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Technology Stocks : COM21 (CMTO) -- Ignore unavailable to you. Want to Upgrade?

To: pat mudge who wrote (523)	6/11/1999 3:38:00 AM
From: Jay Fisk	Respond to of 2347

Your opinion is valid Pat, here's an interesting commentary from Moody's on the risk vs reward of broadband - I like the 20x increase in cable within 24 months: biz.yahoo.com NEW YORK, June 7 - The hot new market for residential high-speed Internet access in the U.S. will be big enough to support products offered by both the local telephone companies and the cable companies, but the cable companies have more to gain from a ratings standpoint, Moody's Investors Service concludes in a new report. The analysts there say that the money to be made in high speed data access, or HSD, is much more material in relation to the cable companies' current revenues than it is in relation to the average telephone companies earnings. ''High speed data access presents the cable companies with a significant new revenue source that could -- when other Internet-related products are added -- eventually rival their existing revenue stream per home passed,'' says Moody's Vice President/ Senior Analyst Neil Begley. ''The question from the rating standpoint will be how they use this money.'' For the local telephone companies, the issues are more complex. ''These companies have had an emerging business plan to participate in this area but up until recently focused their attention primarily on the much larger, and therefore more enticing, long-distance market,'' says Senior Vice President Dennis Saputo. ''Many were also slow to enter because they were afraid of cannibalizing existing high-speed data products and the second lines they had in the home to support more traditional forms of Internet access.'' Some unresolved issues with the Federal Communications Commission have also delayed the telephone companies' rollout, the analysts say. These include the terms under which the telephone companies lease a portion of their high speed network at a discount to competitors. Moody's rates about $55 billion in debt in the telephone industry and $72 billion of cable company debt. The weighted average rating is Aa3 for the domestic local telephone companies and the outlook is stable, while cable operators carry a weighed average rating of Ba1, with a positive outlook. Until 1998, residential access to the Internet was, in effect, a monopoly for the incumbent local telephone companies. But, over the last 18 months, the communications industry has embarked on a race to develop and deploy affordable ''high-speed'' access. This race has been spurred by the dramatic growth of the Internet, the increasing sophistication of both users and applications, the sub-$1,000 PC, and the promise and hype of E-Commerce and E-Information. The two competing products currently on the market are cable modems and DSL modems. Cable modems operate over two-way hybrid coaxial cable and provide user rates as high as 10 megabits per second (Mbps). DSL (digital subscriber line) operates over existing copper telephone lines and provides rates as high as 9 Mbps. Moody's says that it anticipates additional new competitors will enter the high-speed data market, including competitive local exchange carriers, satellite companies and wireless telephone companies. But the incumbent telephone companies and the cable providers are likely to dominate given the headstart they have in those markets, their broad coverage, and their significant financial resources and marketing capabilities. Moody's believes that the extent to which either the telephone companies or the cable companies take a lead will depend upon their speed to market, the quality of their execution, their prices, and their ability to provide consistent service quality and strong customer support. Cable modems are to date ahead of the game because of cable's earlier entry into the market. At the end of 1998, cable modems had approximately 400,000 subscribers, while DSL had less than 40,000 out of the 100 million households in the US. By 2002, Moody's expects these number to be around 8 million for cable and 5 million for DSL. ------------------ Com21 at current valuation, is a "must have" in my portfolio.

To: pat mudge who wrote (523)	6/11/1999 12:10:00 PM
From: Benny Baga	Read Replies (2) \| Respond to of 2347

Pat, Any thoughts on potential competition against Cable Modems? WorldGate provides Internet Access directly through the cable box to your TV. No modem or PC needed. WGAT has just started rolling out in production, the market is just developing, just wondering if you have any thoughts. WGAT's main cable partner is Charter. The Internet services is fairly cheap for consumers, around $6 per month. Thanks, Benny