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To: drsvelte who wrote (23500)	9/7/1999 1:23:00 PM
From: drsvelte	Read Replies (1) \| Respond to of 68390

Re "Stinger" Copper Mountain Networks (CMTN) 102 3/8 -4 5/8: Amid the myriad boilerplate risk factors in an IPO prospectus, there is occasionally one risk that is more than boilerplate. In Copper Mountain's prospectus, there was this line: "Lucent announced an agreement to acquire Ascend Communications, Inc., a competitor of ours which offers a competing DSL solution. As a result, Lucent may seek to reduce the marketing and/or sales of our products in favor of competitive products manufactured by Ascend." Today, Lucent (LU) did indeed announce that its Ascend acquisition will produce a competing product called Stinger. As with Copper Mountain products, Stinger will be targeted at local phone carriers and ISPs who wish to offer customers both high bandwidth voice and data capabilities over existing copper lines using digital subscriber line (DSL) technology. Lucent's Stinger products will allow for up to 16 voice lines over one copper line, comparable to CMTN's products, though Lucent claims as its advantage that Stinger will also prioritize voice packets, thus reducing disruptions in voice service. Stinger is available immediately. Copper Mountain obviously recognized the possibility that its Lucent partnership might not prove to be enduring; the following was part of the Copper Mountain/Lucent contract: "Lucent may contract with other manufacturers and suppliers for the procurement of comparable products. In addition, Lucent shall, at its sole discretion, decide the extent to which Lucent will market, advertise, promote, support or otherwise assist in further offerings of the Product." In short, Lucent had no obligation to sell or support Copper Mountain products, it simply had the right to do so under the terms of the contract. Lucent made no mention of its Copper Mountain partnership in today's announcement, but Lucent bought Ascend for a reason, and today's product roll-out is certainly part of that reason. Copper Mountain has a first mover advantage in this market, but unlike the Internet portal world, the first mover advantage doesn't always count for much when you're up against powerhouses like Lucent and Cisco Systems (CSCO). The huge sales forces of these companies can often overwhelm smaller competitors. Thus far, we haven't heard much from the brokerage community on the new Lucent offering or its implications for Copper Mountain, though SG Cowen did say Stinger would impact CMTN revenues. - GJ