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Technology Stocks : LAST MILE TECHNOLOGIES - Let's Discuss Them Here -- Ignore unavailable to you. Want to Upgrade?

To: Hiram Walker who wrote (2255)	10/26/1998 7:38:00 AM
From: MikeM54321	Respond to of 12823

Thread, A good, very general, article on coaxial as a "Last Mile" solution. MikeM(From Florida) __________________________________ AT&T Asks: For whom the Bell tolls? It would toll for baby Bells if 'Ma' gets her way WASHINGTON -- Cable telephony may be coming soon to a home near you, and that's not good news for the regional Bells. AT&T, which announced plans several months ago to acquire Tele-Communications Inc. (TCOMA), has been discussing a deal with Time Warner under which "Ma Bell" could sell local services to customers via cable modems. If those two deals go through, AT&T could gain access from half to as many as two-thirds of all American homes with cable, now estimated at 66 million. Of course, the Bells still possess plenty of financial muscle and have their own designs on a portion of AT&T's long-distance market, though "Clearly the lines of competition are blurring there. It'll happen, but the question is when." Regulators have blocked their entry into that arena so far. And the telecommunications sector is moving so swiftly that the competitive landscape today could be completely reshaped tomorrow. Nevertheless, AT&T's (T) cable telephony strategy seems -- right now at least -- likely to emerge within a few years to pose the first real direct threat to the Bells, who control virtually the entire "last mile" -- the phone line to the home. "Clearly the lines of competition are blurring there," said David Burks, an analyst at J.J.B. Hilliard Lyons. "It'll happen, but the question is when." Future attractions Industry observers say that time is not too far off. Within the next year, PC makers such as Dell (DELL) and Compaq (CPQ) are expected to offer cable modems in their computers. That would make it easy to hook up cable to the phone, initially allowing AT&T or cable companies to offer internet access. "It just behooves a cable company to take a look at that," said Patti Reali of Dataquest, a market research firm. Beyond that, the cable companies still have to spend billions of dollars to upgrade their equipment to make it compatible for transferring voice calls. Indeed, that's the big sticking point in AT&T-Time Warner negotiations. "The only problem here is the structure of the partnership," said Eric Melloul of Argus Research. "AT&T doesn't want to pay for the upgrade. Time-Warner (TWX) would like AT&T to contribute." One way or another, cable companies will get into telephony. Most have been upgrading their networks to digital -- Time Warner is ahead of the curve -- in preparation for the Brave New World of telecommunications. That was the intent of a federal telecom-deregulation law enacted in 1996: to prompt local, long-distance, wireless, cable and satellite companies to invade each other's businesses, thus spurring innovation and driving down prices for consumers. "Once you have access to the home, you want to sell as many services as you can," Melloul said. As for consumers, he said, "if you are a cable subscriber, why not switch to cable telephony" and take advantage of the super access speeds. Trading expertise So why would a cable company want to take in a giant partner such as AT&T? Simple. AT&T has the expertise in the marketing of telephone services, the intricate technical know-how, the backoffice operations such as billing, and so forth. "That's what's going to be a problem (for cable companies) more than anything else," Reali said. "It's a question of how many balls can you juggle at once." Meanwhile, the Bells, far smaller than AT&T individually, aren't sitting still. They are starting to offer so-called Digital Subscriber Line, which provides enhanced data-transfer speeds over older copper wire, though its not nearly as fast as cable. If the Bells can get the price right, however, analysts believe it could help fend off the competition. "I don't think we say the Bells have lost the game. They are still in the race," Melloul said. "Things can change quickly."