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Technology Stocks : The *NEW* Frank Coluccio Technology Forum -- Ignore unavailable to you. Want to Upgrade?

To: A.L. Reagan who wrote (1133)	10/24/2000 2:41:26 PM
From: A.L. Reagan	Read Replies (2) \| Respond to of 46821

Editorial comment on our Austin situation: Sounds like the script for a sequel to Dumb and Dumber. Why? In addition to the obvious duplication Frank highlighted earlier, you really have to ask yourself what is the R.O.I. on such enterprises, factoring in operating expenses such as marketing, content costs, billing, customer service, bad debts, repairs, etc. etc. required to run a service provider. The $1,000 a POP folks will be lucky to get 1 in 5 of the homes they pass as customers, given all the other choices available. So, each actual subscriber may require $5K capex. It is hard for me to see the typical homeowner forking over more than $30 per month for basic service (meaning the cost of the pipe). Factor in all the operating costs of being an SP, and it looks to me like a pretty dismal R.O.I. [Say at best SP operating income = 30% of gross revenue, so maybe $9.00 per subscriber pre-tax monthly cash R.O.I. divided by $5,000 capex - yuck.] In addition to these two outfits, we have a number of CLEC's laying fiber in town (at least according to plans) to provision business customers. Both Southwestern Bell and Time-Warner have demonstrated in the past the ability to cut prices to keep market share.

To: A.L. Reagan who wrote (1133)	10/25/2000 5:13:31 PM
From: Raymond Duray	Read Replies (1) \| Respond to of 46821

Re: A glaring omission noted in Austin BB start-up battle coverage. Hi Allan, Thank you for posting the interesting article about the Austin scene. :) Any clue as to what the projected monthly fees are to be for the Grande Communications and WINfirst networks? This seems key to the eventual success of either effort. The figure quoted for the all-optical distribution (The Denver company says it will spend $1,000 for each home that its network passes. ) would be a tremendous advance in the state of the art. It compares remarkably well to the first of these systems, pioneered in Tsukuba City, Japan, where the FO infrastructure was installed at a cost of $500,000 per residence served in the early '80's. FWIW, that system was eventually abandoned as unfeasible. Wonder why. Best, Ray