I have now checked out the legal situation between LNET and ONCO. It appears that the outcome from the summary judgement hearing was that many (if not most) of the issues raised by ONCO were dismissed by the judge. The issues are narrowed quite a bit. Down side risk for LNET is limited. Risk for ONCO is about the same. For me the key issue seems to be the issue of how a litigation loss would affect LNET's ability to do business. Property owners with LNET contracts could care less, it seems that this is part of the business and ONCO is known for this type of behavior. Net - both sides expect to prevail, I would expect some sort of settlement on the 11+ hour with cross-licensing and LNET dropping their more recent actions. ONCO appears to have stepped into it because their patents are becoming more irrelevant by the minute.
I talked to the CFO at LNET about cash. It's a non-issue. As you know debt financing has been the norm at LNET. It was not that way at ONCO because of its ownership by Comsat. That was the reason for Comsat spinning off GOAL. Expect to see ONCO's balance sheet look more and more like LNET's.
Connect Group - brings them the software and hardware expertise to ethernet Hotels: public spaces and guest rooms. They bring a T-1 to a hotel property for connectivity. The PBX is connected in a normal telephone fashion. The data stream goes to the rooms over the telephone wires. Using the standard four wires that go to every telephone, they can run both voice and ethernet. (That technology is trivial, every kid with a subwoofer uses it in his audio system to separate base from treble.) Ethernet is the de facto standard for connecting computers to office networks. New laptops come with an ethernet port installed. Business travelers DO have this capability. The connection is merely a wire with plug that looks like a big telephone jack. If they want to use a modem, they use the telephone jack, and go via PBX.
I've talked with the folks at Connect. They spun out of US Web. A main value add is the server software which allows the traveller to hotel ethernet system. It is plug and play so that the user does not have to reconfigure her laptop. The server does all the work. (The competing software being tried by ONCO requires software on the laptop to connect. It requires configuration, may conflict, and creates a security hole - the usual crap with new software. It works best with Win95/98. Real problems with Power Books and Unix.) MCI is co-marketing with Connect Group at the Hotel Convention in LA. I assume that MCI will give the best ISP rate.
The coax continues to be mode of access for video into the rooms for movies. It is also the way Nintendo games are delivered. Internet can be done via coax and TV. Connect will give T-1 access to the b-LAN system. So the whole thing will tie together.
LNET sees business internet as being additive to their business. They will continue to provide recreational internet service via their installed coax system. They can bid on the public space connectivity for essentially all business hotels whether they are currently using LNET in the guest rooms or not. (Go to the SJ Hilton site, you will see that Connect as part of US Web initially connected their convention space for a Bill Gates keynote speech at a Microsoft Seminar in 1996.) The typical way conventions are done is that an ISP or Telco is contracted for each event. With this managed connectivity, the T-1 service is always in place, and can be switched on, and billed from the front desk computer. The T-1 provider is simply the cheapest available.
My sense is that in acquiring Connect Group they now have in-house technology developed by a bunch of Stanford Computer Science people that allows commercial properties to be connected to the internet in a simple, cheap, and logical manner. I assume that they will continue the current installs and pursue their current contracts. I visited all the internet people at HITEC. The Connect people are the most direct. My sense is that in buying them LNET has a way to cut through the techno-babble to merely provide service. The rest of the industry is balkanized into ISP's, complicated hardware, bogus hardware, swiss army knife software, kiosks, etc. LNET appears to be in the service business. Simple, straight forward. No BS.
KW |
