Will you have to open your books to the government if you take the money? -RickG
On Tue, May 26, 2009 at 4:57 PM, Tom DeReggi <wirelessn...@rapiddsl.net> wrote: > Scott, > > Here is the best advice I can give you. Rules are not published and nobody > knows what will be the criteria for qualification or for actually winning > the grants, and I'm not sure NTIA will really know either, even after they > publish rules. I think the first allocation of funds will be somewhat a > science project to see what type of applicants and applications are > receieved. > > What you need to do is.... > > 1) identify the areas that you'd like to serve with grant money, if you got > some. Don't overly plan, it will take to much time. Use some forward > thinking :-) > 2) Come up with a plan of how much additional cash you'd need beyond grant > funds, to acheive the plan, if you won a grant for those areas. > 3) Don't expect anyone to give you a magic formula before the NOFA and rules > are released from NTIA/RUS, because it will be useless and inaccurate. > 4) Don't expect anyone to give you a magic formula after teh NOFA and rules > a released from NTIA/RUS, because by then there won't be anymore time left, > and everyone will be scrambling to get their grants in with the SHORT > deadline. > > The Legislative Committee is closely monitoring the progress regarding > notices and comments released by NTIA/RUS as they are released. WISPA's > Membership will be notified of this information and where to read details > when it is released. > > In the meantime, you'll need to gamble, and bet on what you think will be > the future rules. WISPs will be fighting against the grain so to speak, > because our typical profile will not match the typical profile of the > targeted awardee. But the good news is that NTIA/RUS are simplathetic to > WISPs, and if they gave a grant to every pre-existing WISP, it really > wouldn't be all that much money comparatively, to what is available. > > The biggest barrier is the reality that its most feasible for NTIA/RUS to > award large grants, just because the sheer volume of it. However, I know for > a fact, they are trying to come up with ways to include WISPs, within > reality. Maybe we'll get lucky, and they'll allow smaller projects, that > are well written, and justified. My advise is to do all the business case > plannign a head of time, so you are rteady to hit the ground running, when > the NOFA is released. Remember, they have not stated that there will be any > reward for deploying cheaper. But it is a listed goal, to seek plans that > incourage additional investments. Again, that is a barrier, for WISPs that > have already invested all their personal resources and capitol, and to > attrack additional investors that will bring in operating cash, without the > WISP giving their business away. > > Just remember the largest reason small WISPs have not received grants is > that they never applied. > > Tom DeReggi > RapidDSL & Wireless, Inc > IntAirNet- Fixed Wireless Broadband > > > ----- Original Message ----- > From: "Scottie Arnett" <sarn...@info-ed.com> > To: "WISPA General List" <wireless@wispa.org> > Sent: Monday, May 25, 2009 12:27 AM > Subject: Re: [WISPA] Broadband Stimulus Allocations? > > > >>Even here, I eventually expect >>competition to enter my market. It would be nice to know the "secret >>sauce" so I can be better prepared for that day. > > What has WISPA came up with to help WISP's get in on the broadband stimulus > package? Throw me some bait? As I promised before, my membership fees(after > tax season) are sitting here... give me something to bite. Not being an A**, > but I belonged to one place(not WISPA), but didn't get much out of it. > > I did receive an invitation from Double Radius to help me get in on this. > Just wanting to know if WISPA got anything going on, before I jump on that > opportunity? One of my regular suppliers that I trust. > > Scottie > > ---------- Original Message ---------------------------------- > From: RickG <rgunder...@gmail.com> > Reply-To: WISPA General List <wireless@wispa.org> > Date: Sun, 24 May 2009 13:00:41 -0400 > >>I find the "secret sauce" of converting a customer a very interesting >>subject as well. For the most part nearly every WISP I have run had a >>monopoly. The ones that didnt had a niche of some kind. My first >>owner/operator venture was not good because it was in a highly >>competitive market and I could not overcome the "go with the big >>company" mentality. My customers said I gave great service but even >>they succumbed to price. Therefore, I sold that and went back to the >>monopoly world (read boondocks). Even here, I eventually expect >>competition to enter my market. It would be nice to know the "secret >>sauce" so I can be better prepared for that day. >> >>-RickG >> >>On Sun, May 24, 2009 at 9:33 AM, Charles Wu <c...@cticonnect.com> wrote: >>>>All I can say is if you are "holding back" on doing more installs because >>>>you can't afford it, you need to find some financing and get installing. >>>>Once that customer is installed with something else (DSL, >Cable, >>>>competitor), it's 10x harder to get them to switch to you. You have to >>>>get the customers NOW. >>> >>> Now that's a more interesting discussion >>> >>> What's the business plan for customer acquisition? Do you still keep >>> building out into unserved areas (e.g., "first to market")? >>> >>> At this point, I would guess that most areas have competition - so then >>> is the business model based upon arbitraging attrition and moves? >>> >>> e.g., the average American moves every 7 years - so that means 12% of the >>> population is available "yearly" as a "new customer" >>> >>> So, say you have 5,000 customers in a market of 100,000 >>> >>> You'll churn 1% / month (50) - but there's a market of "new adds" of >>> 1,000 customers every month due to just organic moving activity...so >>> assuming 20% market share, market equilibrium would be 20,000 subscribers >>> >>> Not necessarily a bad thing =) >>> >>> That said, I'd be curious to talk about "secret sauce" methods to convert >>> customers from the competition >>> >>> -Charles >>> >>> >>> >>> Charles Wu wrote: >>> >>> Hi Scott, >>> >>> >>> >>> Regarding debt...I've found that there's a "scale inflection point" in >>> running a WISP (or any business for the matter) that needs to be >>> reached -- the main purpose for taking on debt (because due to interest, >>> you end up paying more in the longer term instead of buying cash), is to >>> accelerate growth so one can progress beyond this point >>> >>> >>> >>> e.g., if you can organically fund 30 new installs a month with cash, if >>> you take on debt, you could leverage yourself and now do 100 installs / >>> month >>> >>> >>> >>> Now, from a business perspective -- in looking at the WISP >>> >>> >>> >>> As a stand-alone sustainable business -- it costs a minimum of about $30k >>> / month to operate a small WISP -- now, I'll argue that that $30k/month >>> in operations remains relatively constant and whether it's supporting >>> 300, 800 or 1500 customers -- however, at 300 customers, the business is >>> bleeding cash...at 800 customers the business is just about at a >>> break-even, and at 1500 customers, the business is a cash machine >>> >>> >>> >>> -Charles >>> >>> >>> >>> -----Original Message----- >>> >>> From: wireless-boun...@wispa.org<mailto:wireless-boun...@wispa.org> >>> [mailto:wireless-boun...@wispa.org] On Behalf Of Scott Reed >>> >>> Sent: Saturday, May 23, 2009 4:20 PM >>> >>> To: WISPA General List >>> >>> Subject: Re: [WISPA] Quesiton on Funding / Financing / Capital >>> Availability >>> >>> >>> >>> So I will take option 4 from a previous post since Travis made the point. >>> >>> "Up to 60 months with $1 buyout is the same as a 5 year bank loan." >>> >>> I want to run debt free as soon a possible. That being the case I don't >>> >>> lease and have not leased to keep debt down. I do have a start-up loan >>> >>> that is being paid on a little slower than I would like, but we have >>> >>> paid off 1/2 of it in < 5 years and based on our payments, we are cash >>> >>> flow positive. >>> >>> Granted, my WISP is a lot smaller than many that post here and our >>> >>> growth rate is small, but some of that is managing growth to stay >>> >>> cash-flow positive. >>> >>> I have seen several companies die because they became cash rich, but >>> >>> still could not cover the debt. >>> >>> >>> >>> Travis Johnson wrote: >>> >>> >>> >>> The banks can sell a car with little effort. They already have >>> >>> relationships with dealers and auctions. And often, if the consumer's >>> >>> credit is questionable, the dealer will guarantee to take the car back >>> >>> if the loan defaults. >>> >>> >>> >>> Who is going to buy a $10,000 radio that has been repo'd? Even for >>> >>> $5k, I wouldn't touch it. I'd buy a new radio with warranty, that I >>> >>> know is good and hasn't been fried or broken. >>> >>> >>> >>> The banks will never loan on the equipment alone. There is no security >>> >>> there... but again, why do you need a bank loan for equipment when you >>> >>> can just lease it and get the same results? Up to 60 months with $1 >>> >>> buyout is the same as a 5 year bank loan. What's the difference? >>> >>> >>> >>> Travis >>> >>> Microserv >>> >>> >>> >>> Tom DeReggi wrote: >>> >>> >>> >>> Maybe when talking about CPE. >>> >>> >>> >>> But what about when one is talking about a $10,000 Part101 radio? >>> >>> >>> >>> Just like a car, all that the lender should need is to "hold the title" >>> of >>> >>> the radio until paid off, and get a down payment of $2000 to cover the >>> cost >>> >>> of tower climber/repo man, and a signed letter of authorization from >>> lanlord >>> >>> stating the location of the tower gear is installed on and they >>> acknowledge >>> >>> that the gear is not abandoned equipment. (So it does not automatically >>> >>> become property of landlord in 4 months, and teh landlord knows the >>> >>> equipment owner has first rights to the gear). >>> >>> >>> >>> Think about it... Wouldn't repo costs be reduced when the repo man knows >>> >>> exactly where to find the radio? A car can easilly be relocated and >>> >>> hard-to-find, when the owner skips town. >>> >>> Plus the home likely has an owner with a shot gun or a big dog, which the >>> >>> tower/MTU likely does not. The MTU building might even have a security >>> >>> guard to escort teh lender safely to the roof :-) >>> >>> >>> >>> >>> >>> Tom DeReggi >>> >>> RapidDSL & Wireless, Inc >>> >>> IntAirNet- Fixed Wireless Broadband >>> >>> >>> >>> >>> >>> ----- Original Message ----- >>> >>> From: "jp" <j...@saucer.midcoast.com><mailto:j...@saucer.midcoast.com> >>> >>> To: "WISPA General List" <wireless@wispa.org><mailto:wireless@wispa.org> >>> >>> Sent: Friday, May 22, 2009 11:13 AM >>> >>> Subject: Re: [WISPA] Quesiton on Funding / Financing / Capital >>> Availability >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> In a worse case scenario, a car is probably considerably easier to repo >>> >>> than the antenna on my roof and radio in my attic. And the car would be >>> >>> worth a magnitude more money. The installed infrastructure is worthless >>> >>> if it costs a huge amount to get to it. >>> >>> >>> >>> On Thu, May 21, 2009 at 07:27:09PM -0400, Tom DeReggi wrote: >>> >>> >>> >>> >>> >>> I've never found a lender willing to lend against using the in-place used >>> >>> equipment as colladeral. >>> >>> It is the biggest double standard. >>> >>> I find it highly ironic that they'll use a car for colladeral that looses >>> >>> 50% of its value the day it leaves the lot, and has a rate of failure and >>> >>> risk of damage higher than just about any product on the market, and it >>> >>> has >>> >>> a huge cash burn (gas :-). but yet lendors won't put equivellent value on >>> >>> wireless gear, that holds its value, Ebay boasting easilly 50% after 3-4 >>> >>> years of use, even after fully depreciated. >>> >>> I'll never understand the lending market. >>> >>> >>> >>> Tom DeReggi >>> >>> RapidDSL & Wireless, Inc >>> >>> IntAirNet- Fixed Wireless Broadband >>> >>> >>> >>> >>> >>> ----- Original Message ----- >>> >>> From: <rea...@muddyfrogwater.us><mailto:rea...@muddyfrogwater.us> >>> >>> To: "WISPA General List" <wireless@wispa.org><mailto:wireless@wispa.org> >>> >>> Sent: Thursday, May 21, 2009 1:55 PM >>> >>> Subject: Re: [WISPA] Quesiton on Funding / Financing / Capital >>> >>> Availability >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> Answers in-line. >>> >>> >>> >>> >>> >>> ++++++++++++++++++++++++++++++++ >>> >>> <insert witty tagline here> >>> >>> >>> >>> ----- Original Message ----- >>> >>> From: "Charles Wu" <c...@cticonnect.com><mailto:c...@cticonnect.com> >>> >>> To: "WISPA General List" <wireless@wispa.org><mailto:wireless@wispa.org> >>> >>> Sent: Thursday, May 21, 2009 8:49 AM >>> >>> Subject: [WISPA] Quesiton on Funding / Financing / Capital Availability >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> With all the hype being generated by the stimulus bill, we have been >>> >>> approached by a multitude of third party financial organizations that >>> >>> have >>> >>> a renewed interest in potentially financing rural broadband...now, >>> >>> specifically, for WISPs, in the past, equipment leasing has been a >>> >>> very >>> >>> popular option for financing, but in looking at our numbers over the >>> >>> past >>> >>> year, I've noticed a marked decline in the amount of leasing that we >>> >>> do - >>> >>> that said, I have the following questions for the listserv about >>> >>> financing >>> >>> >>> >>> Assuming that WISPs are still need to buy equipment... >>> >>> >>> >>> 1. Are you able to just purchase equipment out of cash-flow >>> >>> organically >>> >>> generated from operations >>> >>> >>> >>> >>> >>> Other than originally starting with our own personal seed money, that's >>> >>> what >>> >>> we've done. >>> >>> >>> >>> >>> >>> >>> >>> 2. Have you gone to more traditional forms of money (e.g., bank / SBA >>> >>> / >>> >>> RUS loans)? >>> >>> >>> >>> >>> >>> I could not qualify for any of them. >>> >>> >>> >>> >>> >>> >>> >>> 3. Are you doing more vendor leasing programs (e.g., Motorola 3% >>> >>> financing >>> >>> deal) >>> >>> >>> >>> >>> >>> Never sought any. >>> >>> >>> >>> >>> >>> >>> >>> 4. Have you not been able to borrow money due to the credit crunch >>> >>> (e.g., >>> >>> not deploying as aggressively) >>> >>> >>> >>> >>> >>> My corporation hasn't ever been able to obtain hard money credit. In >>> >>> fact, the "credit crunch" start last Fall raised my "30+ day past due" >>> >>> amount from a piddly $1200 to at one time to almost $13,000 in just >>> >>> four >>> >>> months. That almost put us under, and we're still barely scraping by >>> >>> until >>> >>> our seasonally variable cash flow revives come August, with still >>> >>> several >>> >>> thousand on the books that's very slowly getting chipped away at. >>> >>> >>> >>> >>> >>> >>> >>> 5. Are you holding off on deployments because of the economy >>> >>> >>> >>> >>> >>> No, we're holding off due to lack of cash flow. We have plenty of >>> >>> people >>> >>> waiting for us to build infrastructure out to them. >>> >>> >>> >>> >>> >>> >>> >>> 6. Have you gone to Agility...<cough> Louie the loanshark =) >>> >>> >>> >>> >>> >>> After much discussion, being some of the first people Agility >>> >>> contacted, >>> >>> we >>> >>> have not done any business with them. In my estimation, they wanted >>> >>> control over our business and day to day decisions, which we concluded >>> >>> was >>> >>> both unwarranted and unwise. >>> >>> >>> >>> >>> >>> >>> >>> Or any other thoughts / comments on this topic? >>> >>> >>> >>> >>> >>> >>> >>> WISP equipment is not really a "commodity" in that there is almost no >>> >>> market >>> >>> for it outside of the "maker-vendor" relationship. Other than Ebay, >>> >>> and a >>> >>> couple of people who attempt to do it piecemeal, there is no "market" >>> >>> which >>> >>> stabilizes the value of used equipment, making them a commodity you can >>> >>> borrow against. >>> >>> >>> >>> Perhaps it would be more useful, if vendors had the ability to get >>> >>> capital >>> >>> and create stable working and short term credit relationships with >>> >>> their >>> >>> buyers, kind of like the used car market. >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> -Charles >>> >>> >>> >>> >>> >>> -------------------------------------------------------------------------------- >>> >>> WISPA Wants You! 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