George Gilder - Forbes ASAP Message Board

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Technology Stocks : George Gilder - Forbes ASAP

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To: Brad Rogers who wrote (74)	9/25/1997 1:04:00 PM
From: JMD	of 5853

Brad, your question is far too important for me to answer because I am not technically qualified to do so. But the layman's explanation is that existing networks rely on switches at their 'center' to route and re-route traffic to the appropriate destination. George Gilder has made the case that the traditional phone companies consider switching their 'core competency' and are fighting the concept of dark fiber tooth and nail. Dark fiber reverses the traditional network architecture and puts intelligence (switching) at the periphery rather than the core. As I understand it, packets of data carry their own addressing capability and don't need a traffic cop in the middle. Note that the traffic cop is both a hardware (physical switch) and software (millions of lines of code)concept. The switch brings intelligence to the fiber (it lights it up to make it functional). Dark fiber is dumb providing merely a conduit--the sorting function is done at the edge by, for example, a company sending a message from one division to another over their WAN. All this company needs is dark fiber to get from point A to point B--they can handle the routing themselves. This obviates the need for the phone company's primary value add and turns them into a passive provider of bandwidth capacity. The economic consequences are obviously dire for the telcos and they are in the courts trying to protect their position. This is my take on it and I assure you I probably have only got about 10% of it right and invite others to amend, correct, supplement, etc. In the meantime, the single most valuable info source on the topic I have found is at this URL. labs.bt.com In addition, the following is extremely helpful: seas.upenn.edu If I have understood anything, it is that this development is likely the single most important "paradigm shift" occurring in telecommunications. Suggestions that AT&T should be a $19 stock for example. Therefore, I encourage you to read up and repeat that I am not even vaguely qualified to do more than point out directions. Regards, Mike Doyle

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