Mike:
You are right- this is incredible!
Washington 12/4/00-- In statements likely to disappoint investors, EchoStar
communications Corp. said it may not be technically equipped to compete with cable's two-way
broadband Internet-access service.
EchoStar, the No. 2 direct-broadcast satellite provider, said the introduction by DBS of
two-way Internet access is probably no match for cable's high-speed Internet service bundled
with digital-video and, in some cases, local phone service.
In comments filed with the Federal Communications Commission Dec. 1, EchoStar said
one-way Internet access by DBS "simply cannot compete" against cable and its recently
launched two-way service "is relatively cumbersome to consumers."
I came to this conclusion some time ago. Long before HFC or DSL were available, my
friends would get huffy and demand to know when they could get more bandwidth. "Why today"
I said. "You just rent a T1 and a FrameRealy connection at $1000 per month."
Well of course it turned out that they meant LOW COST high bandwidth. The other access types couldn't
compete against dial up at $20 per month.
I guess the situation is this: you can get satellite, fiber to the home, or T1 but it isn't cheap. Only
HFC, by sharing the last mile, and offering integrated broadcast video, telephone, broadband
data, and future (VOD, videoconferencing) services can deploy at the right cost point.
I came to this conclusion, and invested in various 'pure' play cable companies- and they all
crashed far beyond the other tech stocks. Apparently 1) there is no other alternative to HFC; 2)
everyone wants residential broadband; but 3) HFC is no good (as a stock). This is the logic of
wall street, who seem, like the dog chasing a car, to love to run and bark, but don't want to catch
anything.
My current strategy is to wait until Wall Street's car chasing dogs get tired chasing the current
car, take a breath, and start to chase a new car- let's hope it is cable.
But your Echo Star quote disturbs me. If it is true- and I think it is- the competition
(satellite/DSL/ftth) may throw in the towel before the cable stocks recover. Then they will go to
the FCC, demand 'open acess' on ATT's investment, and the cable stocks will crash again. I
figure every 'open acess' comment to the FCC drops the cable stocks 5%.
It seems there is a race- will DSL, FTTH, and Satellite fail due to cost before Cable
succeeds in attracting respect from the market? |
