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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: The Ox who wrote (2972)	4/30/2002 5:53:57 PM
From: Crossy	Respond to of 95487

Michael, yes and no - OTOH they do know that they can continue gouging even during broadband buildout. OTOH they already have to contend the first REAL onslaught onto their lucrative high margin business franchise (T1, T3) in the form of HFC-cable networks and BLECs (like Cogent, Telseon etc.). The difference with the railroads 100 years ago are manyfold.. 1) There was no "assymetric (de)regulation" mandated. No carrier could use a regulator's decree to force his vehicles (trains) onto a competitors track.. 2) Railtracks were essentially a "fixed asset". If fully utilized new tracks needed to be built. Not so with fiber. DWDM marches on, creating a situation where fiber buildout produces ZERO incremental costs for the fiber buried into the ground/conducts years ago. Only incremental costs would be for the boxes to light additional wavelength/channels etc.. Instead of a "scalar" situation where ALL assets would have to be duplicated to double output, we get a different kind of expansion-path where doubling of bandwidth comes at hand with cost-decrees for constant bandwidth increments (and with technical progress this trend is further strengthened) I would highlight it with an analogy "A clash of business models" - here a "technological" model - using a variant of "Moore's law" getting more bandwidth to users at decreasing costs- there a "utility monopoly model" trying to exercise "customer ownership" monopoly power to extract constant revenues (= would mean hugely growing profits if costs decrease as feasible). IMHO the notion that a Moore's law model won't be cranking out profits at all is nuts - just look to Intel/AMD/PowerPC in CPUs. Their power goes up all the time, cost per MIPS is on a landslide acc. to Moore's law. Surely the industry is cyclical but INTC and AMD can do fine. IBM / MOT also. Back you up that the future is Ethernet. Who needs "voice/data" convergence if this necessitates ATM, Frame Relay, SONET that in reality no one needs ? To business, it's : "Just give me the data at Fast Ethernet for $1k/month - pls. - voice needs are gladly satisfied by any RBOC/IXC". The "integration opportunity" to enable voice+data over the same lines (CAll Center/IP aggregation) doesn't justify the effort if entire new overlay networks have to be thrown just at that.. rgrds CROSSY