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Technology Stocks : (LVLT) - Level 3 Communications -- Ignore unavailable to you. Want to Upgrade?

To: Frank A. Coluccio who wrote (998)	5/19/1998 2:02:00 PM
From: Nils Mork-Ulnes	Read Replies (1) \| Respond to of 3873

Frank, you make a lot of valid points: "Burying the dinosaurs", as you put it, is not exactly as easy to do as all these hype-pieces in the media make it sound. As you say there are realities like LNP, 911, Universal service, and all that. CAPs and CLECs have been cut a lot of slack in challenging the incumbents, and have made very nice businesses out of it by targeting the cream: urban businesses. A very valid question is this: can this go on, and will VoIP players, local-loop bypassers et al be able to skirt these responsibilities. Another point you mention, that all this supply has the potential to do some serious damage to ROI... Well, there are several questions in my mind about this. With all this capacity from so many players, isn't bandwidth becoming a pure commodity? And aren't margins going to become razor-thin? Isn' that going to make transport a potentially lousy business? Are the players with the lowest cost going to win? Of course there's also the issue of access to all of this bandwidth. What about the ultimate bottleneck - the local loop? Will costs and RBOC control mean that we'll never get to enjoy all that bandwidth in the backbones? As you mention, the incumbents don't want to cannibalize their existing cash cows - for one thing, their shareholders would not be happy. Why deploy DSL to biz-customers at half the price of T1? That's one hell of an opportunity for new guys like Covad.... There is one important distinction here: that between the business market and the residential market. These new players are mostly going after the former - they're easier to access, more profitable, etc... This is where the battle is. I think that despite all these uncertainties, we are looking at a large enough market that LVLT et al can carve out nice businesses for themselves - even if that is a bet based on previous examples. Sorry....Enough rambling....