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To: tom offenbach who wrote (19275)	1/26/2000 10:11:00 AM
From: Frank A. Coluccio	Respond to of 29970

Hello Tom, IMO, your points are all well taken, but they would be more poignant ones if the leaders at the top MSOs were in alignment with you. ".. as the supply and access/availability of/to broadband services increases." With the exception of some level of relief afforded by T's Lightwire if and when they begin to deploy it, most of the others seem to be fat, dumb and happy now, having already done what they consider to be sufficient levels of upgrades. Even in T's case, despite Armstrong's trivializing the matter of congestion yesterday by effectively stating, "all we have to do is go out and add fiber in the field," they are holding LW out as their ace in the hole.. but even here they do so primarily to extend the life of HFC, although with a little more work they can approach the fat IP pipe capabilities you referenced. It's still unclear to me whether they will make that transition at this time. They have considered it in a LW2 version, but they must still take into account the financials (depreciation, cost justifications, and not just a little bit of face saving) i.c.w the still ongoing HFC upgrades which would be partially cannibalized, effectively, in the process. The HFC upgrades which the MSOs have completed or in the process of completing, btw, are now proving themselves to be inadequate for the kind of two way high capacity broadband pipes which will be needed in the near future due to the many constraints which we've covered here in the past, before. Right now we're in the top half of the first inning, and signs of stress are already showing in some parts. By the time we get into the 3rd od 4th innings, we're going to see a profound uptick in the number of unhappy users. Today's casual surfers and the entertainment downloaders who lie just over the horizon will use more bandwidth resources than yesterday's telecommuting power users. Actually, today's casual surfer on broadand cable and dsl will use orders of magnitude more bandwidth than earlier power users of the 1996-1998 time frame, if you care to look at it in those terms. While I see room for your assessment to be right on the money at some point, I don't see commoditization happening here yet in the last mile just yet, to the extent that it would be possible under more competitive circumstances. Instead, I see an iron grip on bandwidth availability being maintained by the franchise holders, tantamount to controlling supply in the classic way which their monopoly statuses have allowed over time, whether intentional or due to a set of causalities which occurred purely out of happenstance, or otherwise. Trnasistors are also commodities, but that doesn't prevent AMD and others from attempting to overrun Intel at some point through improved efficiencies and innovations. And so it will be with bandwidth, if other competitive entities are allowed in, or choose to use their existing rights of way, such as the power utilities seem prepared to do at some point. Regards, Frank Coluccio