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

To: MikeM54321 who wrote (5628)	10/21/1999 12:23:00 PM
From: MikeM54321	Read Replies (1) \| Respond to of 12823

Re: SBC Pronto Plans (Webcast Notes) Thread, Well I listened to the entire webcast for the second time. This time I took notes. Although tedious, I would still highly recommend Last Mile investors listening to it. It is full of last mile investment ideas, plans, and costs. Almost the entire hour was devoted to talking about how the Pronto project will turn the Last Mile problem, into a "First Mile," solution. I'll post only what is of most significance to Last Mile investors below. MikeM(From Florida) ****************************** --Pacific Telesis+ Southern New England Bell+Americtech, etc will add up to 60 million access lines. --Pronto will deliver, in three years, broadband to 77 million customers over 13 states and 30 local markets. --Pronto will reach 1/3 of North America. --SBC's Williams investment will give SBC the long haul network to do LD when FCC allows. --SBC's Direct TV will allow them video when their network allows. --Will implement broadband strategy with AOL. --In reality, Pronto was started 12 months ago. --Will push fiber closer to the home using Next Generation DLC (NGDLCs). --Customers in target markets will be within 12,000 feet of NGDLC or CO. --50% of them will be within 6,000 feet. --NGDLCs will be on ramps to ATM network. --Will replace circuit-switched trunk with ATM core. --Neighborhood Broadband Gateways will be fed fiber from the CO. --SBC will install 25,000 Neighborhood Broadband Gateways over life of Pronto. --$4.5 billion will be spent in the last mile/local loop upgrades. --$1.5 billion will be spent for metro/CO-CO/Interoffice upgrades. --Will deploy voice over ATM (VTOA) in their interoffice/tandem network. --Pronto will allow migration path Circuit Switched-VOTA-VoDSL-VoIP --By November of 99, will provision 539 COs with DSL capabilities. --In three years will have provisioned 900 more COs with DSL. --10 million customer will be provisioned for DSL service by year end. --SBC has sold, year to date, 100,000 DSL lines. --100% of DSL customers will have guaranteed 1.5 mb/s service. --60% will be capable of 6 mb/s service. --85% of their business customers will get fiber to their doors. --Reducing copper to minimize interference to DSL to consumers. --SBC forecasts will capture 50% of the broadband consumers or 5.4 million lines. --SBC forecasts will capture 40% of business broadband or 1.3 million lines. --Total broadband lines estimated to be 6.7 million lines or $3.5 billion in revenues by 2004.

To: MikeM54321 who wrote (5628)	10/21/1999 1:24:00 PM
From: WTC	Read Replies (1) \| Respond to of 12823

Mike, your supposition that SBC plans to bundle local & LD voice, internet access, and entertainment video is almost certainly on target -- that bundle of services offered with one bill and one customer service contact point has become a holy grail of communications companies in the US -- who seem to believe you gotta do it all to compete. But "bundling" services does not imply any specific business structure. It is entirely possible for a big, multi-faceted company like SBC to incorporate services in its "bundles" from its network company, from its closely held affiliate companies, and even from outside companies, through resale and co-branding agreements. My point is that when those agreements traverse corporate entities, they can create some regulatory friction that can be expensive. For example, it is complicated for a regulated ILEC to purchase goods or services from its own non-regulated affiliates -- there are affiliate transaction rules that may not permit normal business best practices or what seem to be most appropriate market pricing (to avoid the old Western Electric abuses). For data services especially, the FCC Advanced Services Order makes transfer of xDSL services to a data affiliate very attractive, but there are some disadvantages, too, especially for pricing services to the consumer market. I believe that tradeoff is moot for SBC, though, since SBC apparently stipulated they would separate and move advanced data services from the core into a separate data affiliate. So, who sends the customer this magical bundled service bill? Who owns the brand? Let's say that SBC corporate owns all the useful brands, so either the affiliate or the core could bill for itself and on behalf of its brother company. A customer does not pay its bill, or he just sends in half of the amount due. (And let's also assume that the billing company did not buy gross collectables from its brother company.) How is the loot divided? Or to put it another way, how is the bad debt allocated? Are the regulators ok with the network company increasing their bad debt allowance because a non-regulated affiliate created more total bad debt? (As an extreme here, think of an affiliate in the 900 sex line business. A huge amount of write-off, a huge amount of profit. The regulated business could end up sharing in the bad debt, but not any of the profit. Regulatory red flags all around.) If a company presents itself as providing a bundled service, say, voice, data, and video, it may get away with putting the pieces together under the table where the customer takes no notice and does not care, but it has to render a single bill and a single point of contact for all billing questions, or the perception of bundling is jeopardized. That means that nuances in the billing arrangements and collection procedures wherein multiple company actually provide "wholesale" parts of the customer's service bundle become significant. Business structure definitely affects what those arrangements can be.