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Technology Stocks : Voice-on-the-net (VON), VoIP, Internet (IP) Telephony -- Ignore unavailable to you. Want to Upgrade?

To: Frank A. Coluccio who wrote (959)	7/10/1998 12:24:00 PM
From: Bill	Read Replies (1) \| Respond to of 3178

Frank, the issue isn't the technology. What's so precious is the customer connection, whether on old copper loops or updated FTTx infrastructure. The ILECs cannot give that up, without having some business already in place to replace the revenue. In my view, that is the crux of the conundrum they have with CLECs and long distance. For example, BellSouth had 1997 revenue of $15 billion. 90% was from wireline services which includes among other things, local connections, enhanced services, toll calls, etc. If they relinquish the loops to competitors, they would find $13 billion of their current revenue in jeopardy. Moreover, $8 billion was derived from the loops alone. This cannot be replaced easily, even by well managed service providers, let alone the plodding incompetent management of these utilities. As for the Telecom Act of 96 spurring local loop competition, BellSouth's local loop penetration has risen since the Act was passed. They will lose in court and again in Congress. The only real hope they have is DSL. If they could offer it themselves in scale to their base they could add value to their loops and compete with CLECS. Unfortunately, they haven't come to that same conclusion and prefer to slug it out in court over long distance. Bill