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To: Frank A. Coluccio who wrote (67)	4/14/1999 9:32:00 AM
From: John Coltrane	Respond to of 10485

Hello Mr. Coluccio and all, >>This forms a base for them. I speculate that once this model is established for the competitors, and they have their status quo offerings, the ILECs will attempt to come out with an optically-based (in the feeder and distribution plant), and structurally separated full service DSL architecture of their own at some point. The latter will be for their exclusive use, shutting out all of the newcomers. That's what I see as a strong possibility down the road. What do you think?<< Please, for the novice attempting to absorb this info asap, be so kind as to expand on the above. >>...optically-based (in the feeder and distribution), and structurally separated..."<< Particularly interested in the technology and intent behind this. In the alternative could you provide some pointers to this info. Thank you in advance. ---------------- Carver Mead of Caltech: "Listen to the technology...and find out what it is telling us."

To: Frank A. Coluccio who wrote (67)	4/14/1999 1:11:00 PM
From: lml	Read Replies (1) \| Respond to of 10485

Hi Frank: What do I think? Hmmm. First, I have never really understood how CLECs plan to compete with the ILECs over the longer term for the reasons you point out. But take a look at the market valuations of these stocks. So there is an obvious different point of view. At present, it appears to me that the CLECs are enjoying the fruits of The 1996 Act. All they have to do is invest in new CO equipment, compel the ILEC to provide co-location space at the CO at a reasonable market rate & market the hell out of it. However, while this is happening I see the ILECs doing more thorough planning of a longer term strategy that involves a major investment in state-of-the-art equipment and a pricing strategy that will certainly cause on pinch on the present earnings picture for the CLECs -- IMHO. Not well-versed on The Act, though I should be, I do not understand or know what obligation, if any, the ILECs would be under to share their upgraded plant with the CLECs. I would think that once allowing the CLECs access to the existing plant infrastructure to establish a competitive position in the marketplace, that any new investment by the incumbent would not necessarily fall under "must carry" rules of The Act. Would this be correct? Is this what you are thinking? If so on both, then I would agree this very well may be the incumbent's strategy. On the other hand, such a policy would lead to a redundancy in the local loop. Is this what the Act was designed to do? Or would the ILEC be under some obligation to provide some of this new & expensive capacity to the CLECs at a rate commensurate with a reasonable return on investment? The market seems to indicate, if it is as sophisticated as I would like to think, that the CLECs are not necessarily vulnerable in this respect. What do you think? BTW, Frank, what's the "D" in "DLECs" stand for? DSL? Digital?

To: Frank A. Coluccio who wrote (67)	4/14/1999 9:48:00 PM
From: Bill McCullen	Read Replies (1) \| Respond to of 10485

Frank, I don't see it playing out that way. Based on my understanding of TA96, the RBOCs are required to unbundle all network elements including DLCs and Fiber to the Curb, Fiber to the Neighborhood, etc, systems (though no one has figured out how yet). This unbundling requirement has inhibited investment in the local loop if anything. I spent several years working on fiber based carrier systems for the local loop (FTTC, FTTH, ngDLC) for a large telecom company based in NJ (give you two guesses who) and based on that experience I firmly believe that these systems are cost prohibitive for most applications (some new builds and dense urban rehab may be exceptions). LECs should make the most of their existing plant by offering moderate speed DSL services and if those are successful then they can spend the profits on upgrading to full ADSL or VDSL. Perhaps competition from COVD, RTHM and Northpoint will be the catalyst to force the LEC's hand in this direction Bill