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Technology Stocks : LAST MILE TECHNOLOGIES - Let's Discuss Them Here -- Ignore unavailable to you. Want to Upgrade?

To: Darren DeNunzio who wrote (4253)	6/20/1999 10:35:00 AM
From: Frank A. Coluccio	Read Replies (1) \| Respond to of 12823

Darren, suggested equals safe. I've been following McQuillan's columns for years in BCR and elsewhere. Whereas some regard him as a visionary, forecasting events into the future, I see him as changing his mind with market dictates on most issues. His views on ATM come to mind here. His DSL views no doubt will follow suit. ""Perhaps the word "willing", should have been replaced with "forced". "" The euphemism used to denote "forced" is business imperative. It's so much less sinister. Is suspect that 39.95 might actually be low from the standpoint of present costing and ROI expectations, using the Moore Curve as a backdrop at this time. But in time it will seem high, no doubt, allowing greater returns for the carrier. We're not seeing 12 month break evens here, rather something like 24 to 30 months. But discreet ROIs are not the issue here, as much as protecting the larger basket of services, as virtualization and single medium bundling capabilities kick in. The ILECs know that eventually all services could conceivably be supported by the lower layer transmission and data link layers in the emerging technologies. This can be achieved by using either an Ethernet or ATM variant in the HFC cable modem model, or DSLs and some wirelesses. If they let the physical transmission and data link layers get away from them, then they lose the hooks to the upper layer services and content bundling, as well. From this standpoint, I think that they would be amenable to lowering the path rate, if "forced" to. I allow that deploying DSLs are expensive now, and that they will become less expensive with time, again, following the Moore Curve down its inevitable slope. The service provider must be cautious not to price the DSL service it out of range entirely at this time, while leaving some room for cost and pricing elasticity while the uptake numbers are tabulated (which is crucial for their projections to be valid). They must recognize that whatever level the pricing is established at, at this time, will likely have residual effects on what they could charge longer term, going forward. And they must allow some margin for reductions and discounts for when competition heats up in the wirelesses and cablemodems, so that a 25% to 40% cut will not put them entirely into bankruptcy. Comments, corrections, welcome. Regards, Frank Coluccio ps - I received a number of PMs concerning some of the content and views presented in the referenced "virtualization" article I posted upstream, much of it critical, which I welcome, especially since the views expressed therein were the author's, not mine. Unfortunately, I find myself running dual track discussions when they come in the form of PMs. I'll try to consolidate some of the criticisms, many of which were mine initially, as well, and post them if and when they reach critical mass.