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

To: Frank A. Coluccio who wrote (6570)	3/8/2000 12:11:00 PM
From: Stephen L	Respond to of 12823

Frank, Yes market structure and conditions will dictate what services will be able to extract rents. And a la microeconomics you are quite right that landlords will be in a position to charge higher rents during time of low vacancy rates and strong economic activity (one determining bargaining power and the other the marginal product of the respective factors of production). During weak markets these value added services can be given away to "differentiate" one building or asset manager from another. Both examples are happening now in various markets. I was trying to convey the point that these telephony services evolve and unless there are certain economic incentives for the service providers to update their services (realize that voice isn't going to pay the bills forever) their beloved tenants will vote with their feet or contract with other third party service providers. Although the jury is still out, it appears that building owner can not grant an exclusive contract to any single provider: a varient of open acees applies here. So if ABCD riser co decides to only market old services at above market rates why won't I or my IT group contract with some LMDS, MMDS, Optical Wireless Start Up or other broad band service providers. What if (and there are so many what ifs) wireless broadband via HDR or some other cell technology pushes data transmission speeds to 1 gig bps. If the incentive structures are in place to motive service up grades and the Riser MGMT team "get's it" and changes their costs/services they will succeed brilliantly. Most real estate orient shops have a bit of inertia and usually pursue changes reactively. That is my worry and concern. I am not saying it will happen. To the extent that the VC or internal technologist continue to work with the product development people, these companies could do very will. I still think these companies are great CLEC food. Regards, Steve