


Isn't this money collected as USF and other "fees" on telephone bills? And 
these are fees that I can NOT remove from my phone bill, so basically it's a 
tax... it's just a telephone tax rather than income or sales tax. Right?

Travis

On 1/12/2017 9:59 AM, Chuck McCown wrote:

  Depending on the area, FCC study area, parent trap rules etc, a rural sub can 
earn up to about $200/month even if they don’t pay their bill or use any 
services.  It used to be more.  If you overearn, your welfare check gets cut, 
but in any case the guaranteed rate of return used to be 11.25%.  And that is 
an ROI after cost recovery of legit expenses.  That is an EBITDA ROR.  Hard to 
pass up a deal like that.  

  But the FCC is deflating that whole program.  They pushed a whole bunch of 
these rural companies into a lucrative A-CAM deal that pays them a fixed amount 
for the next 10 years with the expectation of nothing after that.  For the “buy 
out” they have to agree to upgrade to 25 Mbps service.  

  They did cap executive pay for a while then repealed it, I think it is back 
on.  And for the non A-CAM companies (it was an elective program) they are 
capping investment.  But still, it is around $10K per dwelling.  That may seem 
high, but I have personally had BLM permitting expenses equal $40K per dwelling 
alone with total cost of construction hitting $200K per dwelling.  

  The magic of revenue pooling, no tax dollars are harmed in this scheme...

  From: Ken Hohhof 
  Sent: Thursday, January 12, 2017 9:51 AM
  To: af@afmug.com 
  Subject: Re: [AFMUG] Price per sub?

  Chuck, here’s a question for you.

   

  I seem to remember checking how much Frontier paid for customers Verizon and 
AT didn’t want, and I think it was around the same $2000/sub number that 
cable companies are typically priced at.  Or maybe it was $1000 and I 
rationalized it in my mind as half of a cable customer because no TV.  Either 
way, it was a lot of money for unwanted customers and decrepit infrastructure.

   

  Why such a high value?  Why not $1?

   

  Are they factoring in an expected stream of USF/CAF subsidies as part of the 
value of buying a customer?  Or are they just being stupid?  I assume executive 
pay goes up the bigger the company grows, so maybe perverse incentives.  Look 
at the marvelous Hindenburg we have built, it’s HUGE!

   

   

   

  From: Af [mailto:af-boun...@afmug.com] On Behalf Of Chuck McCown
  Sent: Thursday, January 12, 2017 10:39 AM
  To: af@afmug.com
  Subject: Re: [AFMUG] Price per sub?

   

  Even if EBITDA is zero year over year, you can look at growth of equity.  If 
the assets are truly worth what they are booked at, then buy for that value.  I 
prefer net present value of future cash flows to be a part of the analysis. 

   

  But for something that has been a going concern for some time, with little 
debt and equity close to net asset value, multiples of EBITDA are a comfortable 
way to value the thing.  

   

  However, in a WISP situation where you are buying the customer and some 
amount of SM and AP that may or may not have much value to you, net present 
value may be the 

Re: [AFMUG] Price per sub?

[Travis Johnson]

Hi,

Not to be picky about terminology, but by definition a "tax" is "a 
compulsory contribution to state revenue, levied by the government on 
workers' income and business profits or added to the cost of some goods, 
services, and transactions."


Isn't this money collected as USF and other "fees" on telephone bills? 
And these are fees that I can NOT remove from my phone bill, so 
basically it's a tax... it's just a telephone tax rather than income or 
sales tax. Right?


Travis

On 1/12/2017 9:59 AM, Chuck McCown wrote:
Depending on the area, FCC study area, parent trap rules etc, a rural 
sub can earn up to about $200/month even if they don’t pay their bill 
or use any services.  It used to be more.  If you overearn, your 
welfare check gets cut, but in any case the guaranteed rate of return 
used to be 11.25%.  And that is an ROI after cost recovery of legit 
expenses.  That is an EBITDA ROR.  Hard to pass up a deal like that.
But the FCC is deflating that whole program.  They pushed a whole 
bunch of these rural companies into a lucrative A-CAM deal that pays 
them a fixed amount for the next 10 years with the expectation of 
nothing after that.  For the “buy out” they have to agree to upgrade 
to 25 Mbps service.
They did cap executive pay for a while then repealed it, I think it is 
back on.  And for the non A-CAM companies (it was an elective program) 
they are capping investment.  But still, it is around $10K per 
dwelling.  That may seem high, but I have personally had BLM 
permitting expenses equal $40K per dwelling alone with total cost of 
construction hitting $200K per dwelling.

The magic of revenue pooling, no tax dollars are harmed in this scheme...
*From:* Ken Hohhof
*Sent:* Thursday, January 12, 2017 9:51 AM
*To:* af@afmug.com
*Subject:* Re: [AFMUG] Price per sub?

Chuck, here’s a question for you.

I seem to remember checking how much Frontier paid for customers 
Verizon and AT didn’t want, and I think it was around the same 
$2000/sub number that cable companies are typically priced at.  Or 
maybe it was $1000 and I rationalized it in my mind as half of a cable 
customer because no TV.  Either way, it was a lot of money for 
unwanted customers and decrepit infrastructure.


Why such a high value?  Why not $1?

Are they factoring in an expected stream of USF/CAF subsidies as part 
of the value of buying a customer?  Or are they just being stupid?  I 
assume executive pay goes up the bigger the company grows, so maybe 
perverse incentives.  Look at the marvelous Hindenburg we have built, 
it’s HUGE!


*From:*Af [mailto:af-boun...@afmug.com] *On Behalf Of *Chuck McCown
*Sent:* Thursday, January 12, 2017 10:39 AM
*To:* af@afmug.com
*Subject:* Re: [AFMUG] Price per sub?

Even if EBITDA is zero year over year, you can look at growth of 
equity.  If the assets are truly worth what they are booked at, then 
buy for that value.  I prefer net present value of future cash flows 
to be a part of the analysis.


But for something that has been a going concern for some time, with 
little debt and equity close to net asset value, multiples of EBITDA 
are a comfortable way to value the thing.


However, in a WISP situation where you are buying the customer and 
some amount of SM and AP that may or may not have much value to you, 
net present value may be the way to go.


*From:*Ken Hohhof

*Sent:*Thursday, January 12, 2017 8:39 AM

*To:*af@afmug.com

*Subject:*Re: [AFMUG] Price per sub?

I think there is some validity in getting the revenue and expense 
numbers separately and doing your own analysis.  If you just ask for 
their net income, that will vary greatly based on how the current 
owners are managing the business, I think there are 3 types:


1)  Being run as a startup

2)  Being run as a big company / cash cow

3)  Being groomed for sale

A 190 sub WISP is probably being run as a startup.  First, that means 
managing cashflow not profit.  Second, that means any time you  have 
an extra dime, you spend it on expanding the business.  If those are 
capital expenditures, maybe they go into depreciation and get excluded 
from EBITDA.  But if they go into advertising, subscriber radios, 
install materials and labor, etc., that gets expensed and makes the 
business look less profitable.


Whatever year it was that capital gains taxes went back up, I heard a 
tutorial on how to groom your business for sale before the deadline.  
Basically you stop focusing on increasing revenue, and instead cut 
costs, it will immediately improve your EBITDA and therefore your 
valuation.  I think we’ve all experienced this when something causes 
us to temporarily cut back expenses, for me it happens every winter.  
All of a sudden your business becomes a cash cow and looks amazingly 
profitable.  I also see this when I look at certain competitors who 
don’t have up to date equipment, don’t maintain their network, don’t 
have battery backup at tower sites, and all their customers hat

Re: [AFMUG] Price per sub?

[Chuck McCown]

Depending on the area, FCC study area, parent trap rules etc, a rural sub can 
earn up to about $200/month even if they don’t pay their bill or use any 
services.  It used to be more.  If you overearn, your welfare check gets cut, 
but in any case the guaranteed rate of return used to be 11.25%.  And that is 
an ROI after cost recovery of legit expenses.  That is an EBITDA ROR.  Hard to 
pass up a deal like that.  

But the FCC is deflating that whole program.  They pushed a whole bunch of 
these rural companies into a lucrative A-CAM deal that pays them a fixed amount 
for the next 10 years with the expectation of nothing after that.  For the “buy 
out” they have to agree to upgrade to 25 Mbps service.  

They did cap executive pay for a while then repealed it, I think it is back on. 
 And for the non A-CAM companies (it was an elective program) they are capping 
investment.  But still, it is around $10K per dwelling.  That may seem high, 
but I have personally had BLM permitting expenses equal $40K per dwelling alone 
with total cost of construction hitting $200K per dwelling.  

The magic of revenue pooling, no tax dollars are harmed in this scheme...

From: Ken Hohhof 
Sent: Thursday, January 12, 2017 9:51 AM
To: af@afmug.com 
Subject: Re: [AFMUG] Price per sub?

Chuck, here’s a question for you.

 

I seem to remember checking how much Frontier paid for customers Verizon and 
AT didn’t want, and I think it was around the same $2000/sub number that 
cable companies are typically priced at.  Or maybe it was $1000 and I 
rationalized it in my mind as half of a cable customer because no TV.  Either 
way, it was a lot of money for unwanted customers and decrepit infrastructure.

 

Why such a high value?  Why not $1?

 

Are they factoring in an expected stream of USF/CAF subsidies as part of the 
value of buying a customer?  Or are they just being stupid?  I assume executive 
pay goes up the bigger the company grows, so maybe perverse incentives.  Look 
at the marvelous Hindenburg we have built, it’s HUGE!

 

 

 

From: Af [mailto:af-boun...@afmug.com] On Behalf Of Chuck McCown
Sent: Thursday, January 12, 2017 10:39 AM
To: af@afmug.com
Subject: Re: [AFMUG] Price per sub?

 

Even if EBITDA is zero year over year, you can look at growth of equity.  If 
the assets are truly worth what they are booked at, then buy for that value.  I 
prefer net present value of future cash flows to be a part of the analysis. 

 

But for something that has been a going concern for some time, with little debt 
and equity close to net asset value, multiples of EBITDA are a comfortable way 
to value the thing.  

 

However, in a WISP situation where you are buying the customer and some amount 
of SM and AP that may or may not have much value to you, net present value may 
be the way to go.  

 

From: Ken Hohhof 

Sent: Thursday, January 12, 2017 8:39 AM

To: af@afmug.com 

Subject: Re: [AFMUG] Price per sub?

 

I think there is some validity in getting the revenue and expense numbers 
separately and doing your own analysis.  If you just ask for their net income, 
that will vary greatly based on how the current owners are managing the 
business, I think there are 3 types:

 

1)  Being run as a startup

2)  Being run as a big company / cash cow

3)  Being groomed for sale

 

A 190 sub WISP is probably being run as a startup.  First, that means managing 
cashflow not profit.  Second, that means any time you  have an extra dime, you 
spend it on expanding the business.  If those are capital expenditures, maybe 
they go into depreciation and get excluded from EBITDA.  But if they go into 
advertising, subscriber radios, install materials and labor, etc., that gets 
expensed and makes the business look less profitable.

 

Whatever year it was that capital gains taxes went back up, I heard a tutorial 
on how to groom your business for sale before the deadline.  Basically you stop 
focusing on increasing revenue, and instead cut costs, it will immediately 
improve your EBITDA and therefore your valuation.  I think we’ve all 
experienced this when something causes us to temporarily cut back expenses, for 
me it happens every winter.  All of a sudden your business becomes a cash cow 
and looks amazingly profitable.  I also see this when I look at certain 
competitors who don’t have up to date equipment, don’t maintain their network, 
don’t have battery backup at tower sites, and all their customers hate them for 
their slow service, frequent outages, and poor customer service.  You ask 
yourself, how can they stay in business?  Ask yourself, if you cut way back on 
expenses, and as a result lost 25% of your customers every year, would your 
business be more or less profitable?  It might be more profitable.  Long term, 
you have to believe these WISPs will eventually go out of business, but year 
after year they survive.  And maybe someone will buy them because they are 
profitable on paper.  But they end up acquiring bad

Re: [AFMUG] Price per sub?

[Ken Hohhof]

Chuck, here’s a question for you.

 

I seem to remember checking how much Frontier paid for customers Verizon and 
AT didn’t want, and I think it was around the same $2000/sub number that 
cable companies are typically priced at.  Or maybe it was $1000 and I 
rationalized it in my mind as half of a cable customer because no TV.  Either 
way, it was a lot of money for unwanted customers and decrepit infrastructure.

 

Why such a high value?  Why not $1?

 

Are they factoring in an expected stream of USF/CAF subsidies as part of the 
value of buying a customer?  Or are they just being stupid?  I assume executive 
pay goes up the bigger the company grows, so maybe perverse incentives.  Look 
at the marvelous Hindenburg we have built, it’s HUGE!

 

 

 

From: Af [mailto:af-boun...@afmug.com] On Behalf Of Chuck McCown
Sent: Thursday, January 12, 2017 10:39 AM
To: af@afmug.com
Subject: Re: [AFMUG] Price per sub?

 

Even if EBITDA is zero year over year, you can look at growth of equity.  If 
the assets are truly worth what they are booked at, then buy for that value.  I 
prefer net present value of future cash flows to be a part of the analysis. 

 

But for something that has been a going concern for some time, with little debt 
and equity close to net asset value, multiples of EBITDA are a comfortable way 
to value the thing.  

 

However, in a WISP situation where you are buying the customer and some amount 
of SM and AP that may or may not have much value to you, net present value may 
be the way to go.  

 

From: Ken Hohhof 

Sent: Thursday, January 12, 2017 8:39 AM

To: af@afmug.com <mailto:af@afmug.com>  

Subject: Re: [AFMUG] Price per sub?

 

I think there is some validity in getting the revenue and expense numbers 
separately and doing your own analysis.  If you just ask for their net income, 
that will vary greatly based on how the current owners are managing the 
business, I think there are 3 types:

 

1)  Being run as a startup

2)  Being run as a big company / cash cow

3)  Being groomed for sale

 

A 190 sub WISP is probably being run as a startup.  First, that means managing 
cashflow not profit.  Second, that means any time you  have an extra dime, you 
spend it on expanding the business.  If those are capital expenditures, maybe 
they go into depreciation and get excluded from EBITDA.  But if they go into 
advertising, subscriber radios, install materials and labor, etc., that gets 
expensed and makes the business look less profitable.

 

Whatever year it was that capital gains taxes went back up, I heard a tutorial 
on how to groom your business for sale before the deadline.  Basically you stop 
focusing on increasing revenue, and instead cut costs, it will immediately 
improve your EBITDA and therefore your valuation.  I think we’ve all 
experienced this when something causes us to temporarily cut back expenses, for 
me it happens every winter.  All of a sudden your business becomes a cash cow 
and looks amazingly profitable.  I also see this when I look at certain 
competitors who don’t have up to date equipment, don’t maintain their network, 
don’t have battery backup at tower sites, and all their customers hate them for 
their slow service, frequent outages, and poor customer service.  You ask 
yourself, how can they stay in business?  Ask yourself, if you cut way back on 
expenses, and as a result lost 25% of your customers every year, would your 
business be more or less profitable?  It might be more profitable.  Long term, 
you have to believe these WISPs will eventually go out of business, but year 
after year they survive.  And maybe someone will buy them because they are 
profitable on paper.  But they end up acquiring bad infrastructure and 
dissatisfied customers.

 

Not saying to ignore EBITDA, but I think many worthwhile WISPs that are still 
in startup mode will have zero EBITDA.  While if they have spent 6-12 months 
fluffing up the numbers to maximize their valuation for a sale, those better 
numbers may be deceptive.

 

One final note, when I worked at Tellabs (around 1990), I remember the founder 
saying you want to make a small profit.  Any more just means you pay more 
taxes, and some raider can buy you with your own cash.  Better to reinvest that 
money in the business.

 

 

From: Af [mailto:af-boun...@afmug.com] On Behalf Of CBB - Jay Fuller
Sent: Thursday, January 12, 2017 9:03 AM
To: af@afmug.com <mailto:af@afmug.com> 
Subject: Re: [AFMUG] Price per sub?

 

 

i hear that and 4x ebidta over and over.  in terms of they don't know what 
ebitda does i don't even ask for those numbers.  after initial conversations i 
always ask for a years worth of bank statements.  i've been known to go back 
three years.  i can plug that data into quickbooks in a day and then pull 
pretty much whatever financial data i need to pull.   and it does not offend 
the company you are trying to purchase who is almost guaranteed to now know 
that ebitda is (earn

Re: [AFMUG] Price per sub?

[Chuck McCown]

Even if EBITDA is zero year over year, you can look at growth of equity.  If 
the assets are truly worth what they are booked at, then buy for that value.  I 
prefer net present value of future cash flows to be a part of the analysis. 

But for something that has been a going concern for some time, with little debt 
and equity close to net asset value, multiples of EBITDA are a comfortable way 
to value the thing.  

However, in a WISP situation where you are buying the customer and some amount 
of SM and AP that may or may not have much value to you, net present value may 
be the way to go.  

From: Ken Hohhof 
Sent: Thursday, January 12, 2017 8:39 AM
To: af@afmug.com 
Subject: Re: [AFMUG] Price per sub?

I think there is some validity in getting the revenue and expense numbers 
separately and doing your own analysis.  If you just ask for their net income, 
that will vary greatly based on how the current owners are managing the 
business, I think there are 3 types:

 

1)  Being run as a startup

2)  Being run as a big company / cash cow

3)  Being groomed for sale

 

A 190 sub WISP is probably being run as a startup.  First, that means managing 
cashflow not profit.  Second, that means any time you  have an extra dime, you 
spend it on expanding the business.  If those are capital expenditures, maybe 
they go into depreciation and get excluded from EBITDA.  But if they go into 
advertising, subscriber radios, install materials and labor, etc., that gets 
expensed and makes the business look less profitable.

 

Whatever year it was that capital gains taxes went back up, I heard a tutorial 
on how to groom your business for sale before the deadline.  Basically you stop 
focusing on increasing revenue, and instead cut costs, it will immediately 
improve your EBITDA and therefore your valuation.  I think we’ve all 
experienced this when something causes us to temporarily cut back expenses, for 
me it happens every winter.  All of a sudden your business becomes a cash cow 
and looks amazingly profitable.  I also see this when I look at certain 
competitors who don’t have up to date equipment, don’t maintain their network, 
don’t have battery backup at tower sites, and all their customers hate them for 
their slow service, frequent outages, and poor customer service.  You ask 
yourself, how can they stay in business?  Ask yourself, if you cut way back on 
expenses, and as a result lost 25% of your customers every year, would your 
business be more or less profitable?  It might be more profitable.  Long term, 
you have to believe these WISPs will eventually go out of business, but year 
after year they survive.  And maybe someone will buy them because they are 
profitable on paper.  But they end up acquiring bad infrastructure and 
dissatisfied customers.

 

Not saying to ignore EBITDA, but I think many worthwhile WISPs that are still 
in startup mode will have zero EBITDA.  While if they have spent 6-12 months 
fluffing up the numbers to maximize their valuation for a sale, those better 
numbers may be deceptive.

 

One final note, when I worked at Tellabs (around 1990), I remember the founder 
saying you want to make a small profit.  Any more just means you pay more 
taxes, and some raider can buy you with your own cash.  Better to reinvest that 
money in the business.

 

 

From: Af [mailto:af-boun...@afmug.com] On Behalf Of CBB - Jay Fuller
Sent: Thursday, January 12, 2017 9:03 AM
To: af@afmug.com
Subject: Re: [AFMUG] Price per sub?

 

 

i hear that and 4x ebidta over and over.  in terms of they don't know what 
ebitda does i don't even ask for those numbers.  after initial conversations i 
always ask for a years worth of bank statements.  i've been known to go back 
three years.  i can plug that data into quickbooks in a day and then pull 
pretty much whatever financial data i need to pull.   and it does not offend 
the company you are trying to purchase who is almost guaranteed to now know 
that ebitda is (earnimngs before interest tax and depreciation)

 

 

- Original Message - 

From: Mike Hammett 

To: af@afmug.com 

Sent: Wednesday, January 11, 2017 8:07 PM

Subject: Re: [AFMUG] Price per sub?

 

I hear that is around 12x - 18x months of revenue and a heck of a lot easier to 
calculate when ballparking. They know their revenue (or well, is somewhat easy 
to figure out). They probably can't spell EBITDA.



-
Mike Hammett
Intelligent Computing Solutions

Midwest Internet Exchange

The Brothers WISP








From: "Chuck McCown" <ch...@wbmfg.com>
To: af@afmug.com
Sent: Wednesday, January 11, 2017 3:16:00 PM
Subject: Re: [AFMUG] Price per sub?

4x ebitda

 

From: Josh Reynolds 

Sent: Wednesday, January 11, 2017 2:14 PM

To: af@afmug.com 

Subject: Re: [AFMUG] Price per sub?

 

How many subs?

 

On Jan 11, 2017 3:13 PM, "Brett A Mansfield" <li...@silverlakeinternet

Re: [AFMUG] Price per sub?

[Ken Hohhof]

I am confused when he says they have 90% “take rate” yet there is another WISP 
competitor in the area.  I assume there are also people with Hughesnet, Exede, 
mobile hotspots, and Luddites with no Internet.  Perhaps he means something 
other than they have 90% of households in the coverage area as customers.

 

I can understand with a $20 plan they could sweep up even the people who could 
almost use dialup.  Still 90% market penetration in the face of competition 
seems amazing.  I’m guessing 10% of households in my area don’t have any kind 
of fixed Internet, either because they don’t need no stinkin’ Internet, or 
because they just use the data plan on their smartphone.

 

 

From: Af [mailto:af-boun...@afmug.com] On Behalf Of Chuck McCown
Sent: Thursday, January 12, 2017 10:15 AM
To: af@afmug.com
Subject: Re: [AFMUG] Price per sub?

 

We see the asymptote converging on about 84% in our FTTH neighborhoods.   

 

From: Brian Webster 

Sent: Wednesday, January 11, 2017 7:36 PM

To: af@afmug.com 

Subject: Re: [AFMUG] Price per sub?

 

A couple of things that seem to always come up in these deals. One, what future 
revenue has already been taken by the current owners. What I mean by that are 
prepaid annual contracts, side deals on site rent in exchange for relay sites, 
stuff like that.

 

Second, is the owners tend to want you to buy their potential. When you say 90% 
take rate you should dig in to those numbers. The highest adoption rate in 
America are only about 80% of households passed. Are they saying 90% take rate 
on leads that come in? How many homes does their network potentially cover vs. 
number of subscribers. How much competition is there for those homes. What 
equipment do they have deployed, signal levels and client distances? This will 
have a big effect on your ability to upsell bandwidth. If the clients are all 
marginal connections you will not have the ability to deliver much capacity off 
the sectors if you want to upsell or if customer want more bandwidth. This 
means upgrades at your own cost. 

 

Third, look very carefully at tower site leases or agreements. Are there any? 
Do they allow for a transfer of ownership and stay in effect? Are there balloon 
rent increases that would change your forecasts? Do they have renewal terms 
that are long enough for you to make your money on the purchase of their 
company? Large company or small being purchased the tower site agreements are 
one very important thing to dig deep on the details.

 

 

Thank You,

Brian Webster

www.wirelessmapping.com <http://www.wirelessmapping.com> 

www.Broadband-Mapping.com  

 

From: Af [mailto:af-boun...@afmug.com] On Behalf Of Mike Hammett
Sent: Wednesday, January 11, 2017 9:08 PM
To: af@afmug.com
Subject: Re: [AFMUG] Price per sub?

 

I hear that is around 12x - 18x months of revenue and a heck of a lot easier to 
calculate when ballparking. They know their revenue (or well, is somewhat easy 
to figure out). They probably can't spell EBITDA.



-
Mike Hammett
 <http://www.ics-il.com/> Intelligent Computing Solutions
 <https://www.facebook.com/ICSIL>  
<https://plus.google.com/+IntelligentComputingSolutionsDeKalb>  
<https://www.linkedin.com/company/intelligent-computing-solutions>  
<https://twitter.com/ICSIL> 
 <http://www.midwest-ix.com/> Midwest Internet Exchange
 <https://www.facebook.com/mdwestix>  
<https://www.linkedin.com/company/midwest-internet-exchange>  
<https://twitter.com/mdwestix> 
 <http://www.thebrotherswisp.com/> The Brothers WISP
 <https://www.facebook.com/thebrotherswisp>  
<https://www.youtube.com/channel/UCXSdfxQv7SpoRQYNyLwntZg> 




  _  

From: "Chuck McCown" <ch...@wbmfg.com>
To: af@afmug.com
Sent: Wednesday, January 11, 2017 3:16:00 PM
Subject: Re: [AFMUG] Price per sub?

4x ebitda

 

From: Josh Reynolds 

Sent: Wednesday, January 11, 2017 2:14 PM

To: af@afmug.com 

Subject: Re: [AFMUG] Price per sub?

 

How many subs?

 

On Jan 11, 2017 3:13 PM, "Brett A Mansfield" <li...@silverlakeinternet.com> 
wrote:

When looking at buying a competitor, I'm wondering what everyone's thought is 
on a price per sub? They don't do contracts and they use the litebeam hardware.

I'm not looking for legal advice, just wondering what all of you think is fair. 
This company has about a 90% take rate in the area they're in. Their plans are 
$20, $40, and $50/mo.

Thank you,
Brett A Mansfield

 

Re: [AFMUG] Price per sub?

[Chuck McCown]

We see the asymptote converging on about 84% in our FTTH neighborhoods.   

From: Brian Webster 
Sent: Wednesday, January 11, 2017 7:36 PM
To: af@afmug.com 
Subject: Re: [AFMUG] Price per sub?

A couple of things that seem to always come up in these deals. One, what future 
revenue has already been taken by the current owners. What I mean by that are 
prepaid annual contracts, side deals on site rent in exchange for relay sites, 
stuff like that.

 

Second, is the owners tend to want you to buy their potential. When you say 90% 
take rate you should dig in to those numbers. The highest adoption rate in 
America are only about 80% of households passed. Are they saying 90% take rate 
on leads that come in? How many homes does their network potentially cover vs. 
number of subscribers. How much competition is there for those homes. What 
equipment do they have deployed, signal levels and client distances? This will 
have a big effect on your ability to upsell bandwidth. If the clients are all 
marginal connections you will not have the ability to deliver much capacity off 
the sectors if you want to upsell or if customer want more bandwidth. This 
means upgrades at your own cost. 

 

Third, look very carefully at tower site leases or agreements. Are there any? 
Do they allow for a transfer of ownership and stay in effect? Are there balloon 
rent increases that would change your forecasts? Do they have renewal terms 
that are long enough for you to make your money on the purchase of their 
company? Large company or small being purchased the tower site agreements are 
one very important thing to dig deep on the details.

 

 

Thank You,

Brian Webster

www.wirelessmapping.com

www.Broadband-Mapping.com

 

From: Af [mailto:af-boun...@afmug.com] On Behalf Of Mike Hammett
Sent: Wednesday, January 11, 2017 9:08 PM
To: af@afmug.com
Subject: Re: [AFMUG] Price per sub?

 

I hear that is around 12x - 18x months of revenue and a heck of a lot easier to 
calculate when ballparking. They know their revenue (or well, is somewhat easy 
to figure out). They probably can't spell EBITDA.



-
Mike Hammett
Intelligent Computing Solutions

Midwest Internet Exchange

The Brothers WISP








From: "Chuck McCown" <ch...@wbmfg.com>
To: af@afmug.com
Sent: Wednesday, January 11, 2017 3:16:00 PM
Subject: Re: [AFMUG] Price per sub?

4x ebitda

 

From: Josh Reynolds 

Sent: Wednesday, January 11, 2017 2:14 PM

To: af@afmug.com 

Subject: Re: [AFMUG] Price per sub?

 

How many subs?

 

On Jan 11, 2017 3:13 PM, "Brett A Mansfield" <li...@silverlakeinternet.com> 
wrote:

When looking at buying a competitor, I'm wondering what everyone's thought is 
on a price per sub? They don't do contracts and they use the litebeam hardware.

I'm not looking for legal advice, just wondering what all of you think is fair. 
This company has about a 90% take rate in the area they're in. Their plans are 
$20, $40, and $50/mo.

Thank you,
Brett A Mansfield

 

Re: [AFMUG] Price per sub?

[Ken Hohhof]

I think there is some validity in getting the revenue and expense numbers 
separately and doing your own analysis.  If you just ask for their net income, 
that will vary greatly based on how the current owners are managing the 
business, I think there are 3 types:

 

1)  Being run as a startup

2)  Being run as a big company / cash cow

3)  Being groomed for sale

 

A 190 sub WISP is probably being run as a startup.  First, that means managing 
cashflow not profit.  Second, that means any time you  have an extra dime, you 
spend it on expanding the business.  If those are capital expenditures, maybe 
they go into depreciation and get excluded from EBITDA.  But if they go into 
advertising, subscriber radios, install materials and labor, etc., that gets 
expensed and makes the business look less profitable.

 

Whatever year it was that capital gains taxes went back up, I heard a tutorial 
on how to groom your business for sale before the deadline.  Basically you stop 
focusing on increasing revenue, and instead cut costs, it will immediately 
improve your EBITDA and therefore your valuation.  I think we’ve all 
experienced this when something causes us to temporarily cut back expenses, for 
me it happens every winter.  All of a sudden your business becomes a cash cow 
and looks amazingly profitable.  I also see this when I look at certain 
competitors who don’t have up to date equipment, don’t maintain their network, 
don’t have battery backup at tower sites, and all their customers hate them for 
their slow service, frequent outages, and poor customer service.  You ask 
yourself, how can they stay in business?  Ask yourself, if you cut way back on 
expenses, and as a result lost 25% of your customers every year, would your 
business be more or less profitable?  It might be more profitable.  Long term, 
you have to believe these WISPs will eventually go out of business, but year 
after year they survive.  And maybe someone will buy them because they are 
profitable on paper.  But they end up acquiring bad infrastructure and 
dissatisfied customers.

 

Not saying to ignore EBITDA, but I think many worthwhile WISPs that are still 
in startup mode will have zero EBITDA.  While if they have spent 6-12 months 
fluffing up the numbers to maximize their valuation for a sale, those better 
numbers may be deceptive.

 

One final note, when I worked at Tellabs (around 1990), I remember the founder 
saying you want to make a small profit.  Any more just means you pay more 
taxes, and some raider can buy you with your own cash.  Better to reinvest that 
money in the business.

 

 

From: Af [mailto:af-boun...@afmug.com] On Behalf Of CBB - Jay Fuller
Sent: Thursday, January 12, 2017 9:03 AM
To: af@afmug.com
Subject: Re: [AFMUG] Price per sub?

 

 

i hear that and 4x ebidta over and over.  in terms of they don't know what 
ebitda does i don't even ask for those numbers.  after initial conversations i 
always ask for a years worth of bank statements.  i've been known to go back 
three years.  i can plug that data into quickbooks in a day and then pull 
pretty much whatever financial data i need to pull.   and it does not offend 
the company you are trying to purchase who is almost guaranteed to now know 
that ebitda is (earnimngs before interest tax and depreciation)

 

 

- Original Message - 

From: Mike Hammett <mailto:af...@ics-il.net>  

To: af@afmug.com <mailto:af@afmug.com>  

Sent: Wednesday, January 11, 2017 8:07 PM

Subject: Re: [AFMUG] Price per sub?

 

I hear that is around 12x - 18x months of revenue and a heck of a lot easier to 
calculate when ballparking. They know their revenue (or well, is somewhat easy 
to figure out). They probably can't spell EBITDA.



-
Mike Hammett
 <http://www.ics-il.com/> Intelligent Computing Solutions
 <https://www.facebook.com/ICSIL>  
<https://plus.google.com/+IntelligentComputingSolutionsDeKalb>  
<https://www.linkedin.com/company/intelligent-computing-solutions>  
<https://twitter.com/ICSIL> 
 <http://www.midwest-ix.com/> Midwest Internet Exchange
 <https://www.facebook.com/mdwestix>  
<https://www.linkedin.com/company/midwest-internet-exchange>  
<https://twitter.com/mdwestix> 
 <http://www.thebrotherswisp.com/> The Brothers WISP
 <https://www.facebook.com/thebrotherswisp>  
<https://www.youtube.com/channel/UCXSdfxQv7SpoRQYNyLwntZg> 




  _  

From: "Chuck McCown" <ch...@wbmfg.com>
To: af@afmug.com
Sent: Wednesday, January 11, 2017 3:16:00 PM
Subject: Re: [AFMUG] Price per sub?

4x ebitda

 

From: Josh Reynolds 

Sent: Wednesday, January 11, 2017 2:14 PM

To: af@afmug.com 

Subject: Re: [AFMUG] Price per sub?

 

How many subs?

 

On Jan 11, 2017 3:13 PM, "Brett A Mansfield" <li...@silverlakeinternet.com> 
wrote:

When looking at buying a competitor, I'm wondering what everyone's thought is 
on a price per sub? They don't do c

Re: [AFMUG] Price per sub?

[CBB - Jay Fuller]

yes.
i so agree.

  - Original Message - 
  From: Brett A Mansfield 
  To: af@afmug.com 
  Sent: Wednesday, January 11, 2017 8:40 PM
  Subject: Re: [AFMUG] Price per sub?


  It would be a lot cheaper to just take their customers. But it would be a lot 
more work and take more time. Also, that's kind of a jerk move I think. 
Besides, I really want the tower they own as part of it. Then I can possibly 
kick off their only competitor that pays to use it and then have 100% of the 
subs. 


  Their 40' tower is the only one on this mountain and would be a great asset 
to my company and goals. And kicking off the other guys would free up the 
entire 11Ghz spectrum in this valley making me be able to setup whatever links 
I need unhindered. 


  Thank you all for your suggestions. I think I've figured out what to do next.

  Thank you,
  Brett A Mansfield

  On Jan 11, 2017, at 7:25 PM, Lewis Bergman <lewis.berg...@gmail.com> wrote:


I don't know if I would buy someone who couldn't figure EBITDA. How could 
you trust their books? Maybe if it was enough discount.  On the other hand, if 
you know all the cost involved you don't really need EBITDA to evaluate a 
business.  
So many times it is cheaper and just as fast to just take the customers. 
For a network that small it wouldn't take much. 


On Wed, Jan 11, 2017, 8:07 PM Mike Hammett <af...@ics-il.net> wrote:

  I hear that is around 12x - 18x months of revenue and a heck of a lot 
easier to calculate when ballparking. They know their revenue (or well, is 
somewhat easy to figure out). They probably can't spell EBITDA.




  -
  Mike Hammett
  Intelligent Computing Solutions

  Midwest Internet Exchange

  The Brothers WISP






--

  From: "Chuck McCown" <ch...@wbmfg.com>
  To: af@afmug.com
  Sent: Wednesday, January 11, 2017 3:16:00 PM

  Subject: Re: [AFMUG] Price per sub?


  4x ebitda

  From: Josh Reynolds 
  Sent: Wednesday, January 11, 2017 2:14 PM
  To: af@afmug.com 
  Subject: Re: [AFMUG] Price per sub?
  How many subs?

  On Jan 11, 2017 3:13 PM, "Brett A Mansfield" 
<li...@silverlakeinternet.com> wrote:

When looking at buying a competitor, I'm wondering what everyone's 
thought is on a price per sub? They don't do contracts and they use the 
litebeam hardware.

I'm not looking for legal advice, just wondering what all of you think 
is fair. This company has about a 90% take rate in the area they're in. Their 
plans are $20, $40, and $50/mo.

Thank you,
Brett A Mansfield

Re: [AFMUG] Price per sub?

[CBB - Jay Fuller]

on average we negotiate back and forth about six different bids.
the current company we're working with we agreed after three bids.

  - Original Message - 
  From: Mike Hammett 
  To: af@afmug.com 
  Sent: Wednesday, January 11, 2017 8:29 PM
  Subject: Re: [AFMUG] Price per sub?


  I look at it as a leading price. If interested, both sides dig in to firm up 
their positions.




  -
  Mike Hammett
  Intelligent Computing Solutions

  Midwest Internet Exchange

  The Brothers WISP






--

  From: "Lewis Bergman" <lewis.berg...@gmail.com>
  To: af@afmug.com
  Sent: Wednesday, January 11, 2017 8:25:17 PM
  Subject: Re: [AFMUG] Price per sub?

  I don't know if I would buy someone who couldn't figure EBITDA. How could you 
trust their books? Maybe if it was enough discount.  On the other hand, if you 
know all the cost involved you don't really need EBITDA to evaluate a business. 
 
  So many times it is cheaper and just as fast to just take the customers. For 
a network that small it wouldn't take much. 


  On Wed, Jan 11, 2017, 8:07 PM Mike Hammett <af...@ics-il.net> wrote:

I hear that is around 12x - 18x months of revenue and a heck of a lot 
easier to calculate when ballparking. They know their revenue (or well, is 
somewhat easy to figure out). They probably can't spell EBITDA.




-
Mike Hammett
Intelligent Computing Solutions

Midwest Internet Exchange

The Brothers WISP








From: "Chuck McCown" <ch...@wbmfg.com>
To: af@afmug.com
Sent: Wednesday, January 11, 2017 3:16:00 PM

Subject: Re: [AFMUG] Price per sub?


4x ebitda

From: Josh Reynolds 
Sent: Wednesday, January 11, 2017 2:14 PM
    To: af@afmug.com 
Subject: Re: [AFMUG] Price per sub?
How many subs?

On Jan 11, 2017 3:13 PM, "Brett A Mansfield" <li...@silverlakeinternet.com> 
wrote:

  When looking at buying a competitor, I'm wondering what everyone's 
thought is on a price per sub? They don't do contracts and they use the 
litebeam hardware.

  I'm not looking for legal advice, just wondering what all of you think is 
fair. This company has about a 90% take rate in the area they're in. Their 
plans are $20, $40, and $50/mo.

  Thank you,
  Brett A Mansfield

Re: [AFMUG] Price per sub?

[CBB - Jay Fuller]

my biggest problem on the company we are in process with now is i had a hard 
time locating and discounting the external investments into the company.  they 
were regular deposits and mixed in with the customer payments.  i basically 
isolated any payment over $1000 and did not include it as a normal income 
payment.

there were months where external investers were infusing 10 and 15 thousand 
dollars.  lets just say telrad was involved (and is not cheap!)

  - Original Message - 
  From: Lewis Bergman 
  To: af@afmug.com 
  Sent: Wednesday, January 11, 2017 8:25 PM
  Subject: Re: [AFMUG] Price per sub?


  I don't know if I would buy someone who couldn't figure EBITDA. How could you 
trust their books? Maybe if it was enough discount.  On the other hand, if you 
know all the cost involved you don't really need EBITDA to evaluate a business. 
 
  So many times it is cheaper and just as fast to just take the customers. For 
a network that small it wouldn't take much. 


  On Wed, Jan 11, 2017, 8:07 PM Mike Hammett <af...@ics-il.net> wrote:

I hear that is around 12x - 18x months of revenue and a heck of a lot 
easier to calculate when ballparking. They know their revenue (or well, is 
somewhat easy to figure out). They probably can't spell EBITDA.




-
Mike Hammett
Intelligent Computing Solutions

Midwest Internet Exchange

The Brothers WISP








From: "Chuck McCown" <ch...@wbmfg.com>
To: af@afmug.com
Sent: Wednesday, January 11, 2017 3:16:00 PM

    Subject: Re: [AFMUG] Price per sub?


4x ebitda

From: Josh Reynolds 
Sent: Wednesday, January 11, 2017 2:14 PM
To: af@afmug.com 
    Subject: Re: [AFMUG] Price per sub?
How many subs?

On Jan 11, 2017 3:13 PM, "Brett A Mansfield" <li...@silverlakeinternet.com> 
wrote:

  When looking at buying a competitor, I'm wondering what everyone's 
thought is on a price per sub? They don't do contracts and they use the 
litebeam hardware.

  I'm not looking for legal advice, just wondering what all of you think is 
fair. This company has about a 90% take rate in the area they're in. Their 
plans are $20, $40, and $50/mo.

  Thank you,
  Brett A Mansfield

Re: [AFMUG] Price per sub?

[CBB - Jay Fuller]

i hear that and 4x ebidta over and over.  in terms of they don't know what 
ebitda does i don't even ask for those numbers.  after initial conversations i 
always ask for a years worth of bank statements.  i've been known to go back 
three years.  i can plug that data into quickbooks in a day and then pull 
pretty much whatever financial data i need to pull.   and it does not offend 
the company you are trying to purchase who is almost guaranteed to now know 
that ebitda is (earnimngs before interest tax and depreciation)


  - Original Message - 
  From: Mike Hammett 
  To: af@afmug.com 
  Sent: Wednesday, January 11, 2017 8:07 PM
  Subject: Re: [AFMUG] Price per sub?


  I hear that is around 12x - 18x months of revenue and a heck of a lot easier 
to calculate when ballparking. They know their revenue (or well, is somewhat 
easy to figure out). They probably can't spell EBITDA.




  -
  Mike Hammett
  Intelligent Computing Solutions

  Midwest Internet Exchange

  The Brothers WISP






--

  From: "Chuck McCown" <ch...@wbmfg.com>
  To: af@afmug.com
  Sent: Wednesday, January 11, 2017 3:16:00 PM
  Subject: Re: [AFMUG] Price per sub?


  4x ebitda

  From: Josh Reynolds 
  Sent: Wednesday, January 11, 2017 2:14 PM
  To: af@afmug.com 
  Subject: Re: [AFMUG] Price per sub?

  How many subs?

  On Jan 11, 2017 3:13 PM, "Brett A Mansfield" <li...@silverlakeinternet.com> 
wrote:

When looking at buying a competitor, I'm wondering what everyone's thought 
is on a price per sub? They don't do contracts and they use the litebeam 
hardware.

I'm not looking for legal advice, just wondering what all of you think is 
fair. This company has about a 90% take rate in the area they're in. Their 
plans are $20, $40, and $50/mo.

Thank you,
Brett A Mansfield

Re: [AFMUG] Price per sub?

[CBB - Jay Fuller]

I hear this argument often but don't agree with it.  I guess it depends on if 
they are "on top" of you or not - we used to be the only game in this part of 
Alabama but over the years a few other guys have come to bat.  Some we've 
helped get started.  Some we've worked with or they used to work for us.  
Recently we came across a company we weren't even aware of when we had two 
towers that could see each other.

We have acquired two companies and are in the process of acquiring a third.  We 
are not in the area they operate in and we don't know the local people there 
like they do.  They have networked for years and seem to know all the right 
strings to pull.  They've already created a network and installed the first x 
number of customers.  If they're burnt out and ready to quit or have run out of 
money that is even better - we can pick it up for pennies on the dollar.  We 
have proposed to pay less than half for this company than we did the last one - 
and by all comparisons they're roughly the same size as the last one.  They 
just got behind on their bills and will "turn to dust" within 30 days if we 
don't build a bandwidth connection over to them.

Because of that we did not offer 0, but we didn't offer what we offered the 
last company either because they were still in good enough shape to continue 
operations


  - Original Message - 
  From: Travis Johnson 
  To: af@afmug.com 
  Sent: Wednesday, January 11, 2017 5:40 PM
  Subject: Re: [AFMUG] Price per sub?


  I always looked at these type of things as "How much could I spend in 
advertising and giving away free months of service in that area to pick up a 
majority of the customers anyway?" :)

  If they are at $20/month, you could give customers 6 months free to switch to 
you, and you gain a customer for $120. People love to switch when they can get 
service for free.

  Travis



  On 1/11/2017 2:39 PM, Brett A Mansfield wrote:

There are only 190 subs. I'll have to get their financials to determine 
ebitda since they don't even know. But if it's what I think it is then they 
won't sell for what I'll offer. 4x ebitda isn't much for only 190 subs.

Thank you, 
Brett A Mansfield

On Jan 11, 2017, at 2:14 PM, Josh Reynolds <j...@kyneticwifi.com> wrote:


  How many subs?


  On Jan 11, 2017 3:13 PM, "Brett A Mansfield" 
<li...@silverlakeinternet.com> wrote:

When looking at buying a competitor, I'm wondering what everyone's 
thought is on a price per sub? They don't do contracts and they use the 
litebeam hardware.

I'm not looking for legal advice, just wondering what all of you think 
is fair. This company has about a 90% take rate in the area they're in. Their 
plans are $20, $40, and $50/mo.

Thank you,
Brett A Mansfield

Re: [AFMUG] Price per sub?

[George Skorup]

No, they can and probably will just sit on the channels until you can 
prove to the FCC that they are abandoned. I've never been through that 
process, but I imagine it doesn't happen very fast.


On 1/11/2017 8:40 PM, Brett A Mansfield wrote:
And kicking off the other guys would free up the entire 11Ghz spectrum 
in this valley making me be able to setup whatever links I need 
unhindered.

Re: [AFMUG] Price per sub?

[Brett A Mansfield]

It would be a lot cheaper to just take their customers. But it would be a lot 
more work and take more time. Also, that's kind of a jerk move I think. 
Besides, I really want the tower they own as part of it. Then I can possibly 
kick off their only competitor that pays to use it and then have 100% of the 
subs. 

Their 40' tower is the only one on this mountain and would be a great asset to 
my company and goals. And kicking off the other guys would free up the entire 
11Ghz spectrum in this valley making me be able to setup whatever links I need 
unhindered. 

Thank you all for your suggestions. I think I've figured out what to do next.

Thank you,
Brett A Mansfield

> On Jan 11, 2017, at 7:25 PM, Lewis Bergman <lewis.berg...@gmail.com> wrote:
> 
> I don't know if I would buy someone who couldn't figure EBITDA. How could you 
> trust their books? Maybe if it was enough discount.  On the other hand, if 
> you know all the cost involved you don't really need EBITDA to evaluate a 
> business.  
> So many times it is cheaper and just as fast to just take the customers. For 
> a network that small it wouldn't take much. 
> 
>> On Wed, Jan 11, 2017, 8:07 PM Mike Hammett <af...@ics-il.net> wrote:
>> I hear that is around 12x - 18x months of revenue and a heck of a lot easier 
>> to calculate when ballparking. They know their revenue (or well, is somewhat 
>> easy to figure out). They probably can't spell EBITDA.
>> 
>> 
>> 
>> -
>> Mike Hammett
>> Intelligent Computing Solutions
>> 
>> Midwest Internet Exchange
>> 
>> The Brothers WISP
>> 
>> 
>> 
>> 
>> From: "Chuck McCown" <ch...@wbmfg.com>
>> To: af@afmug.com
>> Sent: Wednesday, January 11, 2017 3:16:00 PM
>> 
>> Subject: Re: [AFMUG] Price per sub?
>> 
>> 4x ebitda
>>  
>> From: Josh Reynolds
>> Sent: Wednesday, January 11, 2017 2:14 PM
>> To: af@afmug.com
>> Subject: Re: [AFMUG] Price per sub?
>> How many subs?
>>  
>> On Jan 11, 2017 3:13 PM, "Brett A Mansfield" <li...@silverlakeinternet.com> 
>> wrote:
>> When looking at buying a competitor, I'm wondering what everyone's thought 
>> is on a price per sub? They don't do contracts and they use the litebeam 
>> hardware.
>> 
>> I'm not looking for legal advice, just wondering what all of you think is 
>> fair. This company has about a 90% take rate in the area they're in. Their 
>> plans are $20, $40, and $50/mo.
>> 
>> Thank you,
>> Brett A Mansfield

Re: [AFMUG] Price per sub?

[Brian Webster]

A couple of things that seem to always come up in these deals. One, what future 
revenue has already been taken by the current owners. What I mean by that are 
prepaid annual contracts, side deals on site rent in exchange for relay sites, 
stuff like that.

 

Second, is the owners tend to want you to buy their potential. When you say 90% 
take rate you should dig in to those numbers. The highest adoption rate in 
America are only about 80% of households passed. Are they saying 90% take rate 
on leads that come in? How many homes does their network potentially cover vs. 
number of subscribers. How much competition is there for those homes. What 
equipment do they have deployed, signal levels and client distances? This will 
have a big effect on your ability to upsell bandwidth. If the clients are all 
marginal connections you will not have the ability to deliver much capacity off 
the sectors if you want to upsell or if customer want more bandwidth. This 
means upgrades at your own cost. 

 

Third, look very carefully at tower site leases or agreements. Are there any? 
Do they allow for a transfer of ownership and stay in effect? Are there balloon 
rent increases that would change your forecasts? Do they have renewal terms 
that are long enough for you to make your money on the purchase of their 
company? Large company or small being purchased the tower site agreements are 
one very important thing to dig deep on the details.

 

 

Thank You,

Brian Webster

www.wirelessmapping.com

www.Broadband-Mapping.com

 

From: Af [mailto:af-boun...@afmug.com] On Behalf Of Mike Hammett
Sent: Wednesday, January 11, 2017 9:08 PM
To: af@afmug.com
Subject: Re: [AFMUG] Price per sub?

 

I hear that is around 12x - 18x months of revenue and a heck of a lot easier to 
calculate when ballparking. They know their revenue (or well, is somewhat easy 
to figure out). They probably can't spell EBITDA.



-
Mike Hammett
 <http://www.ics-il.com/> Intelligent Computing Solutions
 <https://www.facebook.com/ICSIL>  
<https://plus.google.com/+IntelligentComputingSolutionsDeKalb>  
<https://www.linkedin.com/company/intelligent-computing-solutions>  
<https://twitter.com/ICSIL> 
 <http://www.midwest-ix.com/> Midwest Internet Exchange
 <https://www.facebook.com/mdwestix>  
<https://www.linkedin.com/company/midwest-internet-exchange>  
<https://twitter.com/mdwestix> 
 <http://www.thebrotherswisp.com/> The Brothers WISP
 <https://www.facebook.com/thebrotherswisp>  
<https://www.youtube.com/channel/UCXSdfxQv7SpoRQYNyLwntZg> 




  _  

From: "Chuck McCown" <ch...@wbmfg.com>
To: af@afmug.com
Sent: Wednesday, January 11, 2017 3:16:00 PM
Subject: Re: [AFMUG] Price per sub?

4x ebitda

 

From: Josh Reynolds 

Sent: Wednesday, January 11, 2017 2:14 PM

To: af@afmug.com 

Subject: Re: [AFMUG] Price per sub?

 

How many subs?

 

On Jan 11, 2017 3:13 PM, "Brett A Mansfield" <li...@silverlakeinternet.com> 
wrote:

When looking at buying a competitor, I'm wondering what everyone's thought is 
on a price per sub? They don't do contracts and they use the litebeam hardware.

I'm not looking for legal advice, just wondering what all of you think is fair. 
This company has about a 90% take rate in the area they're in. Their plans are 
$20, $40, and $50/mo.

Thank you,
Brett A Mansfield

 

Re: [AFMUG] Price per sub?

[Mike Hammett]

I look at it as a leading price. If interested, both sides dig in to firm up 
their positions. 




- 
Mike Hammett 
Intelligent Computing Solutions 

Midwest Internet Exchange 

The Brothers WISP 




- Original Message -

From: "Lewis Bergman" <lewis.berg...@gmail.com> 
To: af@afmug.com 
Sent: Wednesday, January 11, 2017 8:25:17 PM 
Subject: Re: [AFMUG] Price per sub? 

I don't know if I would buy someone who couldn't figure EBITDA. How could you 
trust their books? Maybe if it was enough discount. On the other hand, if you 
know all the cost involved you don't really need EBITDA to evaluate a business. 
So many times it is cheaper and just as fast to just take the customers. For a 
network that small it wouldn't take much. 



On Wed, Jan 11, 2017, 8:07 PM Mike Hammett < af...@ics-il.net > wrote: 




I hear that is around 12x - 18x months of revenue and a heck of a lot easier to 
calculate when ballparking. They know their revenue (or well, is somewhat easy 
to figure out). They probably can't spell EBITDA. 




- 
Mike Hammett 
Intelligent Computing Solutions 

Midwest Internet Exchange 

The Brothers WISP 






From: "Chuck McCown" < ch...@wbmfg.com > 
To: af@afmug.com 
Sent: Wednesday, January 11, 2017 3:16:00 PM 



Subject: Re: [AFMUG] Price per sub? 







4x ebitda 




From: Josh Reynolds 
Sent: Wednesday, January 11, 2017 2:14 PM 








To: af@afmug.com 
Subject: Re: [AFMUG] Price per sub? 






How many subs? 


On Jan 11, 2017 3:13 PM, "Brett A Mansfield" < li...@silverlakeinternet.com > 
wrote: 


When looking at buying a competitor, I'm wondering what everyone's thought is 
on a price per sub? They don't do contracts and they use the litebeam hardware. 

I'm not looking for legal advice, just wondering what all of you think is fair. 
This company has about a 90% take rate in the area they're in. Their plans are 
$20, $40, and $50/mo. 

Thank you, 
Brett A Mansfield 

Re: [AFMUG] Price per sub?

[Lewis Bergman]

I don't know if I would buy someone who couldn't figure EBITDA. How could
you trust their books? Maybe if it was enough discount.  On the other hand,
if you know all the cost involved you don't really need EBITDA to evaluate
a business.
So many times it is cheaper and just as fast to just take the customers.
For a network that small it wouldn't take much.

On Wed, Jan 11, 2017, 8:07 PM Mike Hammett <af...@ics-il.net> wrote:

> I hear that is around 12x - 18x months of revenue and a heck of a lot
> easier to calculate when ballparking. They know their revenue (or well, is
> somewhat easy to figure out). They probably can't spell EBITDA.
>
>
>
> -
> Mike Hammett
> Intelligent Computing Solutions <http://www.ics-il.com/>
> <https://www.facebook.com/ICSIL>
> <https://plus.google.com/+IntelligentComputingSolutionsDeKalb>
> <https://www.linkedin.com/company/intelligent-computing-solutions>
> <https://twitter.com/ICSIL>
> Midwest Internet Exchange <http://www.midwest-ix.com/>
> <https://www.facebook.com/mdwestix>
> <https://www.linkedin.com/company/midwest-internet-exchange>
> <https://twitter.com/mdwestix>
> The Brothers WISP <http://www.thebrotherswisp.com/>
> <https://www.facebook.com/thebrotherswisp>
>
>
> <https://www.youtube.com/channel/UCXSdfxQv7SpoRQYNyLwntZg>
> ------
> *From: *"Chuck McCown" <ch...@wbmfg.com>
> *To: *af@afmug.com
> *Sent: *Wednesday, January 11, 2017 3:16:00 PM
>
> *Subject: *Re: [AFMUG] Price per sub?
>
> 4x ebitda
>
> *From:* Josh Reynolds
> *Sent:* Wednesday, January 11, 2017 2:14 PM
> *To:* af@afmug.com
> *Subject:* Re: [AFMUG] Price per sub?
> How many subs?
>
> On Jan 11, 2017 3:13 PM, "Brett A Mansfield" <li...@silverlakeinternet.com>
> wrote:
>
> When looking at buying a competitor, I'm wondering what everyone's thought
> is on a price per sub? They don't do contracts and they use the litebeam
> hardware.
>
> I'm not looking for legal advice, just wondering what all of you think is
> fair. This company has about a 90% take rate in the area they're in. Their
> plans are $20, $40, and $50/mo.
>
> Thank you,
> Brett A Mansfield
>
>

Re: [AFMUG] Price per sub?

[Mike Hammett]

I hear that is around 12x - 18x months of revenue and a heck of a lot easier to 
calculate when ballparking. They know their revenue (or well, is somewhat easy 
to figure out). They probably can't spell EBITDA. 




- 
Mike Hammett 
Intelligent Computing Solutions 

Midwest Internet Exchange 

The Brothers WISP 




- Original Message -

From: "Chuck McCown" <ch...@wbmfg.com> 
To: af@afmug.com 
Sent: Wednesday, January 11, 2017 3:16:00 PM 
Subject: Re: [AFMUG] Price per sub? 




4x ebitda 




From: Josh Reynolds 
Sent: Wednesday, January 11, 2017 2:14 PM 
To: af@afmug.com 
Subject: Re: [AFMUG] Price per sub? 


How many subs? 


On Jan 11, 2017 3:13 PM, "Brett A Mansfield" < li...@silverlakeinternet.com > 
wrote: 


When looking at buying a competitor, I'm wondering what everyone's thought is 
on a price per sub? They don't do contracts and they use the litebeam hardware. 

I'm not looking for legal advice, just wondering what all of you think is fair. 
This company has about a 90% take rate in the area they're in. Their plans are 
$20, $40, and $50/mo. 

Thank you, 
Brett A Mansfield 

Re: [AFMUG] Price per sub?

[Lewis Bergman]

Especially for a wisp that small, I would think 4x EBITDA is more than
reasonable . Chasing a deal isn't usually a profitable strategy.

On Jan 11, 2017 7:10 PM, "Brett A Mansfield" <li...@silverlakeinternet.com>
wrote:

> Hahaha, I love it. +1
>
> Thank you,
> Brett A Mansfield
>
> On Jan 11, 2017, at 5:26 PM, Josh Reynolds <j...@kyneticwifi.com> wrote:
>
> Just acquire, become more of a monopoly, write off all failed acquisitions
> as losses, buy out competitors, and keep a wad of cash in the pockets of
> the lobbyists you own so they can do their thing. Patent everything as fast
> as you can. Buy as many patents as you can. Find ways to get regulations
> that favor you and hurts any remaining competition. Murica.
>
> On Jan 11, 2017 3:56 PM, "Ken Hohhof" <af...@kwisp.com> wrote:
>
>> If the limiting factor is revenue, they need to get realistic.  4 years
>> of earnings for a business that has already exhausted the available market
>> potential (at least for sub count), and where infrastructure can require a
>> forklift upgrade every 3-5 years, is about as good as they will find.
>>
>>
>>
>> On the other hand, if the limiting factor is costs consuming most of the
>> revenue, the value of the business might change post acquisition.  Perhaps
>> you can cut salaries, if your existing techs can cover installs and
>> maintenance, and you no longer need to pay the owners.  Perhaps you can
>> replace their expensive bandwidth with your less expensive bandwidth.
>> Perhaps with your greater economies of scale and purchasing power, you can
>> lower their other costs, renegotiate tower leases, etc.
>>
>>
>>
>> In business school, I remember being taught this is the stuff M is
>> built on, assets that are worth more to the buyer than to the seller.
>> Although you wouldn’t know it from the deals that make the news, they seem
>> to be about getting bigger just to get bigger, with correspondingly bigger
>> executive pay.
>>
>>
>>
>>
>>
>> *From:* Af [mailto:af-boun...@afmug.com] *On Behalf Of *Brett A Mansfield
>> *Sent:* Wednesday, January 11, 2017 3:39 PM
>> *To:* af@afmug.com
>> *Subject:* Re: [AFMUG] Price per sub?
>>
>>
>>
>> There are only 190 subs. I'll have to get their financials to determine
>> ebitda since they don't even know. But if it's what I think it is then they
>> won't sell for what I'll offer. 4x ebitda isn't much for only 190 subs.
>>
>> Thank you,
>>
>> Brett A Mansfield
>>
>>
>> On Jan 11, 2017, at 2:14 PM, Josh Reynolds <j...@kyneticwifi.com> wrote:
>>
>> How many subs?
>>
>>
>>
>> On Jan 11, 2017 3:13 PM, "Brett A Mansfield" <
>> li...@silverlakeinternet.com> wrote:
>>
>> When looking at buying a competitor, I'm wondering what everyone's
>> thought is on a price per sub? They don't do contracts and they use the
>> litebeam hardware.
>>
>> I'm not looking for legal advice, just wondering what all of you think is
>> fair. This company has about a 90% take rate in the area they're in. Their
>> plans are $20, $40, and $50/mo.
>>
>> Thank you,
>> Brett A Mansfield
>>
>>

Re: [AFMUG] Price per sub?

[Brett A Mansfield]

Hahaha, I love it. +1

Thank you,
Brett A Mansfield

> On Jan 11, 2017, at 5:26 PM, Josh Reynolds <j...@kyneticwifi.com> wrote:
> 
> Just acquire, become more of a monopoly, write off all failed acquisitions as 
> losses, buy out competitors, and keep a wad of cash in the pockets of the 
> lobbyists you own so they can do their thing. Patent everything as fast as 
> you can. Buy as many patents as you can. Find ways to get regulations that 
> favor you and hurts any remaining competition. Murica.
> 
>> On Jan 11, 2017 3:56 PM, "Ken Hohhof" <af...@kwisp.com> wrote:
>> If the limiting factor is revenue, they need to get realistic.  4 years of 
>> earnings for a business that has already exhausted the available market 
>> potential (at least for sub count), and where infrastructure can require a 
>> forklift upgrade every 3-5 years, is about as good as they will find.
>> 
>>  
>> 
>> On the other hand, if the limiting factor is costs consuming most of the 
>> revenue, the value of the business might change post acquisition.  Perhaps 
>> you can cut salaries, if your existing techs can cover installs and 
>> maintenance, and you no longer need to pay the owners.  Perhaps you can 
>> replace their expensive bandwidth with your less expensive bandwidth.  
>> Perhaps with your greater economies of scale and purchasing power, you can 
>> lower their other costs, renegotiate tower leases, etc.
>> 
>>  
>> 
>> In business school, I remember being taught this is the stuff M is built 
>> on, assets that are worth more to the buyer than to the seller.  Although 
>> you wouldn’t know it from the deals that make the news, they seem to be 
>> about getting bigger just to get bigger, with correspondingly bigger 
>> executive pay.
>> 
>>  
>> 
>>  
>> 
>> From: Af [mailto:af-boun...@afmug.com] On Behalf Of Brett A Mansfield
>> Sent: Wednesday, January 11, 2017 3:39 PM
>> To: af@afmug.com
>> Subject: Re: [AFMUG] Price per sub?
>> 
>>  
>> 
>> There are only 190 subs. I'll have to get their financials to determine 
>> ebitda since they don't even know. But if it's what I think it is then they 
>> won't sell for what I'll offer. 4x ebitda isn't much for only 190 subs.
>> 
>> Thank you,
>> 
>> Brett A Mansfield
>> 
>> 
>> On Jan 11, 2017, at 2:14 PM, Josh Reynolds <j...@kyneticwifi.com> wrote:
>> 
>> How many subs?
>> 
>>  
>> 
>> On Jan 11, 2017 3:13 PM, "Brett A Mansfield" <li...@silverlakeinternet.com> 
>> wrote:
>> 
>> When looking at buying a competitor, I'm wondering what everyone's thought 
>> is on a price per sub? They don't do contracts and they use the litebeam 
>> hardware.
>> 
>> I'm not looking for legal advice, just wondering what all of you think is 
>> fair. This company has about a 90% take rate in the area they're in. Their 
>> plans are $20, $40, and $50/mo.
>> 
>> Thank you,
>> Brett A Mansfield

Re: [AFMUG] Price per sub?

[Josh Luthman]

I'm with Sterling, though I wouldn't go above $130k


Josh Luthman
Office: 937-552-2340
Direct: 937-552-2343
1100 Wayne St
Suite 1337
Troy, OH 45373

On Wed, Jan 11, 2017 at 7:26 PM, Josh Reynolds <j...@kyneticwifi.com> wrote:

> Just acquire, become more of a monopoly, write off all failed acquisitions
> as losses, buy out competitors, and keep a wad of cash in the pockets of
> the lobbyists you own so they can do their thing. Patent everything as fast
> as you can. Buy as many patents as you can. Find ways to get regulations
> that favor you and hurts any remaining competition. Murica.
>
> On Jan 11, 2017 3:56 PM, "Ken Hohhof" <af...@kwisp.com> wrote:
>
>> If the limiting factor is revenue, they need to get realistic.  4 years
>> of earnings for a business that has already exhausted the available market
>> potential (at least for sub count), and where infrastructure can require a
>> forklift upgrade every 3-5 years, is about as good as they will find.
>>
>>
>>
>> On the other hand, if the limiting factor is costs consuming most of the
>> revenue, the value of the business might change post acquisition.  Perhaps
>> you can cut salaries, if your existing techs can cover installs and
>> maintenance, and you no longer need to pay the owners.  Perhaps you can
>> replace their expensive bandwidth with your less expensive bandwidth.
>> Perhaps with your greater economies of scale and purchasing power, you can
>> lower their other costs, renegotiate tower leases, etc.
>>
>>
>>
>> In business school, I remember being taught this is the stuff M is
>> built on, assets that are worth more to the buyer than to the seller.
>> Although you wouldn’t know it from the deals that make the news, they seem
>> to be about getting bigger just to get bigger, with correspondingly bigger
>> executive pay.
>>
>>
>>
>>
>>
>> *From:* Af [mailto:af-boun...@afmug.com] *On Behalf Of *Brett A Mansfield
>> *Sent:* Wednesday, January 11, 2017 3:39 PM
>> *To:* af@afmug.com
>> *Subject:* Re: [AFMUG] Price per sub?
>>
>>
>>
>> There are only 190 subs. I'll have to get their financials to determine
>> ebitda since they don't even know. But if it's what I think it is then they
>> won't sell for what I'll offer. 4x ebitda isn't much for only 190 subs.
>>
>> Thank you,
>>
>> Brett A Mansfield
>>
>>
>> On Jan 11, 2017, at 2:14 PM, Josh Reynolds <j...@kyneticwifi.com> wrote:
>>
>> How many subs?
>>
>>
>>
>> On Jan 11, 2017 3:13 PM, "Brett A Mansfield" <
>> li...@silverlakeinternet.com> wrote:
>>
>> When looking at buying a competitor, I'm wondering what everyone's
>> thought is on a price per sub? They don't do contracts and they use the
>> litebeam hardware.
>>
>> I'm not looking for legal advice, just wondering what all of you think is
>> fair. This company has about a 90% take rate in the area they're in. Their
>> plans are $20, $40, and $50/mo.
>>
>> Thank you,
>> Brett A Mansfield
>>
>>

Re: [AFMUG] Price per sub?

[Josh Reynolds]

Just acquire, become more of a monopoly, write off all failed acquisitions
as losses, buy out competitors, and keep a wad of cash in the pockets of
the lobbyists you own so they can do their thing. Patent everything as fast
as you can. Buy as many patents as you can. Find ways to get regulations
that favor you and hurts any remaining competition. Murica.

On Jan 11, 2017 3:56 PM, "Ken Hohhof" <af...@kwisp.com> wrote:

> If the limiting factor is revenue, they need to get realistic.  4 years of
> earnings for a business that has already exhausted the available market
> potential (at least for sub count), and where infrastructure can require a
> forklift upgrade every 3-5 years, is about as good as they will find.
>
>
>
> On the other hand, if the limiting factor is costs consuming most of the
> revenue, the value of the business might change post acquisition.  Perhaps
> you can cut salaries, if your existing techs can cover installs and
> maintenance, and you no longer need to pay the owners.  Perhaps you can
> replace their expensive bandwidth with your less expensive bandwidth.
> Perhaps with your greater economies of scale and purchasing power, you can
> lower their other costs, renegotiate tower leases, etc.
>
>
>
> In business school, I remember being taught this is the stuff M is built
> on, assets that are worth more to the buyer than to the seller.  Although
> you wouldn’t know it from the deals that make the news, they seem to be
> about getting bigger just to get bigger, with correspondingly bigger
> executive pay.
>
>
>
>
>
> *From:* Af [mailto:af-boun...@afmug.com] *On Behalf Of *Brett A Mansfield
> *Sent:* Wednesday, January 11, 2017 3:39 PM
> *To:* af@afmug.com
> *Subject:* Re: [AFMUG] Price per sub?
>
>
>
> There are only 190 subs. I'll have to get their financials to determine
> ebitda since they don't even know. But if it's what I think it is then they
> won't sell for what I'll offer. 4x ebitda isn't much for only 190 subs.
>
> Thank you,
>
> Brett A Mansfield
>
>
> On Jan 11, 2017, at 2:14 PM, Josh Reynolds <j...@kyneticwifi.com> wrote:
>
> How many subs?
>
>
>
> On Jan 11, 2017 3:13 PM, "Brett A Mansfield" <li...@silverlakeinternet.com>
> wrote:
>
> When looking at buying a competitor, I'm wondering what everyone's thought
> is on a price per sub? They don't do contracts and they use the litebeam
> hardware.
>
> I'm not looking for legal advice, just wondering what all of you think is
> fair. This company has about a 90% take rate in the area they're in. Their
> plans are $20, $40, and $50/mo.
>
> Thank you,
> Brett A Mansfield
>
>

Re: [AFMUG] Price per sub?

[Rhys Cuff (Latrobe I.T)]

I think to myself I spend $200 on a new install so If I sold it would need to 
be worth at least that.

 

I’m in Australia, I have 2300 sub’s and wouldn’t sell for less than 200 a sub

 

 

 

From: Af [mailto:af-boun...@afmug.com] On Behalf Of Travis Johnson
Sent: Thursday, January 12, 2017 10:40 AM
To: af@afmug.com
Subject: Re: [AFMUG] Price per sub?

 

I always looked at these type of things as "How much could I spend in 
advertising and giving away free months of service in that area to pick up a 
majority of the customers anyway?" :)

If they are at $20/month, you could give customers 6 months free to switch to 
you, and you gain a customer for $120. People love to switch when they can get 
service for free.

Travis



On 1/11/2017 2:39 PM, Brett A Mansfield wrote:

There are only 190 subs. I'll have to get their financials to determine 
ebitda since they don't even know. But if it's what I think it is then they 
won't sell for what I'll offer. 4x ebitda isn't much for only 190 subs.

Thank you, 

Brett A Mansfield


On Jan 11, 2017, at 2:14 PM, Josh Reynolds <j...@kyneticwifi.com> wrote:

How many subs?

 

On Jan 11, 2017 3:13 PM, "Brett A Mansfield" 
<li...@silverlakeinternet.com> wrote:

When looking at buying a competitor, I'm wondering what 
everyone's thought is on a price per sub? They don't do contracts and they use 
the litebeam hardware.

I'm not looking for legal advice, just wondering what all of 
you think is fair. This company has about a 90% take rate in the area they're 
in. Their plans are $20, $40, and $50/mo.

Thank you,
Brett A Mansfield

 

Re: [AFMUG] Price per sub?

[Travis Johnson]

I always looked at these type of things as "How much could I spend in 
advertising and giving away free months of service in that area to pick 
up a majority of the customers anyway?" :)


If they are at $20/month, you could give customers 6 months free to 
switch to you, and you gain a customer for $120. People love to switch 
when they can get service for free.


Travis


On 1/11/2017 2:39 PM, Brett A Mansfield wrote:
There are only 190 subs. I'll have to get their financials to 
determine ebitda since they don't even know. But if it's what I think 
it is then they won't sell for what I'll offer. 4x ebitda isn't much 
for only 190 subs.


Thank you,
Brett A Mansfield

On Jan 11, 2017, at 2:14 PM, Josh Reynolds > wrote:



How many subs?

On Jan 11, 2017 3:13 PM, "Brett A Mansfield" 
> 
wrote:


When looking at buying a competitor, I'm wondering what
everyone's thought is on a price per sub? They don't do contracts
and they use the litebeam hardware.

I'm not looking for legal advice, just wondering what all of you
think is fair. This company has about a 90% take rate in the area
they're in. Their plans are $20, $40, and $50/mo.

Thank you,
Brett A Mansfield

Re: [AFMUG] Price per sub?

[Ken Hohhof]

Yeah, operating a hobby WISP is like restoring a muscle car.  I think Jay Leno 
once described it along the lines of "buy a car for $5,000, put $20,000 into 
restoring it, and sell it for $10,000".

At least with cars, if you're using it as a trade-in, the dealer can usually 
play games with the paperwork to avoid having to tell you that you're under 
water on your car loan and are paying them to take it off your hands.


-Original Message-
From: Af [mailto:af-boun...@afmug.com] On Behalf Of Adam Moffett
Sent: Wednesday, January 11, 2017 4:31 PM
To: af@afmug.com
Subject: Re: [AFMUG] Price per sub?

I see 190 customers and a $20/month plan.  I don't think $20/month could be 
profitable if you built a serious network.  I know I don't know anything about 
the situation, but my WAG based on these two data points is they're either 
unprofitable or built like a house of cards.

Like anything it's worth what you're willing to pay.  You've got lots of good 
suggestions here already for coming up with a number.  I would just add that 
you should walk through and see if what they have is actually valuable to you.  
Maybe they'd have to pay you to take it away.



-- Original Message --
From: "Sterling Jacobson" <sterl...@avative.net>
To: "af@afmug.com" <af@afmug.com>
Sent: 1/11/2017 5:22:00 PM
Subject: Re: [AFMUG] Price per sub?

>With only 190 customers it's really just a negotiation.
>
>I bet they have a figure in mind already.
>
>Just ask them.
>
>Why are they selling?
>
>If their gross sales is around $7k a month, then maybe $70k to $140k 
>total.
>
>That would also highly depend on their operations and costs/location 
>and market as well.
>
>Could be worth a lot less if their net is only $1k a month.
>
>-Original Message-
>From: Af [mailto:af-boun...@afmug.com] On Behalf Of Brett A Mansfield
>Sent: Wednesday, January 11, 2017 2:13 PM
>To: af@afmug.com
>Subject: [AFMUG] Price per sub?
>
>When looking at buying a competitor, I'm wondering what everyone's 
>thought is on a price per sub? They don't do contracts and they use the 
>litebeam hardware.
>
>I'm not looking for legal advice, just wondering what all of you think 
>is fair. This company has about a 90% take rate in the area they're in.
>Their plans are $20, $40, and $50/mo.
>
>Thank you,
>Brett A Mansfield

Re: [AFMUG] Price per sub?

[Adam Moffett]

I see 190 customers and a $20/month plan.  I don't think $20/month could 
be profitable if you built a serious network.  I know I don't know 
anything about the situation, but my WAG based on these two data points 
is they're either unprofitable or built like a house of cards.


Like anything it's worth what you're willing to pay.  You've got lots of 
good suggestions here already for coming up with a number.  I would just 
add that you should walk through and see if what they have is actually 
valuable to you.  Maybe they'd have to pay you to take it away.




-- Original Message --
From: "Sterling Jacobson" <sterl...@avative.net>
To: "af@afmug.com" <af@afmug.com>
Sent: 1/11/2017 5:22:00 PM
Subject: Re: [AFMUG] Price per sub?


With only 190 customers it's really just a negotiation.

I bet they have a figure in mind already.

Just ask them.

Why are they selling?

If their gross sales is around $7k a month, then maybe $70k to $140k 
total.


That would also highly depend on their operations and costs/location 
and market as well.


Could be worth a lot less if their net is only $1k a month.

-Original Message-
From: Af [mailto:af-boun...@afmug.com] On Behalf Of Brett A Mansfield
Sent: Wednesday, January 11, 2017 2:13 PM
To: af@afmug.com
Subject: [AFMUG] Price per sub?

When looking at buying a competitor, I'm wondering what everyone's 
thought is on a price per sub? They don't do contracts and they use the 
litebeam hardware.


I'm not looking for legal advice, just wondering what all of you think 
is fair. This company has about a 90% take rate in the area they're in. 
Their plans are $20, $40, and $50/mo.


Thank you,
Brett A Mansfield

Re: [AFMUG] Price per sub?

[Sterling Jacobson]

With only 190 customers it's really just a negotiation.

I bet they have a figure in mind already.

Just ask them.

Why are they selling?

If their gross sales is around $7k a month, then maybe $70k to $140k total.

That would also highly depend on their operations and costs/location and market 
as well.

Could be worth a lot less if their net is only $1k a month.

-Original Message-
From: Af [mailto:af-boun...@afmug.com] On Behalf Of Brett A Mansfield
Sent: Wednesday, January 11, 2017 2:13 PM
To: af@afmug.com
Subject: [AFMUG] Price per sub?

When looking at buying a competitor, I'm wondering what everyone's thought is 
on a price per sub? They don't do contracts and they use the litebeam hardware. 

I'm not looking for legal advice, just wondering what all of you think is fair. 
This company has about a 90% take rate in the area they're in. Their plans are 
$20, $40, and $50/mo. 

Thank you,
Brett A Mansfield

Re: [AFMUG] Price per sub?

[Ken Hohhof]

If the limiting factor is revenue, they need to get realistic.  4 years of 
earnings for a business that has already exhausted the available market 
potential (at least for sub count), and where infrastructure can require a 
forklift upgrade every 3-5 years, is about as good as they will find.

 

On the other hand, if the limiting factor is costs consuming most of the 
revenue, the value of the business might change post acquisition.  Perhaps you 
can cut salaries, if your existing techs can cover installs and maintenance, 
and you no longer need to pay the owners.  Perhaps you can replace their 
expensive bandwidth with your less expensive bandwidth.  Perhaps with your 
greater economies of scale and purchasing power, you can lower their other 
costs, renegotiate tower leases, etc.

 

In business school, I remember being taught this is the stuff M is built on, 
assets that are worth more to the buyer than to the seller.  Although you 
wouldn’t know it from the deals that make the news, they seem to be about 
getting bigger just to get bigger, with correspondingly bigger executive pay.

 

 

From: Af [mailto:af-boun...@afmug.com] On Behalf Of Brett A Mansfield
Sent: Wednesday, January 11, 2017 3:39 PM
To: af@afmug.com
Subject: Re: [AFMUG] Price per sub?

 

There are only 190 subs. I'll have to get their financials to determine ebitda 
since they don't even know. But if it's what I think it is then they won't sell 
for what I'll offer. 4x ebitda isn't much for only 190 subs.

Thank you,

Brett A Mansfield


On Jan 11, 2017, at 2:14 PM, Josh Reynolds <j...@kyneticwifi.com 
<mailto:j...@kyneticwifi.com> > wrote:

How many subs?

 

On Jan 11, 2017 3:13 PM, "Brett A Mansfield" <li...@silverlakeinternet.com 
<mailto:li...@silverlakeinternet.com> > wrote:

When looking at buying a competitor, I'm wondering what everyone's thought is 
on a price per sub? They don't do contracts and they use the litebeam hardware.

I'm not looking for legal advice, just wondering what all of you think is fair. 
This company has about a 90% take rate in the area they're in. Their plans are 
$20, $40, and $50/mo.

Thank you,
Brett A Mansfield

Re: [AFMUG] Price per sub?

[Brett A Mansfield]

There are only 190 subs. I'll have to get their financials to determine ebitda 
since they don't even know. But if it's what I think it is then they won't sell 
for what I'll offer. 4x ebitda isn't much for only 190 subs.

Thank you,
Brett A Mansfield

> On Jan 11, 2017, at 2:14 PM, Josh Reynolds  wrote:
> 
> How many subs?
> 
>> On Jan 11, 2017 3:13 PM, "Brett A Mansfield"  
>> wrote:
>> When looking at buying a competitor, I'm wondering what everyone's thought 
>> is on a price per sub? They don't do contracts and they use the litebeam 
>> hardware.
>> 
>> I'm not looking for legal advice, just wondering what all of you think is 
>> fair. This company has about a 90% take rate in the area they're in. Their 
>> plans are $20, $40, and $50/mo.
>> 
>> Thank you,
>> Brett A Mansfield

Re: [AFMUG] Price per sub?

[Ken Hohhof]

I’ve never understood why the value is supposed to be so much higher if they 
sign customers to contracts.  I would actually feel better about “customers so 
happy they have 90% market penetration without contracts” than “customers hate 
them but stay because they’re stuck in contracts”.  Also, it might be a fight 
to enforce contracts after an ownership change, no matter what the contract 
says, if customers are really itching for an excuse to get out.

 

Like Chuck says, multiple of EBITDA.  Normally might want historic numbers on 
churn to assess risk, but it sounds like they don’t have much churn.

 

The one downside of 90% take rate is not much potential for organic growth, 
unless there’s a housing boom.

 

 

From: Af [mailto:af-boun...@afmug.com] On Behalf Of Chuck McCown
Sent: Wednesday, January 11, 2017 3:16 PM
To: af@afmug.com
Subject: Re: [AFMUG] Price per sub?

 

4x ebitda

 

From: Josh Reynolds 

Sent: Wednesday, January 11, 2017 2:14 PM

To: af@afmug.com <mailto:af@afmug.com>  

Subject: Re: [AFMUG] Price per sub?

 

How many subs?

 

On Jan 11, 2017 3:13 PM, "Brett A Mansfield" <li...@silverlakeinternet.com 
<mailto:li...@silverlakeinternet.com> > wrote:

When looking at buying a competitor, I'm wondering what everyone's thought is 
on a price per sub? They don't do contracts and they use the litebeam hardware.

I'm not looking for legal advice, just wondering what all of you think is fair. 
This company has about a 90% take rate in the area they're in. Their plans are 
$20, $40, and $50/mo.

Thank you,
Brett A Mansfield

Re: [AFMUG] Price per sub?

[Chuck McCown]

4x ebitda

From: Josh Reynolds 
Sent: Wednesday, January 11, 2017 2:14 PM
To: af@afmug.com 
Subject: Re: [AFMUG] Price per sub?

How many subs?

On Jan 11, 2017 3:13 PM, "Brett A Mansfield" <li...@silverlakeinternet.com> 
wrote:

  When looking at buying a competitor, I'm wondering what everyone's thought is 
on a price per sub? They don't do contracts and they use the litebeam hardware.

  I'm not looking for legal advice, just wondering what all of you think is 
fair. This company has about a 90% take rate in the area they're in. Their 
plans are $20, $40, and $50/mo.

  Thank you,
  Brett A Mansfield

Re: [AFMUG] Price per sub?

[Josh Reynolds]

How many subs?

On Jan 11, 2017 3:13 PM, "Brett A Mansfield" 
wrote:

> When looking at buying a competitor, I'm wondering what everyone's thought
> is on a price per sub? They don't do contracts and they use the litebeam
> hardware.
>
> I'm not looking for legal advice, just wondering what all of you think is
> fair. This company has about a 90% take rate in the area they're in. Their
> plans are $20, $40, and $50/mo.
>
> Thank you,
> Brett A Mansfield
>

[AFMUG] Price per sub?

[Brett A Mansfield]

When looking at buying a competitor, I'm wondering what everyone's thought is 
on a price per sub? They don't do contracts and they use the litebeam hardware. 

I'm not looking for legal advice, just wondering what all of you think is fair. 
This company has about a 90% take rate in the area they're in. Their plans are 
$20, $40, and $50/mo. 

Thank you,
Brett A Mansfield