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Technology Stocks : Real Life Connection speeds ??

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To: Timothy Tashjian who wrote (24)2/27/1997 5:45:00 PM
From: Larry Holmes   of 148
 
Timothy:

I don't have a cable modem, but I am a modem design engineer; I have worked on cable modem projects and am familiar with the modems and the cable systems.

Unfortunately, there is no way to prevent the degradation of speed on a cable system. All users on a downline node share the same bandwidth, and there is a simple mathematical relationship between overall bandwidth, number of users on-line, and total available bandwidth for each user. Ignoring routing overhead and so forth, the relationship is:

U=B/N

Where U=each user's useable bandwidth, B=total bandwidth in bps of the link, and N=number of users downloading data. The only way to improve the situation is to reduce the number of users on a downline, increase the overall bandwidth, or add more cable (which allows reduction of the number of users per downlink). Although a cable modem can really scream when there aren't many users, just as the internet slows down when it is busy, so does a cable system slow down when there are many users logged on, sometimes it can get slower than an analog modem on a phone line!

It is my opinion that ADSL (and the other "DSL's"), cable, and other systems will continue to be relatively proprietary systems for a couple of years. The eventual winner will probably be something coming from the phone companies, unless phone and cable companies join forces in a new way not yet defined. Cable companies simply don't have the ability to restructure their systems across the board; those that are succeeding are essentially putting in new systems and most cable companies can't do that unless the Internet goes even crazier faster than it is now. Phone companies have spent the past hundred years handling point to point switching and would have the edge in my opinion. However, the winner is not going to be determined by technology, but by business models and business decisions. Whoever decides to devote the most resources to it and whoever manages it the best will win, not the best technology; that rarely wins in the end; we usually wind up with "good enough" technology provided by companies who can handle the business.

I rather expect HFC and ADSL to coexist for some time to come. When the Internet and other markets are stable, Telecom companies will move in and upgrade the systems, but until then, it is all too unstable for the huge investments required to upgrade the whole system to high speed. Right now, even though the Internet is extrememly popular, there is still a lot of uncertainty and doubt about it from a long term business point of view; that will have to pretty much go away before final decisions are made.

Of course, as soon as I put my opinions on the line like this, everything could change and invalidate all I've said. But for now this is my opinion; I am not a real inside expert on the big infrastructure issues but I've worked with them a little bit.

Larry
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