Hi Dub and others:
Regarding the competition offered by cable and xDSL:
a) As far as I am aware, two-way cable requires HFC
cabling, which represents only about 20% of the cable
plant nationwide. With ordinary coax, you need a telco
return, which is not too attractive. I am aware of
research on trying to send a return signal on coax,
but these cables are terribly noisy, and the return
capacity would not be large.
b) Regarding DSL competition, ADSL is not a credible
competition, since it is asymmetric and highly
inadapted to business needs. The threat would be from HDSL,
and later HDSL2 (which will offer 1.5Gb/sec in both
direcions on a single twisted pair). However HDSL2
modems are only under development, and I do not really
think that pricewise HDSL2 will be competitive with
wireless T1 with point to multipoint technology
Remember that the telcos are getting huge revenues
with their T1 lines. If they were to roll out HDSL2
at prices which would compete with WCII, their revenues
would get a big hit. Ultimately, this is probably a
bullet they will need to bite. However, this can only
occur if they are allowed to expand into long distance,
so that they can trade increased long distance revenues
against lower local business revenues.
The bottom line: cable and networking companies have
good PR, but this will never replace a cost advantage.
Best regards,
Bernard Levy
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