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To: E. Davies who wrote (13235)	8/2/1999 8:05:00 AM
From: Frank A. Coluccio	Read Replies (1) \| Respond to of 29970

Eric, sorry I didn't reply earlier. Now's just as good a time. You say: "It might be too soon to build for massive bandwidth demand." This gets back to my earlier observation. If not now, then when?... given the enormity of the task and the epoch-ity of the time frames required to sweep the nation's tens of millions of homes passed? Your earlier observations were correct, juxtaposing the cable cos with the rbocs demonstrating the similarity of their attitudes at this point. Only, the rbocs may be coming out of it at this point, albeit only in a way that elephants can react, while the MSOs appear to be saying, "Hey! We've shown you what's in our hands! Now, what further do you expect of us?" The problems associated with that approach should be obvious to them, but I'm rather certain that they are still living the same dreams of the mid-90s that are only now being fulfilled. Moores Law doesn't lull or subside, however, long enough to allow for the rebirth of dreams. If it took three years to do 500 to 2,000 homes per segment buildouts, then it will take a like amount of time to re-do those builds into segments of 75 homes apiece. I therefore don't think that they will have the luxury of delaying the commencement of these reconfiguration activities, as you suggest, if they are to be competitive in the years 2001 through 2003. That would have required that they commenced in 1998, so they are already behind the 8-ball in this regard. "There is a far better way. That is to make broadband more valuable than it is today. Broadband applications are the key, not lowering the price. Make broadband an essential part of everyday life and people wont blink for an instant at paying $40 a month." Perhaps. But do you really think that is it the place of the broadband facilities and service providers to supply those broadband applications? Or, are those better left for the user's own selections? As users become increasingly sophisticated they are at the same time increasingly loathed to be force fed anything. They don't want to be spoon fed what they view, or what they are engaged in in the way of interactivity, by their cable TV operators. With few exceptions (which are tied to program TV and other m-m entertainment types of services) they will, instead, prefer to exercise their own choice, to explore the vaster reaches of the universe with a sense of zero restrictions on what they can view. The place of the MSO/ATHM or whomever RR type of function, is to supply plumbing and caching, but not the launching of the content itself. To do so leaves the door open to too many forms of conflicts and is at best a dubious investment with little assurance of a return. That is, of course, unless they employ measures which restrict outside competition to their own applications, which is a possibility through some subtle means, which is not as far fetched as I would have believed, earlier. I think that the MSOs would be wise to recognize this, and avoid spending the resources for yet additional white elephant exercises. All one has to do is recall the visions of the cable TV supermarket model, with those shopping carts and ringout counters, to understand how fast things become prematurely misplaced, or worse, passé. Am I saying that there will be none of these supermarket applications now or in the future? No, not at all. But what I'm saying is that those applications will be launched by virtual supermarket operators, and not by cable TV operators. Regards, Frank Coluccio

To: E. Davies who wrote (13235)	8/2/1999 2:52:00 PM
From: Jing Qian	Read Replies (1) \| Respond to of 29970

There is a far better way. That is to make broadband more valuable than it is today. Broadband applications are the key, not lowering the price. Make broadband an essential part of everyday life and people wont blink for an instant at paying $40 a month. Eric I agree improving the broadband applications is a better way. But it takes time. How long should ATHM wait for the spread of BB applications to stimulate interests in @Home service? The widespread proliferation of BB applications won't be a reality for many years. Can ATHM afford to wait that long? I do feel ATHM should be more pro-active to jump start the sub growth. 160K a quarter doesn't seem strong enough to counter AOL.