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To: Frank A. Coluccio who wrote (695)	9/3/1998 5:49:00 PM
From: Sam Citron	Read Replies (4) \| Respond to of 5853

Frank, Sorry for ignoring your earlier post. I have not read Toffler since the late 60s and would never take Newt seriously. I was just trying to stimulate some thought on whether Metcalfe's law will be as benign to the companies that are building the nets as is generally assumed. Why should it be any less chaotic that the effect of Moore's law was on the MIPS business (a.k.a. the computer industry)? Perhaps it is no coincidence that Equant and IBM are both choosing the same month to unload their global networks. Are these early data networks destined to become mainframe-like dinosaurs as their customer bases desert them for a dizzying array of alternative carriage possibilities? There is an assumption that the skyrocketing demand for bits/mile/second caused by the net is going to make the network providers rich, as the demand for voice made phone companies rich. This is a fallacy. Technologies like DWDM, LEOS, and HFC are pushing bandwidth supply through the roof. There will be no regional "natural monopolies" as bandwidth will ignore sovereign borders over telephone lines, coax, fiber, and microwaves. Competition will be intense and leapfrogging opportunities will actually favor latecomers rather than first movers. Technology churn will be as rampant as customer churn. Low-cost-provider status will be key, but it too will churn. Yes, the winners will be those who can exploit economies of scale and scope, and form creative partnerships with content providers and data distributors. It is way too early to predict who those winners will be since we are still early in the network buildout phase. The consolidation phase will be more telling. Sam