In October 2015, Servpac President and Founder Richard Zheng sat down with ThinkTech Hawaii’s Jay Fidell to discuss CLECs and Clearwire leaving the Hawaii market. Ready the full interview below:
Jay Fidell
We’re back with the final show of Today Tuesday. We have Richard Zheng with us. He’s with Servpac. Servpac is a CLEC and we’re going to explain that later. We are going to call this ThinkTech Talks. We’re going to call this the life of a CLEC. Welcome to the show, Richard.
Richard Zheng
Thank you, glad to be here.
Jay Fidell
Good to have you here. So what is a CLEC anyways – so we know where you fit in the marketplace of telecommunications in Hawaii?
Richard Zheng
Well, CLEC stands for Competitive Local Exchange Carrier. This is compared to Incumbent Local Exchange Carrier, which in Hawaii is HawaiianTel. So we provide telecom services and our three products – VoIP, Internet, and Cloud. So kind of competing with HawaiianTel.
Jay Fidell
OK. So you’re protected. I mean, otherwise they would push you out of the market. So you have a sort of a little slot in the market between the ILEC and the public.
Richard Zheng
Right, so being a CLEC, we have some advantages. You know, we can use some of the ILEC facilities to provide our services. But, ILECs are not there to help us grow. So we have to basically build our own business model to provide innovative services.
Jay Fidell
OK. And so when you say you buy certain facilities from them, what are those facilities that you buy?
Richard Zheng
Several things. We can use the, you know, like facility, for example. They are you know, they have lots of CEOs. So we can co-locate our you come in inside of less than half an hour. So when I say we’re the largest CLEC in Hawaii, because not many see that collapse in Hawaii. So we have 19 CEOs. We have facility, OK, co-location. So we put this land there. We put around her there so we can provide other services that Hogan-Howe cannot provide.
OK. Now, I want to know the history of this, because I remember these terms from 10 years ago, maybe 20 years. It was part of the Telecommunications Act of 1996?
Richard Zheng
Exactly. Yes.
Jay Fidell
A minimum point of entry was all the rage. And everybody thought that would solve the problem for the business community. It didn’t do it. But we had CLECs and ILECs defined in the statutes that time. And there were a lot of people wanted to get into that business. But now you’re the last man standing there.
Richard Zheng
Exactly.
Richard Zheng
So what happened? Initially lots of CLEC wanted to get into the market. They figure they can buy services wholesale from HawaiianTel or from ILEC and then resell it to make some money and apparently it’s not a viable model. That’s why you saw a lot of CLECs collapse or bought out or, you know, disappear. So we became a CLEC in 2011. Our model is a little bit different from traditional, you know, select models.
Jay Fidell
What is the difference?
Richard Zheng
Let me give you a little big history about the company. The company started in 2004. So we provide VoIP services. Voice Over IP, that’s nothing to do with CLEC, right? Fast-forward to 2011, we figured we need to provide better Internet services because without reliable good Internet, the VoIP service cannot go very well. So we became a CLEC. Then, we’re not just selling bandwidth. You know, we’re not selling something that HawaiianTel sells to the market. We need to be providing other services.
Jay Fidell
You wouldn’t be able to survive you just reselling exactly what they do. You know there will be no profit.
Richard Zheng
Exactly. So one of the services we provide is an EFM. Traditionally, HawaiianTel uses this copper cable to provide DSL services. So, actually, we go a step further. There are the T1s – used to be gold standard and very fast. Right now it’s like nothing, right? So there’s a next generation T1 called an EFM. It has multiple cables that can push faster speed. So with this, we can give you up to 250 mbs with copper wires. So you know, copper wires are variable everywhere. With this service, we can provide a lot of places with no fiber or takes very long to build a fiber. We can keep people service like right away.
Jay Fidell
Oh, let’s dwell on that for a minute. It is very interesting because everything you know, as you say, things are moving way beyond T1. How fast was T1?
Richard Zheng
T1 is 1.5 mbs, so what’s nice about T1 is the symmetrical bandwidth. Right now you see lots of other internet service in the market like DSL, cable services. They are asymmetrical.
Jay Fidell
So there’s only once one direction?
Richard Zheng
Right, downloads are very fast while uploads are very slow. It’s great for consumers. Customers, they just go to YouTube and Netflix. They need to download it but they don’t need a big upload. For business, you need a big upload, you know? Right.
Jay Fidell
We do, I can tell you that. We weren’t doing video.
Richard Zheng
Exactly, all this content. Now people go to the cloud. You know, they go to Office 365 or other things. And, people backup data. right? They produce a lot of data. Also remote workers need to access the data in the office. So you really need a big upload. These asymmetrical services are designed for residential, not for businesses.
Jay Fidell
OK. So you say the successor to the T1 is called EFM?
Richard Zheng
Yeah, it’s not listed in this brochure.
Jay Fidell
Okay, this is your brochure. This is Richard’s brochure. We’re going to talk about some of the things in here. OK, it’s called what then?
Richard Zheng
EFM, Ethernet first mile. So, it has two big advantages. First, the speed is a lot faster. And the second one, is you can bounce the multiple cables and give you multiple high speeds. It’s like a building a freeway. Four lanes not enough? Build eight lanes.
Jay Fidell
Bonding. This is very important, and I want to digress on bonding. There’s so much here, Richard. We’re going to learn a lot today. You know, one of the technologies that has fascinated Think Tech is the bonding technology. You know why? Because first, the Israelis did it. They bonded a number of cell phones together in a backpack. OK, you take your signal off a camera and put it through the bonding technology. Now, this little backpack affair, which is not cheap, you know, is communicating with multiple cell phone companies and getting very high speed based on cell phone signals. Which is, you know, much more ubiquitous than wireless. Wireless is not everywhere, but cell phone signal is everywhere. And if you bond a number of cell phone signals, you get very high speed, which means you can send camera signals, video and audio wherever you are with any cell phone signal. This is quite remarkable. And we went on Ford Island a few months ago. It was the celebration of the 70th anniversary of Hiroshima. And there were there were cameramen there who were broadcasting live to New York using this bonding technology. And you can buy it. I mean, it’s available vintage photo and other places. It’s not cheap, but there you go. So bonding is to us very important. So talk more about bond.
Richard Zheng
OK, so you had a very good point in bonding. It can give you more capacity. You can send a faster speed. Another big benefit of bonding is redundancy. It’s like a freeway – you have four or eight lanes. One lane is blocked, and say one cable is bad. You still have the rest of the cable running. But for most users, they couldn’t even tell. Oh, one of the cables is down or having trouble. But for us, we monitor all the lanes in real time. So we know, oh, this one lane down, automatically this lane is taken out our service. So we can look at it, see what’s the problem fix it and Put it back in the service without any user interaction. You automate the whole thing.
Jay Fidell
You also said that you can get a signal of 250 mb/s on copper. Now that’s very interesting because there’s a lot of copper wire out there that isn’t being used for broadband. So you have a huge repository of a highway that you can use where maybe the other guy can’t use it. How do you do that? What’s the technology?
Richard Zheng
EFM is the technology. So it has been deployed for more than four years. It’s a really stable technology. We have lots of customers using this. And you know, we deploy fiber, but it takes longer and it’s very expensive. So if people need the fast speeds right now, we can give it to them.
Jay Fidell
Yeah, so instead of having waiting for fiber to come to your building or your neighborhood, you just use the existing copper wire and put boxes on both ends. You put the boxes in and then you have EFM technology at 250 mb/s. That’s very fast. We’re going to talk about speeds as we come back from this break Richard. It’s Richard Zheng. He’s with Servpac. We’re going to find out what they do, how they do it, and all the smart things they do. Finding their little niche in the market as a CLEC. It used to be old fashioned, but it’s not old fashioned anymore.
Richard Zheng
It couldn’t survive with old fashioned.
Jay Fidell
We’ll be right back after this break.
Jay Fidell
We’re back live. We’re here on a given Tuesday afternoon with Richard Zheng. He is with Servpac, and Servpac is a CLEC. Now, that’s pretty impressive – 250 mbs. And you can probably do that cheaper because you never had to spend any money on the fiber, am I right?
Yeah. There are a lot of things we do to make the cost lower. So I give you one example. Traditionally, when you program a new circuit, you have to log into all of these devices. Logging system, termination device, routers, switches – all the programs. What we did was we made this automated, talk about automation. It’s really easy and we built a web interface. Any technician can go there. They just drag and drop the I.P. address into the circuit, phone number in the circuit, click a button. It generates and configure a script. Then click another button in the center of the command to all of these devices programmed for you. So with this, not only is the cost lower so can pass the cost saving to the customers, but less errors. You can only drag and drop on the available IP address to the circuit. It’s quality.
Jay Fidell
So am I right? Physically, though, you have access. By virtue of your status as a CLEC to the copper wire. You can say that you want to connect on the copper wire and sell services over that copper wire to this business customer. I guess it’s mostly business.
OK. And then you wind up putting a little box on one end. And maybe a little box on the other end. Right. Right. We put a little box that customer side, but on the CO – the central office – we put a DSLAM. This is a big box with DC power and building redundancy. Lots of things that you know – bells and whistles – give us that capability of doing all these things.
Jay Fidell
And this gives a whole new meaning to copper. Copper would be really old fashioned. With this, you get pretty good speed. Nobody has that speed. Well, very few people have that speed. And you’d pay more for that speed if you were using fiber because you have to put in fiber. It’s a big capital investment.
Richard Zheng
Another thing about fiber is that nobody makes it available for you. You have to build yourself. Which are we in the process of building those fibers ourselves.
Jay Fidell
Yeah, but that’s something else to do, right? You’re also doing fiber, right? Well, we’re not missing anything.
Richard Zheng
Well, we do all kinds of things – fiber, wireless. You name it. Whatever works.
Jay Fidell
You know, that’s quite remarkable, especially the part about the software. I’ve always believed that whatever you have is going to be better if you have good software to run it. Anything in the world. Yeah. It’s a mindset. It’s a philosophy. So here you have these boxes. If you run the software, you configure the boxes automatically and presto, you’re up and running. Which means also in this kind of model, you’re talking about the copper. You can put a customer online in virtually no time at all. Very same day. Well, the copper you have relied on the island and give you those copper.
Richard Zheng
Once you get the copper. Normally we order the coppers once the ILEC finishes the installation. The next day we go there, put a box in. And we’re running.
Jay Fidell
All you really need to have is the copper. That’s all you need. That’s pretty impressive. Listen, let’s talk for a minute about how you guys learned to do this, to write the software and learned to use the copper. How you found your niche in this high-speed copper market. You know, where did you go to school?
Richard Zheng
I went to school in China. So I graduated from Tsinghua university.
Jay Fidell
Tsinghua is a very good school. Engineering school. On the other hand, everybody in China is an engineer. You could approach an artist in the street and you could say to them, where did you study in school? He would say he started engineering and art was an afterthought. OK, so what kind of engineering did you study there?
Richard Zheng
Computer science. So I was a programmer in the beginning. but I was never a full-time programmer, but I was trained to be a programmer.
Jay Fidell
And what languages does that mean? I mean, what level of confidence do you have? It sounds like it’s a pretty good level.
Richard Zheng
I think I’m pretty good at system design. Putting other things together, in terms of coding. I’m kind of getting rusty, you know. All of these new things – Ajax, etc. – they’re beyond me. I know what I tell my programmer what can be done. They make sure how to make this big question.
Jay Fidell
Richard, where do you get them? These guys are also very competent in programming. Where do you find them?
Richard Zheng
We find them everywhere. Although we are a Hawaii-based company, we actually find them all over because Hawaii is really small. It’s really hard to find lots of good talent. But for us, small comedy, we’re probably couldn’t afford them anyway. So we just go global and find them.
Jay Fidell
So you go on the Web. Did you go to Craigslist?
Richard Zheng
Oh, it’s a really interesting story. So initially I was doing the programming myself, but at a certain stage, it’s too much for me. HTML and CSS are beyond me.
Jay Fidell
We’re giving away your age.
Richard Zheng
We use open source libraries and there is a system upgrade that we tried to upgrade, but we ran into roadblocks. We didn’t know how to do it. So we approached the developer for the library and asked if they come to Hawaii. We pay the airfare, accommodation, and time you stay here. Do you want to come to Hawaii and help us with the upgrade? Nobody won’t say no to Hawaii. So he came here and this guy is really good. We give him an offer and he asked, can I stay in Hawaii? Or I can work from my home? Whatever you want to do. After a week, he decides he didn’t want to come to Hawaii. Fine, just stay where you are.
Jay Fidell
Or he could be on the Mainland, doesn’t matter.
Richard Zheng
He’s on the Mainland, yeah.
Jay Fidell
What school did he go to?
Richard Zheng
You know what, I don’t even know. He was in Europe.
Jay Fidell
Europe?
Richard Zheng
Yeah. He’s in Europe now.
Jay Fidell
See how global that is. We can do global here. Your company, Servpac, can do global here. Bringing people in from wherever you find them, even by remote.
Richard Zheng
You know, I think we are talking about the cloud. Okay, to build a cloud, we have an engineer that is based in New York. He flew here several times. For one time, he stayed here for six weeks helping build this new data center facility?
Jay Fidell
Okay, I’m starting to get very impressed. So you know what? Aren’t you worried that ultimately fiber will overtake copper? Because some of these companies, including HawaiianTel, are putting a lot of money into fiber. Fiber will be everywhere. Nobody is laying new copper now. So what are you doing about that?
Richard Zheng
Copper is slowing going away. So that’s why we started the fiber project earlier this year. One thing besides the central office and EFM, another thing we did is put a fiber in lots of high rise and low rise buildings. We have over 100 buildings on that connection. Almost all these downtown buildings, we have fiber. Didn’t cost building owners anything but we put it in to give high speed to customers.
Jay Fidell
Why didn’t you wait for the big boys to do it? Well, I’m not talking about Oceanic Time Warner and Hawaiian Telcom because they will ultimately do it, won’t they?
Richard Zheng
Right. But how long have they been waiting for this?
Jay Fidell
Okay, you want to do it now?
Richard Zheng
Yeah. I mean, we have VoIP services. It’s like we have the fanciest car but drive on this road with a lot of potholes. It doesn’t work. So we know the time wasted calling other carriers to troubleshoot the network can be spent to build our own.
Jay Fidell
So how do you make a decision for a given client, you know, to say, well, I will give you 250 mb/s on copper. Or I’m going to put in fiber. Now, if you already have fiber in the building, that’s really easy, isn’t it? Just use the fiber rack. But otherwise, I guess the question is, when do you decide that you’re going to make the investment for fiber instead of trying to get the speed out of copper?
Richard Zheng
Right. So it’s actually it’s very easy. If it’s a multi-tenant building, doesn’t matter if it’s 110 or 20 tenants, the chance we get one customer and more customers is very high. Prices are very competitive with good service. Multi-tenant buildings are no problem. We just give people this high bandwidth with the multi-tenant buildings.
Jay Fidell
So you want you want one where it’ll spread that way? You can talk to each other and get more customers. And you want to building where nobody else has it. So they’ll all love it.
Richard Zheng
And they drop the price and very competitive. Nobody looks at this as being so cheap. Why should I spend money to build this?
Jay Fidell
It was your fiber cheaper than the big boys?
Richard Zheng
Yeah. I mean, 10 mbs. Traditionally, before we started buildings, about $800 for 10×10. Right now, for the big boys, it’s about $500. And these multi-tenant buildings are $99.
Jay Fidell
Oh, that’s pretty good.
Richard Zheng
As we deploy more fiber, we’re going to even drop the price even further.
Jay Fidell
When you say take 10 mbs, I want to get a handle on the speed. OK, first we talked about 250 mbs. That’s very fast. I suppose you can go to a gigabyte, too?
Richard Zheng
Yeah. If we put more cables there. Yes, we can get that.
Jay Fidell
That would be very fast. So what kind of business needs what kind of speed? how how how far can I go with 10 mbs. When do I have to go to 20, 50, 100 or whatever?
Richard Zheng
That’s I really hard question. It’s like asking how many burgers can I eat? Well, how hungry are you? Nobody knows. You have to eat one and see if you’re still hungry.
Jay Fidell
Is there a way you can tell me how much I need?
Richard Zheng
Yeah, I tell people if you want an honest answer, there is no way. But there are general guidelines. If you’re doing Internet browsing, emails, some uploads, some downloads – for about 10-20 people – you can comfortably have 10 mbs. support your phones, daily data, and Internet.
Jay Fidell
We want to be sure it’s really 10 mbs. You want to do a speed test on it because sometimes it’s supposed to be 10 mbs but it isn’t really. Then you’re not getting what you hoped you would get.
Richard Zheng
That’s a very good point, Jay. So, you know, in other providers, you know, they have this kind of optical bandwidth. I give you 10 mbs or 5 mbs. If you don’t get it, then you don’t get it. With our services, an EFM or fiber buildings is dedicated bandwidth and not shared with anybody else.
Richard Zheng
So if your neighbor is using it, you’re fine. They don’t affect you. You have your dedicated lane to our network.
Jay Fidell
That’s how you do it, by dedicating the lane of the line to my network. Nobody else. If you set it at 10, it’s gonna be 10.
Richard Zheng
Yes. These are going to be 10 because our VoIP service round top of this freeway. So if this road is bad and congested, the voice traffic will be really crappy.
Jay Fidell
So let’s take a minute to talk about voice. It’s been years since I remember Voice over IP being rolled out. I don’t know what advances have been made. Is VoIP a bigger deal now than it used to be? You know, it goes back to programming, doesn’t it? If you can make it sing, dance and do miraculous things, that will attract the market. It’s just a question of speed. I wanted to do miraculous things. I want to think and help my business. So what are you doing in that regard?
Richard Zheng
That’s a very good question. Traditionally, a phone is a phone . There’s a dial tone and you pick up the phone.
You make a call, pick a phone, and answer the call. With all of these technologies, you have these other things like data mining or things connected. For example, we use our VoIP system in our business. When the call comes in, it’s tied up with our CRM database.
Jay Fidell
CRM means contact….
Richard Zheng
Customer Relationship Management.
Jay Fidell
It’s a way to build your customer base. That’s what CRM is.
Richard Zheng
So the call comes in, based on the caller ID and other information, IT would push this notification to the tech support team. So on their screen, they will see a new call come in. And then based on the call ID, they can tell us who the customer is, and what services they have.
Jay Fidell
This is a cold call, brand new call?
Richard Zheng
Brand new call. So it’s in the system. It’s either customers, vendors, or brand new calls. Hopefully, it’s in our sales database. So the screen for the call tells us if this is a customer or vendor. If it’s a customer, it’s going to tell us what service they have. If it’s a phone service, it’s going to tell us if they have trouble with their phone service. If phones are offline, if phones are back online. If the internet speed is having trouble. Before they even talk to us, we get all of this information on the screen. The technicians can troubleshoot even before they talk to the customer.
Jay Fidell
A brand new cold call. You know what’s happening before you pick up the phone?
Richard Zheng
Yeah, exactly. Because when the call comes in, the first thing is it needs to ring right? Before ringing, they are sending a notification to the support team.
Jay Fidell
Exactly, you’re doing the software. That’s quite amazing. So with the CRM and VoIP – Voice over Internet protocol – you’re able to help me in my business? How can you help me make my business run better these days with the current technology and programming products? It’s CRM but other things too. What are the other things?
Richard Zheng
There are lots of other things we can do. For example, we have large installations. When we schedule with a customer, we need to say before the technician goes on-site, we need to call them to say somebody will be on site. Traditionally, you have an admin person call them and that takes time. Now with this VoIP – Voice over IP system – you can track the technician’s location and see if they’re on the way to the customer. So it will trigger a call to the customer directly.
Jay Fidell
Saying what?
Richard Zheng
Saying our technician will be onsite in 20 minutes. If there are any questions, please press zero to talk to the operator.
Jay Fidell
And it’s automated?
Richard Zheng
Yeah. Otherwise, have a nice day.
Jay Fidell
Well, it strikes me between the old fashioned handset that we’ve had in our homes and businesses for so many years, which many have not been advanced with the technology as against the cell phone. I mean, this has technology that grows while you watch. When there’s a new version every six months, there’s another amazing thing that happens. But this could happen with VoIP the same way.
Richard Zheng
Yeah, keeping people mobile. For example, we have an app running on the smartphone – Android and iPhone. You can basically take your office number and go anywhere. Attorneys and CPAs – they don’t have to stay in the office to do their job. They can go home and make a call to the customer. It shows their business caller ID instead of a cell phone caller ID.
Jay Fidell
So that’s the new model of it. It’s all seamless and integrated and you can do that. Is that something you’re programming or getting from a large company?
Richard Zheng
Now, we are a small company. We couldn’t afford to spend five million dollars to buy a switch and do those things. When we started in 2004, you know, we used lots of open source programs, but we integrated them together. We have built our own web interface provisioning system because this system is only customized for our use.
Jay Fidell
So provisioning is what helps you install it right away? And that’s again a real benefit. When you get the equipment there physically to push a button and the provisioning is automatic. And you can re-provision, too. So the next time around, it’s going to be automated as well.
Richard Zheng
Exactly. You disconnect, press a button and disconnect. Then a notification is sent to the technician so they know to go to the customer site, grab the device and bring back to the office. All inventory is tracked and the system is integrated.
Jay Fidell
I like the idea of connecting a cell phone with the office system and the guy on the other end doesn’t know where you are. You’re going to pick it up at the same speed and he could think you’re in your office or Bulgaria. It doesn’t matter.
Richard Zheng
We have a marketing customer that has a office in Japan. When they call their clients in Hawaii, they just pick up their IP phone to make a local call. It’s a free call for them also.
Jay Fidell
We use Skype around here. We do Skype programs every day to everywhere. What’s the difference between VoIP and Skype, and can VoIP carry video? I know there are video programs there, but can you set me up with a video conference call system? Is it like Skype? Is it the same Skype?
Richard Zheng
Well, Skype is free (laughter).
Jay Fidell
Yeah, but they nail you for a few bucks.
Richard Zheng
What do we do is we specialize in business communications. You know, business is different from residential or other applications. And people want lots of features including ringing multiple phones, auto attendant, go to voicemail, and send to cell phone. All these things that we do really well.
Richard Zheng
You know, again, back to the software. Just click a few buttons and program right for the user. And also, you can do calendars. You can say from 8:00 or 5:00, ring my office or cell phone after hours. Next Monday is a holiday, so ring my cell phone, ring my assistant, etc. All of these things can be done through our system.
Jay Fidell
You could probably tell us when you take a break on the show.
Richard Zheng
That’s Richard Zheng. He’s with Servpac, a really high tech operation. This is Think Tech Talks and we’re talking about the life of CLEC. It’s not what you thought. We will be right back.
Jay Fidell
The boundaries of programming and telephony, including voice over telephony, which is an important part of business now.
Jay Fidell
So I get on the phone and nobody I ever call these big companies on the mainland is ever there. It always takes me through a voice menu. I remember a few years ago that you could buy a book and learn how to make a voice menu. You could and if you can hit number one or number two, or go there. I mean, our country, our world, our globe is full of voice menus. Some of them work really well and some of them don’t work well. You mentioned in the break that you don’t do voice menus, but certainly you can fit me together with a voice menu. What’s it like?
Richard Zheng
Let me correct myself. We can do voice menus.
Jay Fidell
You do?
Richard Zheng
Yeah. So you press the one to that marketing to sales. Yeah, we do that. It’s really easy. You just press the button, transfer, and give the location. You can keep your office hours. Those things that, you know, you don’t need a human operator to offer this. But I can tell you this. In Hawaii, people still like their human touch. We have lots of customers that want to use this, but lots of people want a human being answering those calls.
Jay Fidell
Yeah, sure. I’m one of them because I think the voice menus are out there are lousy. I mean, you really have to think through what he wants and what it means to him to press one or two -what’s going through his mind at the time he’s engaging with the menu. So many of them. On the mainland, you get into voice menu hell, going round and round and start the whole call again. But don’t you agree that it’s a question of programming? You have to figure out exactly what kind of user experience you can give and then you can have a happy customer over there.
Richard Zheng
Yeah, so that’s why we specialize in these things. The user comes to us because they want certain things, but this is probably not the best way. Some people want their phones to ring 20 times before going to voicemail but nobody is going to wait for 20 years because they’re going to disconnect you. So we are good at those things. We can give customers suggestions and help them build the system.
Jay Fidell
I think voice menus are just beginning. Sometimes you hit a good one, like I forget which airline. Some of the airlines will have an engine that recognizes what you say. It’s not pressing one or pressing two. You could give it a whole sentence and it would pick out the words in there and decide what you’re really trying to tell it. There must be engines that you can buy, software engines that will do that. And now I can have a conversation with this phone.
Richard Zheng
We actually look at the software a couple of years ago. The technology for what are we can afford is not there. You know there’s the advanced ones. I don’t know if you ever heard about ones just like a dating service. You can talk to them. You feel like you are dating and talking to somebody.
Jay Fidell
This goes to artificial intelligence, which isn’t cheap. It takes a long time to develop it. You keep hearing news stories about artificial intelligence that’ll do psychological therapy on you. Have a conversation and sell you something on a human level. Talk about people who want human contact. We’ll give him your contact, but it won’t be a good idea. Ok, that’s very interesting. We haven’t even scratched the surface on that because humans are much more expensive than software. Maybe there’s an opportunity for you to take it to another level.
Richard Zheng
Right.
Jay Fidell
But I want to talk about the cloud. You can give me Cloud, backup my stuff using the high-speed Internet and keep it safe in redundant locations. In co-locations but multiple co-locations. So I never have to worry about any natural disaster, power failure or anything else. It will always be there. How does it work?
Richard Zheng
Last year we built this new data center in Hawaii. The purpose of the data center is only for cloud services. Every aspect was designed around the cloud. We always tell customers there’s lots of redundancy here. There’s no single point of failure. You know, even if a tsunami comes, unless it’s a huge one, we are 1 and 1/2 miles from the ocean and really safe. Also, we built a similar system in Las Vegas. If disaster happens, then your data is gone here. What do we do is take a snapshot of the data and send to Las Vegas. So within a few hours, we can get everything running in Las Vegas.
Jay Fidell
And I wouldn’t even know it?
Richard Zheng
Well, you wouldn’t know because it’s a disaster. for the normal disaster, you’ll be down for days or even weeks. This one you would be up and operating in a few hours.
Jay Fidell
Oh, that’s fabulous. And that’s software again, isn’t it? You have to build that. Your software needs to be better than the next guy’s software to be competitive in the marketplace. Why don’t you use Amazon as a back end? Just send it all to Amazon and nobody knows where it’s going. Cloud is anonymous anyway. So why don’t you just use Amazon? They’re cheap?
Richard Zheng
Well, they’re not. The advantage we see compared with Amazon is that Amazon is mainland based, right? We are Hawaii based. When you send the data to the mainland and then comes back, you’re talking about a 60 to 70 millisecond latency to the West Coast. On island, latency is about two to three milliseconds. So it is 20 times slower when you try to access data from the mainland.
Jay Fidell
What about that big concrete box at the airport?
Richard Zheng
You’re referring to what used to be Piihana Pacific. Actually, when I first moved that island, I worked for Piihana.
Jay Fidell
I remember when we talked a number of times.
Richard Zheng
It’s a great facility. For colocation, I strongly recommend using them. We are not colocation. We do cloud services. We built a whole system around cloud. That makes us separate? Another thing is we provide VoIP phones, Internet and cloud. All these things are connected. You can’t build the best cloud if the internet is slow. It doesn’t really matter. You pull your files and it takes forever. You’ll just give up. What makes us special is we combine all those things together.
Jay Fidell
Amazon doesn’t do that?
Richard Zheng
Amazon doesn’t do that. You can do third party, but you’re talking about third party. Here, there is a single point of contact. If something is slow or down, you just talk to Servpac. You don’t have to talk to multiple carriers, just one vendor.
Jay Fidell
OK, I want to talk about Clearwire, because that’s how we got in touch for this show. You sent around a little note about Clearwire going out of business in Hawaii. So what is happening with Clearwire and how do you fit?
Richard Zheng
Clearwire is a fixed wireless company service provider. It was a joint venture between Sprint. and another company or some other entities. Sprint bought Clearwire a few years ago, but business wasn’t do so well. They’re shutting down.
Jay Fidell
I remember Clearwire used to have a little box, a wireless box about that big. It’s not high tech now, but it was high tech then. You could take it around with you and get reception where ever you were, right? It was wireless, but it was feeding by cell signals.
Richard Zheng
Yeah, similar cell signal. That’s actually one big advantage of Clearwire because it’s fixed wireless. You don’t need to set up the antenna. You can take it pretty much anywhere you want if they have a good signal. That’s a big if because the spectrum they use is not the best. The speed is not very fast, the coverage is not very good, and uptime is not always good.
Jay Fidell
They never invested the money into the infrastructure in order to make it really work, I think.
Richard Zheng
Besides, you know the call center on the Mainland. You call by 3 pm Hawaii time, they’re finished already.
Jay Fidell
Forget support.
Richard Zheng
Yeah, there is no support there. For several different reasons, Sprint just shut down the business.
Jay Fidell
OK, so you’re going to shoot into the niche. How are you going to do that?
Richard Zheng
There are several things we can do. If people just want Internet access, we can do either EFM or DSL. Remember, we’re in over 100 high rise, low rise buildings for fiber and we don’t need anything from third party. If customers want the service, we send a technician there and put a cable. Here we go, internet is up.
Jay Fidell
You know, I remember years ago when I first met the CLEC community, I was so struck by the vitality that you find in CLECs, in all CLECs. Unfortunately, there are not that many around these days. But I still find that vitality in you. So, Richard, it’s really great to connect with you and hear about your adventures, technology, programming and view of the whole marketplace. I wish you well. Good for you.
Jay Fidell
Thank you
Jay Fidell
Vitality is still there. Richard Zheng. It’s Servpac. It’s the life of a CLEC. Good luck to you. Thank you.