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Technology Stocks : COM21 (CMTO)

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To: Robert Sheldon who wrote (525)6/11/1999 6:44:00 AM
From: lml  Read Replies (2) of 2347
 
Thanks, Robert, for your reply, though I don't follow all your logic.

First, I would ask, if possible, that you provide some sources to support your statements. If you "read a lot," perhaps you could guide the thread to some of the sources of your knowledge.

With respect to my statement of a cable provider's decision to upgrade the plant to fiber, I think you failed to discern the core issue. The issue is not only whether one modem will work better than another due to poor line quality, but more importantly, whether the quick-fix you assert the TERN solution delivers is the way to go.

My feeling on the matter is that those cable providers that have a history of delivering poor service to their customers & have historically been reluctant to invest in its plant because of thin operating margins & the lack of "a deep pocket," will choose the "budget" upgrade to which TERN appears to be the best modem provider. Whether this is the prudent course to take is another issue.

You seem to dismiss the benefits of fiber quite quickly, as someone else has appropriately pointed out. Establishing a good connection on a poor quality system is not the only issue facing cable providers. A more important issue is improving the overall infrastructure to meet the tremendous demands that will be placed upon the system in a matter of a few years. And, IMHO, just going with a TERN modem without improving the plant just ain't gonna cut it.

Now keep in mind there are still a few cable companies that have always been reluctant to invest because that have held a monopoly over their subscribers. In the past if you wanted cable programming you were basically stuck with your cable company, or if you could afford to invest about $1,000 you could opt for satellite.

Today its a different story. Satellite broadcasting is much more competitive, both in price & programming (which now can include local broadcasts) More importantly, what we're talking about here is Internet access. So some subscribers will also have available alternative broadband access via DSL technology & fixed wireless. The bottom line is that these "reluctant" cable companies will need to invest in fiber if they are to compete in the marketplace.

Robert, maybe you could explain how "TERN's equipment allows a way around" my concerns of the ability to deliver improved QoS going forward. I just don't see how the TERN solution is the panacea to the decision to forego a fiber upgrade. The benefits of fiber over copper are indisputable.

I do not challenge your position that a market exists for modems that accomplish what you state the TERN modem offers. But what I do challenge is your acceptance that these particular cable operations are making the right decision -- that an investment in the TERN modem today is going to prove a prudent investment in a few years when a fiber upgrade will be unavoidable due to increasing demands that a modem solution will not be able to provide.

If in-fact the TERN solution is the way to go, then why is everyone laying fiber these days?
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