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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: kenk who wrote (34070)	2/9/1998 4:06:00 PM
From: Sowbug	Read Replies (1) \| Respond to of 61433

It's not ridiculous at all. I doubt those pee-wee ISPs are able to make money -- didn't EarthLink have some serious earnings trouble in the summer? -- so the $14.95 ISPs are now $19.95 ISPs, and the $19.95 ISPs are likely going all the way to $24.95. Finally my crappy ISP will be able to afford to buy some duct tape so they won't accidentally kick the plug out of the wall anymore. Maybe they'll also buy some Ascend equipment, too. Mo' money mo' betta.

To: kenk who wrote (34070)	2/9/1998 4:08:00 PM
From: Gary Korn	Respond to of 61433

AOL increases rates and brings in some price stability for internet service >> other ISPs find they can slightly increase their rates >> Revenues increase with no additional costs >> more revenue equates to more cash that they can use to finance additional infrastructure >> ASND and competitors benefit from additional business from the ISP segment. Any comments on my ridiculous speculation???? kenk, Not ridiculous at all. I think one reason the ISPs are so tapped-out (cash poor) is because competition has driven down the rates they can charge. If they can bring in more money, for sure they will spend some on infrastructure. Mory said in Scottsdale that ISPs were tapped-out, one reason for the flat RAS/RAC market. Arguably, higher rates might deter some consumers (hence, depress any increase in demand by prospective internet users). However, in this case, I think the $2/per user increase readily will be absorbed. Bottom line: The revenue gain from the $2 increase should more than offset any customer losses. Gary Korn P.S. My own ISP is in bankruptcy. A rate increase can only help.

To: kenk who wrote (34070)	2/9/1998 4:38:00 PM
From: Gary Korn	Read Replies (3) \| Respond to of 61433

AOL increases rates and brings in some price stability for internet service >> other ISPs find they can slightly increase their rates >> Revenues increase with no additional costs >> more revenue equates to more cash that they can use to finance additional infrastructure >> ASND and competitors benefit from additional business from the ISP segment. Any comments on my ridiculous speculation???? kenk, I just want to respond again to your brilliant observation. Think back to when the ISPs began their price war. Wasn't it after that that RAS/RAC demand flattened? Heck, we could have predicted then that it would be bad for ISP suppliers and, in fact, RAS suffered down the road. (How many ISPs, by the way, have leased equipment, and therefore have iffy lease payments to the likes of ASND.) If there is any chance that ISPs nationwide can raise rates, that simply has to be good both for new equipment purchases and for the ability to make payment on old purchases. Importantly: What would be the nationwide revenue impact of a $2/user revenue increase? That would be a helpful piece of information (to assess what funds might be available for capital purchases). Gary Korn