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Non-Tech : Amati investors

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3:59 PM EST

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To: JW@KSC who wrote (12347)	3/20/1997 3:32:00 PM
From: Bob Smith	of 31386

[MCI Call...technology or Distribution Plan] The more I listened to the call..the more questions I had. A couple of quick points ...from the call: ------------------------------------------ Q) Why is MCI conducting the trial in Iowa? A) Becuase it is in a Non-RBOC area that allows "unbundle access" to the copper loop going to a consumer's home. Q) What is unbudled access? A) FCC Regualtion (part of telcom bill) which mandates RBOCS/GTE to "lease" part of their network for to ld companies. This allows ld companies access to conumers as opposed to "reselling local service" and allows LD companies to sell "value added services". Q) When will MCI have access to unbudled loops in major cities? A) Sometime in Q3 or Q4 depending on FCC and Rbocs. However, then MCI will have to provide "end to end" service (billing & collections& customer service) for local and long distance. When this happens.. then MCI could sell & install their own flavor of ADSL. Q) Is it a "ADSL Technology" trial...? A) Yes and no. MCI has cleverly found a way to capture "bulk minutes" on thier network..without investing their own monies for telcom infrastructure. They will partner with independent phone companies and power companies and sell them the "MCI Network" (unbranded)so that a municipality can sell it and make money. Yes there are many technology trials going on and that will be helpful in the future. But MCI is not acting as the systems integrator...they are interested in a community buying MCI minutes for "re-sale". I think this is as much a "distribution startegy" as a "technolgy trial". Think of it..who will be a competitor...? It is a nice "test lab" to trial different technologies and implement what is the "best" at that time. Q) What does this mean for Amati? A) Amati is postioned as a strategic vendor for "future" ADSL rollouts. The MCI distribution scheme will be replicated in other states in Q3&Q4 of '97 ..with national rollout in '98/99. Amati will get thier fair share..however you have so many competing technolgies..who makes the decision? Q) Is this trial good for ADSL deployment A) YES, YES, YES. Obviously any competition is good vs. the RBOCS. This will serve as direct competition in rural areas AND if they found the same synergies in an RBOC area..they could roll it out. Q) Is the service an MCI branded service? A) Ineteresting enough..NO. The company who sells access would be the vendor (for example: City of Manning or City of ABCD). Q) Who makes the call on what technology.. ADSL vs. HFC in a certain city...? A) Good question. I could see one vendor saying "I'm the best"..another saying "well I'm cheaper"...never really got that far in the conference. I don't mean to sound cynic, but look at it this way: ----------------------------------------------------- * The paper touted MCI technology leadership in rural america...well MCI is not supporting the technology...the municipality/local phone will be..which raises support issues. * MCI has cleverly organized a "distribution scheme" in rural america, supported by municiplities, power companies etc...because they all make money....and it's all wrapped as a way to "deliver technology to rural America"...brilliant PR for MCI and more minutes for them! Honestly...I was hoping for more. But, at least ADSL is getting attention. Just some thoughts, Bob

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