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

To: Srinivasan Balasubramanian who wrote (1557)	1/21/2000 10:25:00 PM
From: zbyslaw owczarczyk	Respond to of 2347

Srinivasan,what is mysterious that analyst representing respectful firm like ML is making his analysis just based on what management of a company is telling him,witout in-depth analysis how it has happened(warrants). Then in the report is pleased with unexpected profitability(LOL), and is giving "the real story" target price 32, and "hype story" 115 or so. Well, somehow they have to let preferred client get out at higher price, and get in at lower price. Just wait for stronger wind and house of cards will collapse while rock will stay firmly. Zbyslaw

To: Srinivasan Balasubramanian who wrote (1557)	1/22/2000 2:12:00 PM
From: Mark Laubach	Read Replies (2) \| Respond to of 2347

I haven't been reading this as actively as I should be (been busy writing a book...<g>) I don't have numbers to support this, but I believe that the TERN head end can't support more than about 250-300 modems, maybe up to 500. So, compared to the Com21 COMcontroler, which supports up to 2000 modems, TERN would always have to sell more head ends to support modem penetration. That lead me to think about this technical capacity issue. For every TERN head-end deployed, the cable operator is throwing away downstream bandwidth. Com21 (and DOCSIS) use 64QAM modulation in a 6 MHz channel. The raw data capacity is on the order of 30 Mbps. The TERN system's raw downstream bandwidth is on the order of 14.4 Mbps in 6 MHz if I recall correctly. Looking at the raw bandwidth, every time an operator deploys TERN, they render just over 50% of the downstream channel inaccessible. TERN is a symmetric system, same raw capacity upstream as downstream. Given TCP/IP characteristics and residential web browsing models, the downstream data rate is about 8x to 10x the upstream data rate. This is the asymmetry of larger TCP Data packets going downstream and minimum sized TCP ACK packets going upstream. This means that TERN's technology runs out of downstream bandwidth first, or said differently: for reasonable TCP/IP flows, when the downstream runs out, the upstream is way underutilized, wasting upstream capacity (and MHz). The best deployment is to have the fattest downstream channel with scalable upstream bandwidth. That way, you maximize the number of cable modems per 6 MHz downstream (which always has a $'s per 6MHz value for the cable operator). As the needs of those modems grow, the operator can add more upstream capacity to suit, thereby maximizing data capacity per MHz allocated. This is why Com21's system is designed the way it is. This is why DOCSIS is designed the way it is. What I can't understand is why a cable operator would view TERN as a long term solution when it's business model wastes $/MHz downstream and upstream with each deployment. Clearly, every operator must want to get to DOCSIS 1.1 as soon as possible and quickly replace equipment that doesn't already maximize revenue per MHz allocated. Mark