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

To: lml who wrote (2623)	12/21/1998 9:10:00 AM
From: WTC	Read Replies (1) \| Respond to of 12823

lml: ILEC capital investment is increasing driven by local perception of competitive imperatives. The holding companies that control the capital purse strings, though, have a lot of alternatives for the few hundred million dollars that it takes to enter the advanced services market with any hope of a profitable result. They can be thankful for xDSL creating that investment option; if FTTC/FTTH were the only technical alternative for providing advanced services, they would all be many billions of dollars from ready-to-serve, with 3+ years to make any dent in coverage, and probably 15+ years to get to, say, 80% coverage, perhaps the ultimate economic level of deployment. As for < I would suspect that my ILEC will avoid expending the capital until they are threatened with competition from the cablecos.>, for most, that day is here, and it arrived in 1998. If it is still in the future, it will probably occur in 1999. Against that sort of emerging competition, ILECs are beginning to roll xDSL product. There is more to developing a product than just meeting and trying to neutralize emerging competition. The ILEC initiative also has to feasible and sensible from a technical and economic standpoint. Some non-trivial networking, product, and cost issues seemed to slow deployment progress, but the internal ILEC efforts have not abated. Nonetheless, those issues have made a concerted xDSL push prior to mid-1998 really problematic for most ILECs. Remember that cable advanced services offerings tend to be spotty, since the MSO coverage is spotty (I don't have to remind you of that, though, do I?) The ILECs have larger contiguous footprints, and they want any new offering to have as near ubiquitous and simultaneous availability as possible -- that maximizes value from the high promotion costs. Wishes aside, there are still big issues about getting advanced services to the hardest, and therefore last, 30 - 35% of customers (those numbers may seem high, but it seems to be the nature of ADSL. A lot of service area is really hard to serve.) I think you have correctly diagnosed yourself in PacBel's last 30%, and anyone guessing when or if they will push xDSL into those areas, regardless of the attractiveness of the demographic, is hard. Your eventual access a few years hence probably depends on the success of the easy ones over the new few years. I would counter your wireless services observation with my view that there is today no wireless alternative for residential advanced services; by residential, I also mean consumer service, i.e., in the $40 - $50 maximum price range. We could argue about DirectPC, but I contend it is not a mass market offering for a variety of reasons. Metrocom's Richochet II at 128 kb/s, when it is introduced in mid-99, will be an interesting product to watch. If any MDS company can get its act together and exploit the new rules that permit 2-way wireless MDS data services, that will be quite interesting. I would note, though, that the economics of that business are definitely not drop-dead beautiful. And the only MDS operator that seems to have the financial resources now to pull that off in the next couple of years is Bell South Entertainment. However, They put the emphasis on ENTERTAINMENT, with no announced plans for MDS wireless data services. Seems they have an affiliate that specializes in data services ...