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To: rhkohnen who wrote (8949)	11/13/2000 5:09:04 PM
From: RobertSheldon	Read Replies (1) \| Respond to of 15615

If the market assumes constant demand then a 60% reduction in revenues could be projected. No, you are wrong - I already have explained to you the beauty of elasticity. Its running more than 3:1.

To: rhkohnen who wrote (8949)	11/13/2000 11:20:53 PM
From: Frank A. Coluccio	Read Replies (1) \| Respond to of 15615

Bob, "The key assumption is constant demand which IMHO is false." I disagree. The demand can increase and the pricing can continue to fall. It does not follow, however, that every carrier will make ends meet. Some newer carriers coming into their own in 2002-3 will be running platforms that are some factor (ten to a hundred times, if we're only talking about bandwidth and not higher level services) more efficient than those that were installed in 1998-2000. I don't think that we can accurately conclude that the fate of those newer carriers should be assessed by the predicaments that will be faced by some of the "older" carriers. In Internet time, five year-old optical platforms (2002-3 being the point in time we are considering here, supposedly, at which time you are suggesting the demand will not be keeping pace with supply) are indeed old platforms, IMO. By then we will see international data-mining collaborations and other bandwidth-devouring applications taking place that are economically unfeasible today, due to today's still-relatively 'high' cost of bandwidth. The price of bandwidth has a long way to go down before it stabilizes, assuming that it ever does, and upstart carriers aided by ever improving optical technologies will always find a window to make hay. Just how long they can maintain that window in the open position is another story, before someone else comes along and does it more efficiently to them. And so it has gone, and so it will go. FAC