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To: Road Walker who wrote (165726)	6/6/2002 8:48:37 AM
From: Amy J	Read Replies (2) \| Respond to of 186894

Hi John and Thread, RE: "while the future of the communications industry is bright, it faces a difficult investment dilemma. The capital investments of the past several years have not yet delivered returns" About $600B in telco debt per one of the leading comm vc firms. (figure not confirmed.) Larger than S&L. RE: "the industry cannot afford additional investments unless they lead to new revenues." True RE: "But without innovation, growth of the communications industry will be severely limited. Growth will depend on accelerated broadband development" Innovation in that area will not accelerate, until consumer broadband deployment is there. Catch 22. Even though access points are growing, consumer broadband applications is not an area that's exactly alive in the entrep community. Over the past couple years, I've bumped into entrepreneurs from three consumer broadband application startups, and bluntly advised them to rewrite their business plans and reposition their companies completely away from any dependencies on consumer broadband deployment. VCs don't fund consumer broadband apps, so they either would have to bootstrap in a country where broadband is plentiful (and where intellectual prop laws are reinforced) or wait until the VC community decides to donate their capital to high-tech's charity case, the consumer broadband development. That's not going to happen, so consumer broadband needs to be sufficiently deployed for these types of consumer applications or services to be rolled out. RE: "He explained how broadband needs to become as much a priority everywhere as it is in countries such as Korea and Japan" VCs and entreps are forced to avoid consumer broadband development, until broadband is deployed. That leaves one solution for deployment: the gov't. Maybe in the way of tax credit or restructuring of telco laws. RE: "needs to be truly high speed -- 5, 10 or even 100 megabits per second -- to provide customers with an unprecedented ability to conduct commerce, share information and experience high-value content." The communications industry should create a consistent pitch and vision of the industry requirements. Chambers said 10 years, but Barrett said min of 5MB. Chambers should change his pitch to 7 years and Barrett should change his to a min of 10MB. 5MB wouldn't cut it - high-value content in the home consumer in 10 years would be, say, Dad using a min of 2MB, Mom using a min of 2MB, assuming DVD quality rates, while the kids probably use a min of 3MB each for a variety of datastreams for other application types. Someone there needs to write a white paper on the different creative visionary scenarios, connecting requirements to the vision, and the resulting ROI, so there's a connection between vision and industry requirements. Those of us that can explain the vision and requirements, don't have the resources to be evangelists for the industry. Completely scratch 5MB - it's not aggressive enough. If today's students can challenge a 1GB, then future home consumer end points need to be at a min 10MB on the low-end, especially a decade away. Industry leaders need to state a set of min requirements that's consistent and aggressive enough for broadband deployment to be successfully pitched, which in turn would maximize ROI and tax revenue. Regards, Amy J

To: Road Walker who wrote (165726)	6/6/2002 10:02:32 AM
From: GVTucker	Read Replies (7) \| Respond to of 186894

John, RE: He explained how broadband needs to become as much a priority everywhere as it is in countries such as Korea and Japan, and needs to be truly high speed -- 5, 10 or even 100 megabits per second -- to provide customers with an unprecedented ability to conduct commerce, share information and experience high-value content. In this statement, Barrett ignores the primary reason that broadband IS a priority in Korea and Japan--population density. Running fiber to the curb is an expensive proposition. To justify this expense, you have to be able to project a very large revenue stream per strand of fiber. With Japan's high population density, the high capacity of fiber can be fully used, and making the capital expense to run fiber to the curb can be justified. Thus, the average Japanese consumer can get a pretty reasonably priced broadband service and still give the provider a chance at making a profit. Here in the US, with a few exceptions, we have a spread out population. Even in areas that most in the US think of as highly dense (such as my current environs), the population density isn't close to what is the average in Japan. Thus, providers have a hard time even projecting a profit in the future. You either have to charge a price beyond the average consumer's reach (and thus never reach critical mass), or, if you attempt to price the service to reach a critical mass, you have a cash burn that the markets are no longer willing to subsidize with either debt or equity. Thus, we have a broadband Catch-22. To me, the solution is to find a way to reduce the capital cost of expanding broadband availability. That in turn will allow providers to lower the price point to a place that they finally can generate volume. And that solution leads me to wireless solutions. Think about the voice side of the equation. For years, the voice industry was almost zero growth. Developed areas were well-penetrated, and undeveloped areas just couldn't find the capital. With the advent of cell phones, voice communications in the third world have exploded. The same could happen with data communications. I'm still trying to figure out where to go with this. Teligent, Winstar, and ARTT went broke exploring this solution, which raises the probability that I am just flat wrong with this solution. I think that the technology just wasn't advanced enough, though, rather than there being an inherent problem with the solution. I still think that broadband will become prevalent when we find a firm that comes up with a technology that delivers a dependable, inexpensive wireless solution to consumers.