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To: MikeM54321 who wrote (1653)	5/24/2000 8:57:00 PM
From: ftth	Read Replies (2) \| Respond to of 1782

Hi Mike, I don't know that I'm the resident ClearWorks expert, but I would say I know more about them than Optical Solutions Inc simply because ClearWorks is a public company and more information is available. I'd like to get someone to confirm the comments I do make since some of the sources I?ve read are fairly old. On the tail end (customer end) of the network is a Set-Top PC (as opposed to a set top box, which isn't PC-based). The company is in Beta trials of a new STPC design, to replace their current STPC. It is "their own" box, but I'm not sure if that means they designed it or they contracted the design, or whether they have some proprietary silicon inside. I'm not even sure this is important, or even desirable (i'll get to that in the second part of the post). Apparently the reason for being PC based is that it controls (or can control) many household functions (e.g appliances, security system); is apparently remotely addressable; and apparently serves as an agent to report such things as gas and electric usage to the utilities (meter readers, your days are numbered!). I don't know how "real" any of these capabilities are--just summarizing what i've read. I can't find any good details of what's inside this box, and all it does functionally. Anyone that knows, please share. As for the barriers to entry aspect, I guess that depends on which of their 4 operating units you mean. I think each one would have to be addressed separately. From the wording of your question, i.e. the trenching and laying aspect, yes there are others that could do this. I think what they bring to the party though is a "one stop shopping" solution, including content provision through their headends. They apparently negotiate a ¬ acre chunk of land in each development which houses this headend. Headend is, of course, a nebulous term. I don?t know exactly what it does in their case. There must be a super-headend, or ?content farm? somewhere, which serves the content to the sibling headends in each community. Self-contained, fully loaded headends in each community would be too expensive. But back to the entry barriers W/R/T the infrastructure installation. It may even be advantageous that others can do the "trenching and laying" since they could sub this out if the backlog gets unmanageable. If all ClearWorks did was infrastructure installation, I don?t think they?d be a very interesting company. That?s not to say that such a business alone (i.e. FTTx infrastructure installation) doesn?t have a solid future, but there are so many other areas in these FTTx deployments that really need to fit together seamlessly that I think they?re taking the best approach at this stage of the FTTx market by providing the ?dirt to data? solution. I think most communities that are interested in a FTTx deployment would be hard pressed to assemble a complete package on their own, and not end up with a fiasco after it was switched on. One thing I'd like to throw out to the thread here is whether the possible barriers to entry and competitive advantage issues are a good way to approach this business. We?ve all been so bombarded and brainwashed by the ?standards are good, and multiple standards are better? press the we cringe on mere mention of the word ?proprietary? (as ?consumers? anyway). It seems in many areas, ?market efficiencies? have neutralized the ability for such advantages to exist (at least in the true Microsoft-like sense of the terms). NIH (Not invented here) rules! We love market dominance as investors, but we hate it as consumers and technology deployers. I think the consumer perspective dominates the thinking of the communities looking to deploy FTTx, so it may actually be better for such a company to appear as non-proprietary as possible. I?ll try to add more details in the coming days, but my ?available bandwidth? is still pretty low. I?d welcome anyone else that can fill in details. I might recommend reading the transcript of their conference call at clearworks.net. It reads like it was generated from a speech-to-text tool, so you have to apply a little smoothing of your own as you read it.