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Hi Paul,

thanx for the response. Your posts always help me too see things in new ways & to trigger many new associations & connections. Let me see if I can bang out a few ideas your rejoinder & Suria's article gave me cause to think about at work today.

1) Do you think Suria goes too far in suggesting that NGN bandwidth wholesalers like Williams & XO may be in imminent danger of restructuring in the next few quarters. Certainly I think some of these models are "bankrupt" & we can see the writing on the wall; I just hadn't previously lumped Williams into that category of clear & present vulnerability. If that DOES happen in the next few quarters, SCMR takes a big hit, & undoubtedly others in the sector.

We could see a delayed reaction repeat of how the share price of AT & T & Worldcom suffered in '00; that should have been a foreshadowing of things to come for me, & the internal klaxons should have gone off for me :^).

2) On weak links in the NGN deployment model. Some aspects of the NGN FIRESTORM(like those conflagarations in Dresden & Tokyo, a fire which gets so hot that it sucks massive amounts of oxygen into the center of the FIRESTORM, rapidly adding fuel to the fire, stoking & whipping it up to increasingly greater magnitude & intensity, in turm sucking ever more oxygen ever more quickly; repeat steps 1 & 2) were a result of "externalities"(shifts in market & VC sentiment), the exact timing of which might have gone otherwise.

Other aspects seem to have been internally inflicted, & maybe should have been more predictable, in hindsight. One area of upgraded & enhanced services that was SUPPOSED to drive increased revenues, & help subsidize the massively leveraged & top heavy NGN buildout financing, was the widescale deployment of DSL & cable modem infrastructure. Talk about broken models.

There is a lot I don't know about this. But it seems that at the present time, there are serious flaws in the assumptions about the rapid deployment & uptake of such enhanced services. One is a dearth of adequate technical support to facilitate speedy uptake & acceptance. But the problems seem to go deeper than this.

Even IF telcos & carriers & ISPs had adequate & sufficient staffing & tech/installation support, finding out if you are in a DSL-friendly node in the network can require multiple, costly truck rolls just to detect whether that local stretch of copper wires is too antiquated & damaged to even support DSL augmentation. In some instances, it just costs more roll out these services than the providers can realistically recoup in a reasonable time frame.
And of course some potential users are exempted if they are more than 3,000(?) feet away from a station, & cable modem aren't even offered in some areas either(like mine :^), & I live in one of the most densely populated cities on the planet- Los Angeles; we are not talking about remote parts of Wyoming or rural West Virginia, here :^). Clearly something has to budge here. A snap in, self-installed, plug 'n play BRCM DSl modem would be handy here.

The usual process whereby the early users pay more & pay often to pave the way for more institutionalized & efficiency of scale savings for the later, more cautious adoptees, has not gone smoothly, & seemingly a transition needs to be made in the extant methodology BEFORE such an event transpires. The current situation reminds me very much of an inexperienced free climber who is stuck in a really gnarly & treacherous passage on the rock face. The way above is blocked & unscalable, but the way below is dangerous too, & the very act of stooping down to regroup can cause a catastrophic loss of balance & plummet to the bottom.

Many think wireless ultimately will prevail for the widescale, COST EFFECTIVE deployment model. On the commercial, industrial use side, Winstar & Teligent are not exempt from problems either, & are also having some serious financing issues as a result. For the retail user, Qualcomm's HDR is very promising, but here too, we have mixed adoption & disagreement on standards between the latest iteration of CDMA & those of competing, Nokia/Ericson-spearheaded standards by the Euros & Asian telcos. And more money is needed here as well(massive amounts in Suria's opinion; in fact, this was the straw that broke the camel's back). So we are back to square one.

By the way Paul, do you seperate out how you define the creation of new services & killer apps to drive revenue growth towards the end of a SUSTAINABLE MODEL, from the observations I am bringing up, which are really more about infrastructure deployment? I am just curious, because it seems to me that UNTIL we have a somewhat more widespread deployment of high bandwidth connections, people won't even be equipped to receive those hypothetical NGN services!! And what will some of these services & killer apps be that will putatively drive adoption, urgency & wide-scale, trickle down deployment? Streaming video, remote education, tele-commuting???

Yet it is hard to see how we can get from here to there, for the reasons I have outlined above(& probably many others I have ommitted- my list was not intended to be a comprehensive & encyclopedic, just suggestive & representative of the intrinsic problems that must be coped with). This process of rapid & widescale global adoption & deployment does not have such an air of invincilbility & inevitability as it did just a few short months ago.

3) SONET SUMMIT. Gilder has been talking about SONET for several years now. While he may not have been entirely right in his timing, the troubles of LU & NT of late do seem to eloquently attest to the power of core principles of the Gilder paradigm & his extrapolatory prowess.

A key question is to the probable migration path from SONET to more NGN/IP/Packet-Switched/Mesh Topology, some still without five 9's reliability/QoS & BellCore benediction. And with the technology changing so swiftly in this space, it would be nice to get at least quarterly updates from the likes of Dirty Dingus & Tony Li on the current state of SONET entrenchment/obsolescence.

When I first read about how SCMR's vision of how WDM could better LEVERAGE SONET, & did not require the wholesale uprooting of antiquated circuit switches with NGN Forklift upgrades, I thought it was a no brainer. But I think there may have been some subtleties & nuances I was missing here.

If SCMR's vision is correct, than I think that is an important point that is typically overlooked. It does not necessarily have to be a scenario of all SONET or no SONET & all WDM/IP. The crux of my question IS...
is it true that a carrier can, as SCMR states, start with an existing base of already deployed SONET rings & scale said base ad infinitum with future SCMR photonics engines. OR... is it the case where things can only be scaled to a point, & then if a given carrier/telco wants to scale beyond that, they in fact have to hodge podge install, in an ad hoc NGN-kludge fashion, more SONET gear, before further WDM leveraging can be effected?

If the former, SONET would seem to become marginalized fairly rapidly. If the latter, than SONET may be here to stay for a good bit longer than Gilder asserts. Of course, if good solutions emerge quickly as far as making IP networks QoS more robust, this could help usher in the former scenario.

One reason I find these matters of strategic importance is tied into & related to the above points, which you & Bruce & Geoff Moore are well aware of & have brought to our attention. That telcos & carriers need to find a more sustainable model, & path to profitability. Part of this could be top-line driven, if somehow enhanced service catch on & this fuels increased cash flows. But the other, arguably equally or more important part of the equation is bottom line drive. That is to say, reducing costs thru inefficiencies which accrue antiquated equipment & topologies(see: SONET reserves half the potential bandwidth, making it inaccessible, just to guard against the possibillity that some Dufus might sever your local NGN carriers international, transcontinental optical fibre link with a backhoe, etc. :^).

I don't want to push this point too far, because that sounds suspiciously like the rationale that landed us in this current mess in the first place- spend more now so you can save more(& grow thru an expanded & differentiated suite of services, commercial & retail) :^). Yet it is true- it is a sad state of affairs if companies are too poor to save money- a zen koan-like Catch 22/conundrum.

There it is. If the financing terms are too restrictive, NGN buildout & deployment will come in fits & starts. If there is NO money for these things, the SCMR's & AVNX's will have to wait longer for their turn. But I would make the case that at some point things will turn from the dire negativity of thge moment, & some of those telcos & carriers in a position to do so will find a way to NGN toplogies & WDM infrastructure deployment, that will SAVE them so much money, even after backing out the acquisition, install, management & maintenence costs, to make the proposition more compelling on balance than not doing so.

One difference, IMO, between the cycle in which PC's were adopted & bought as each successive iteration of the Wintel duopoly arose(& this was good for the box makers like Dell for a time in the nineties, though some may find them passe now, & saddled with eroding margins), was because it made a big difference between a microprocessor with megahertz in the teens, or say between 100 & 200. But the difference between a 500 & 1,000 is not as easy to sell.

I have a 366 Intel Celeron Gateway box, I would like to get DSL because I consider that the weak link in my communication speed. DSL would be nice, & I think that would suffice perfectly well for my needs, doing tech stock research at FOOL & info-spelunking in the Googlescape. I don't see any compelling urgency to rush out & buy a more powerful box, & I think many others are the same way. Already, I believe we have reached the (saturation?)point in the US where a greater percentage of new computer sales are to... people who already own at least one computer, rather than to new, first time buyers.

Not the case with core routers. To scale the internet, & handle the tsunami of data & coming video traffic, service providers can't just stay with a pat hand or the network will suffer systemic overloading, & become swamped & overwhelmed(some would say it is getting there already, or in a hurry). Hard core problems call for hard core, purpose-built, robust, best-of-breed solutions. This may bode well for NGN commandos like JNPR, SCMR & BRCM in the coming decade/s(please, please, let there be an S/plural decade timeline for these companies :^). And this will have to do for now.

Thanx for stimulating this clarification of my thought. I would look forward to more of this, Paul, if interest dicates.

FOOL ON, ON FOOL DAY(a palindrome- April Fools)

t2/Paul communique 1.0 :^)


look out from below,, & domain names- here comes DOT.DOH!!! :^)
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