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Technology Stocks : (LVLT) - Level 3 Communications
LVLT 53.630.0%Nov 1 5:00 PM EST

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To: Curtis E. Bemis who wrote (983)5/16/1998 9:27:00 PM
From: Frank A. Coluccio  Read Replies (2) of 3873
 
Curtis,

I just knew you would come through, here.

After reading your reply several times I feel comfortable that the expertise level of L3 is high, that they have a lot of cash, and the level of infrastructure they will build will be superior to that of the status quo.

You still haven't answered my question, however, as to what they will do to make money in a way that differentiates them from the crowd. They are doing the same things as most of the other fiber barons today, and some of the larger incumbents as well. And maybe that is good enough, considering that everything in the carrier sense turns into a commodity nowadays anyway, no matter how brilliant it is at first. So I am content to leave it at that.

Incidentally, are you suggesting that the levels of expertise at the other three or four recent mega-entrants is inferior to that or L3's?

Thanks, anyway, for an otherwise illuminating portrayal of L3's future plans and how they hope to back it up. Now that I know that they have the best skills on board that the IP universe has to offer, I'll extrapolate from there. I just hope it's still relevant by the time they get to wherever it is they are going.
---

There's one thing that I think we need to rectify here. It's your not-so-subtle implication that I, in some way, may be a Luddite of some sort when it comes to the Internet. On the VoIP thread you talk about a fast train coming. Here, you provide me with a message about the inevitability of, if not the current ubiquity of, IP. Huh?

OK, I've offered up deference to you in the past over this, or some other issue or unknown origin, probably due to the fact that we may meet some day at a technology conference or across the table discussing a next gen platform initiative on behalf of one of my clients. Also, and this is most important, because I'm a helluva nice guy.

Today is Saturday, and what the heck? Let's have some fun and toss around some verbiage that would go to waste if we don't use it up right here and now.
---

If you are getting a commission for IP converts, just let me know, and I will sign a piece of paper, anything you say, saying that you swayed me through demonstrations of superior capabilities, and the best price performance analyses I've ever seen was used to draw me into the IP camp. I don't take kickbacks, however, but if you provide me with your email address I'll give you the vitals of my favorite charities.

If, on the other hand, you are not getting "paid" for this missionary work of yours, then forget about the need for swaying me, because I am neither religiously resistant to, nor temporally opposed to the use of IP in any way that makes sense. Love the stuff.

I'm even in favor of trying it in ways that are seemingly bizarre, sometimes are, just to see what sticks, what flies sideways, and what falls to the ceiling. You have the wrong fella for the characterization you chose to bestow upon me.

Fact is, many of my ideas were before their time and were regarded as self-serving & technology-driven experiments. More to the point, they were considered dangerous by those with legacy interests and traditional forms of career vesting. Mind you, this was way back in 1994, when I was contemplating an early retirement from all of this nonsense.

I think your misgivings on this matter, with regard to some false images of work-hardening taking place between my ears, stem from my positions in the VoIP thread where I state that backwards compatibility and the need to preserve embedded investments are inhibitors to many enterprises who would like to adopt internal Voice over IP platforms in the near future. You see, there are reasons, besides the intrinsic qualities and purity of any given technology, which go into making an acquisition selection. Here's what you picked up on, I think, as an example.

"A firm that committed several MMs of capital to a set of PBXs and switched circuit infrastructure in 1996 would have major problems with this, if they were to do it in a carte blanche manner at this time. This has to do with finance, being caught by surprise by a new technology, and nothing at all, necessarily, to do with current technology persuasion."

In your last reply here you stated:

>>All brought to you by the internet ;-))) Don't believe in the
ubiquity of ip yet ??? You will !!! We could discuss this for days
but I'll stop here. I'll take you to lunch if you are in the Valley
and we can discuss forever<<

Lunch would be real nice, thank you. And if you are ever in Silicon Alley here in the depths of the Apple, I would be honored to return the hospitality. Silicon Alley. On the corner of Beaver and Broad. Where every day is a dress down day. {How'd you like to have that for an address, eh?}

I see you are all up and very excited about this whole matter. That's good. If you know where I can buy some stock in this "internet" you speak of, let me know, and I'm in there with ya, longo, as we say in Calabria, Italy.

What's that all about, anyway? Coming out of the clear blue... I need someone to tell me about the internet? and the fast growing presence of IP?

If I don't believe in the ubiquity of IP *yet,* it's because it's not ubiquitous, *yet.* This should be enormously simple and obvious to anyone who takes the time to step away from their workstation screens for a couple of hours or more.

I can show you many real-life examples of non-IP applications that still dwarf their neo-counterparts. Not the least of which is represented by close to a trillion dollars of annual traffic and trade, worldwide, on the global switched telephone network.

Great opportunities for IP to get into this voice area, still -- while the getting is good. At some point saturation, exclusionary tactics, regulation, what have you. But still a good time to get in at this point in time. Marking territory is going to be the important role here for the time being.

I could tell you about the efficacy of VTOA in international voice markets, the integration of IP and VTOA for m-m, Intserv, but I wont. It'd take too much time. Besides, you know all of this already.

But that one is too simple. Let's search for something secluded and esoteric to demonstrate my point. Got one!:

Closer to home, I recently attempted to have one of our large banking clients "consider" the use of an IP-based routing infrastructure as an alternative to isochronous forms of SNA channel-to-channel and silo transmissions. Note: The existing massive "super-net" IP backbone in place was never intended to scale to the size and brawn that I needed.

Instead, they decided (with concurrence from me, in the end) to purchase several million dollars worth of TDM/ATM-based gear to transport about 300 GigaBytes of imaging traffic a day cross-country (~2,100 miles). Some inspection under the covers revealed why.

IP, to me, would have seemed a more elegant and robust modality going in to the future, trusting, of course, that Tag or MPLS or some form of Packet over Sonet (perhaps packet over fiber, even) would be ready in a reasonable time frame, which, of course, they are not. Especially at the volumes and line rates I'm referring to in gray-scale imaging apps.

Then I took a look at the assets behind the existing infrastructure and the book values of the related network and mainframe elements. For the piece de resistance, I took a look at the machine code and the C code implications, and then the multi-vendor dependencies in order to effect any kind of changes, whatsoever. Oy! You know the game, I think...

The proprietary hardware runs on proprietary software, using a legacy line coding technique, that is not modularly separable from the other two components, without major software surgery, that would affect SLAs, which would lead to premature carrier penalties and terminations, because the incumbent carrier doesn't support IP at the OC-3c rate in a protected ring mode, etc.

This is one Multi-TeraNet that is not going IP any time soon. I say Multi-TeraNet because there are ~6,500 others like it in a consortium all across the country, who will be doing similar deployments, soon. Let's hope that the layer three boxes are ready for those (and that your friends here in L3 can accommodate them), and that the new devices are kind and compassionate, as backwards-looking devices go.

This is not legacy "DS0-Cage" voice - this is only a check imaging and archiving application. No credit cards (yet), no statements (yet), no rejects and repairs and return items (yet), just check images. Throw in disaster recovery and the numbers triple.

Why don't you run the numbers on this relatively simple and unknown application which seems to have escaped the reach of ubiquity.

Since the case I cited is about twice as large as the average, we'll use 150 GB for discussion purposes:

6,500 institutions * 150 GBytes/day * 3 sites * 8 bits/byte

[Your answer will be required by the end of the period.]

These are non-IP, everyday, dumb loads, just for checking applications that must go outside the boundaries of an institution's four walls for safe-keeping. Wait until they get to the clearing, settlements and statements functions which are planned to operate in a multi data center mode, using similar channel extension techniques a la client server!

Television and cable TV systems are other examples where IP will prevail some day, maybe, but does not currently. First it has to go to compressed digital [MPEG-xx] from analog, then to IP [you think so?], if ATM doesn't devour it first, as ATM seems to be doing in many instances of FTTC installations, and even some VDSL applications recently. And oh yes, ATM also piggy backs IP to the home and business for our interactive and download purposes, and web access.

But there is room here in TV for IP too, if we want to look at this in the realm of a possibilities issue. How much equivalent bandwidth would you say that TV in all of its illustrative forms consumes here in the states? Would you say at least a million [20 million?] times more than the Internet, when all access lines and backbones are taken into account? How about future HDTV and compressed digital? Will these be IP in their inaugural forms? Will they not carry voice at some point? Data streams? I know, IP will carry voice, and it will once again ride atop a lower layer. Isn't this starting to sound silly, all of this IP here, ATM there, stuff?

Ubiquitous IP? This sounds like someone who is extremely focused on their work, perhaps even myopically entranced on the IP side of things. A venture into the real world of banking, engineering, you name it, and everyday life (i.e., the white telephone on your kitchen wall and the modem/56k/ISDN/DSL/cablemodem you login with) will reveal that IP is not as ubiquitous as we all would like to think, despite the hypnotic effects that the PC Screen engenders to the contrary. Some day I also believe that your train will pull in to these stations, too.

IP is near ubiquity now, but it will be more-so when:

(1) the existing infrastructure fully depreciates down in a couple of years;

(2) if an when ATM is de-emphasized or abandoned in the emerging local loop and wireless technologies, which is doubtful on both counts. At worst, ATM will continue to support IP<!>;

(3) when the current workforce and upper management which is still made up of legacy thinkers undergoes the attitudinal transformations that are necessary without fears of losing their jobs and careers (which is ironic, because in my opinion, just the reverse would seem to be true);

(4) when some jerkiness from the slow-start/start-restart is removed from the WAN side of TCP/IP that causes clutches to burn up in check sorters (I'm hopeful that Packet over Sonet will do this with a little help from larger buffer sizes, maybe even some spooling); and

(5) when it's almost time for something new to come along to replace it -- just like that which has happened to every other transmission technology before it.

>>We could discuss this for days but I'll stop here. <<

No, go ahead, be my guest. Let me know when you've concluded what the outcome is going to be. By that time v.7 will have been decided on, once and for all, and we will have a new forward looking future-compatibility bridge in our grasps. <g>

And I could give you more examples of where IP needs to make more inroads, but hasn't yet, despite my efforts to promote it in some enterprise situations and at least one common carrier, but I could go on and on all day.

You see, the way things are going, IP itself will be the legacy application, before long. And those who are too late getting into it can leapfrog into the next paradigm shift, wondering if they will face problems of backwards compatibility with that icky pooh IP stuff. And so it goes. You can mark my words on this in your journal.

And let's not forget that IP is increasingly found atop ATM, anyway, soon intertwined, when attributes of one are mapped to the other, and a lot of this is just for pure fun, just in case you forgot what I mentioned earlier. And finally,

Really now, Curtis, I would greatly appreciate your refraining from making future implications that lead readers to conclude that yours truly is a Luddite, when it comes to transmission technologies and Internet-related applications. Thanks, and

Regards,

Frank Coluccio

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