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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 (2634)	12/21/1998 10:11:00 PM
From: WTC	Read Replies (1) \| Respond to of 12823

Traditional cable vs. telco regulation seems possibly turned on its head here, but not in the general case. First, it is usual for cable to get a pass on serving any customers where the density is less than 20 homes per mile. To my knowledge, the state of Conn. is the only large-scale (statewide) exception. [I'm open to correction on that!] In Conn, the cable operators have to commit to build out to reach all homes eventually, usually during the duration of the current franchise period, typically 10 years. Elsewhere, cable is not ubiquitous. Even in high density areas, e.g., Queens, North Brooklyn, and Bronx NY, for years there have been hundreds of thousands of unpassed homes. Time Warner and CableVision Systems are finally getting cable to some of these areas, considered not top demographic, and in some cases dangerous places to work. They had no problems with the regulators for years with this red-lining. By comparison, all telco regulated exchange services have to be built to reach all customers with very few exceptions -- the principle of "Carrier of last resort". The big perceived exception is not really an exception to this guideline, it involves non-regulated services. Telco advanced services are an odd bird because the decision as to whether an ILEC will offer xDSL services from the regulated network vs. a non-regulated affiliate is typically a decision yet to be made, on that will largely hinge on the comparative rules promulgated by the FCC in their CC Docket 98-188 order. Most ILECs are at least tentatively treating xDSL like an eventual unregulated service. The other angle to xDSL availability is not really a political or economic deployment decision, it is purely technical. Since xDSL flat will not work in certain plant situations, it would not make much sense to require an ILEC to provide a service in locations that are technically impossible to serve. A regulatory body will usually encourage an ILEC to deploy its services as widely as possible, and forbid red-lining based on the appeal of a neighborhood as a market, but they typically do not challenge physics. With cable, if the system is 2 way and the home is passed, a cable modem should be installable (lots of details like power-passing taps and plant conditions have a bearing, but these are all addressable issues.) I wonder is some cable regulatory bodies have suspicions that the benefits of advanced technologies might be artificially restricted to just certain customer areas, and their response is to require virtual ubiquity in availability before any revenue can flow. I don't know, but I suppose some cable regulators must feel they need a bigger club sometimes. It seems like few cable regulators ever get and hold the upper hand against their regulatee. municipality's jurisdiction. I take your point on wireless as competition if the wireline provider can't get a service package together. Yours seems like an observation as the the desirability of service package bundling. Many pundits agree with that view, and providers of all stripes are struggling to get in a position, through service developments and acquisitions to be package providers (typically wireline voice, data, wireless voice, long distance, and perhaps video, maybe paging services.) One big reason ILECs are moving on xDSL is to check off the data box on the bundling chart -- it may be more that than expectations of a big net income boost. The bar is moving to expect data rates and always-on capabilities that an xDSL or cable modem is needed to provide. Anytime the incumbent provider screws up bigtime, or just disappoints a large contingent of current customers, there will be a cost in retention. Sometimes the incumbent gets a grace period to make amends to some of the victims of a screw-up simply because the alternative provider is not seriously in place in that market with the alternatives the customer wants. Increasingly, that second chance will not obtain.