Subject: [NEXTEL-1] Dial-Up Internet Modems Dead By 2007?....We Think Not

From: [email-masked]
Date: Wed, 20 Aug 2003 01:19:39 -0400

Dial-Up Internet Modems Dead By 2007?....We Think Not

Aug 11, 2003

Dial-up modem access to the Internet will be virtually non-existent by the end of
2007, according to market analysis firm Information Gatekeepers Inc.

The company bases that prediction on a number of factors, including a highly
suspect Request for Proposal (RFP) from three Baby Bells.

If, however, the three Bell companies - Verizon, BellSouth and SBC
Communications - fail to make good on their "promise" to deploy
fiber-to-the-home (FTTH), and/or the Bells fail to price high-speed services
somewhat comparable to dial-up service, TPR sees dial-up sticking around for a
very long time.

Details of the Bells' RFP are being closely guarded. Fiber companies and
equipment vendors that were given the document had to agree not to make it
public. Even so, bits and pieces of the document's contents are in fact beginning
to leak. The Bells contend that some of the information contained in the RFP is
highly proprietary. Nevertheless, industry sources who have seen it tell TPR that
the Bells appear to be looking for the least expensive solution, one that could
entail use of relatively inexpensive soft switches and some sort of hybrid
copper/fiber application.

Moreover, the Bells' RFP is "sufficiently vague" as to make it seem suspicious,
one source said. "I'm still not sure these guys [the three Bell companies] are
serious," the source told TPR.

"They act as if they want to get this [deployment] underway next year. But then
they turn around and say things that make me believe they're not going to be
ready for robust deployment until 2005 or later. Even then, I think what we'll see
- if we see anything at all - is new-build deployment only. I don't think they're going
to be doing massive upgrades of existing infrastructure."

If that turns out to be the case and the Bell companies stick to a "new-build
only" deployment plan, the rollout of their enhanced high-speed networks will not be
sufficient enough to pose an immediate threat to cable modem access, much less
dial-up service, the source said.

The Bells will need to at least approach the cable industry's 90 percent
residential "pass-by" rate in order to mount a serious competitive challenge to cable
industry's grip on the broadband market. They will also need to obtain access to
content - movies, games, news, etc. - comparable to that offered by cable
providers in order to be perceived as a viable alternative to cable service.

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