Adam

BigBand Network: No Big Deal

While it amazes me that BBND is doing so poorly in a market that is both growing and dynamic, my posting is more focused around your comment regarding executives selling alongside the public offering. It is not uncommon for founders in private transactions to benefit from the sale of the company when it occurs while the employees wait for some period to expire. The logic is that when the liquidity event occurs, the founders have completed the task set for them by their initial investors and therefore its appropriate that the founders get paid. When you consider the many years effort and dedication it took the founding team at BBND to get to where they are today, and the financial sacrifices startup executives make compared to operating company executives, I believe it is very reasonable to allow founders to sell alongside the public offering. They are simply being paid for their historical effort. (think of it as backpay)

In terms of the IPO, investors invested in both the market and the company, BBND. The market opportunity should be the primary focus of the investor followed by BBND's ability to successfully grown their share of that market. As such, investing because of a single quarter that BBND stated was "outstanding" is based on incomplete analysis and seems unwise. Of course, the current stock price is representative of the management teams ability to compete in their market, and the market measures this performance in a very dispassionate way.

Adam

3Com Corporation: Forget Cisco, Think Open Source

Joe,

While I agree that the way to challenge the established incumbents is using Open Source (I am the founder of an Open Source Software Company) I question how this can work for 3Com. The business model for Open Source depends upon ongoing service/support fees. While 3Com can probably make some margin by bundling Open Source Software with hardware, these margins will be very small. 3Com delivers their product to market via distributor and resellers. The resellers are the recipients of the support fee's not 3Com. In fact, in the Open Source example you propose, 3Com is only providing a convenience by pre-loading Open Source onto a hardware platform, something that one of their partners can also do.

In fact, last reported quarter 3Com's service business was $9M on revenue of $319M

Open Source, Im not sure how 3Com can get there from here?

Adam

Facebook Should Take the Money This Time

I agree with Mark. Its not clear to me that the current state of social networking is a sustainable business or just a fad. Will Facebook be around in 3 years? Will it be hot or no longer cool.

Take the money.

Adam

AT&T Lightspeed: The Price of Mediocrity Just Went Up

On the current access platform, this project so critical to AT&T's success is doomed. A few statistics. The average household has ~2.3 set-top-boxes. Although most average compressed HD demands at 10M, thats what it is, average. An actual HD stream ranges between 8-15M. 8M Internet is table stakes. No matter how look at it, it doesnt fit in 34M. So whats the answer, more copper pairs, hardly.

Perhaps selling AT&T Broadband to Comcast was a mistake! HFC and FTTH are the only viable solutions.

Is Investing in Research in Motion a Bet Against the Internet?

Agree with the thesis, however cellphones dont enjoy the ubiquity or flexability of presentation that Computers do. Continued technology growth depends upon presenting the customer with increasing simplicy while the underlying networks, systems and applications grow increasingly complex. Im not a RIM user but I dont see their type of service going away quickly.

Adam

Memo To Cablecos: Fixed Line Is Dead

I cant help explain the sentiments of the street however I can explain voice in Cable. Offering phone service has been effective in competing with the DSL/Voice & Satellite combination. Although alone it doenst represent significant revenue, it has protected the more valuable services. Operators I know have seen their overall subscriber penetration grow by simply adding voice. It also prepared cable operators to compete with VZ and ATT. Lets see how they go with Mobile from the Sprint. Competition between Cable and Telco is precariously balanced, very modest success by Cable operators could tip the scale.

Cable's Analog Ghetto: Why Broadlogic's Solution Is Unlikely To Work

Andrew,

Good points and agree but feel the need to "pile on". The digital part of "going digital" can be achieved with an ATSC tuner, something that Im sure those with HD tuner enabled TV's have seen, represented as the channels with dotted subchannels (5.2 for example). But the real issue is the price? Approx 60% of cable subscribers are analog without a Set Top Box. No operator is going to spend $240 per subscriber to solve this problem. Comcast has been vocal for years that the solution is a $75 STB. Take a look at the STB's from Pace Microelectronics, these guys are on the right track with low cost digital STB's getting close to the Comcast price. So unless we are missing something, why anyone would fund the type of development? Im willing to bet that Broadlogic far overshoot their projected price. Why the WSJ would consider this news worthy, heaven only knows.

Adam

Fiber to the Home: A World of Headaches for Comcast

Micheal, you are another one of these people that lacks the basic knowledge of how cable systems work, why your getting the speed you are getting from you cable modem and how a cablesystem is mostly already a fiber system.

Equating the speed that you experience from a Cable Modem service in a metro peek hour is the same as saying a Ferrari is slow because its on the FDR at 5pm.

What cable companies have been very unsuccessful in doing is explaining to investors how their technology works and its strengths and weaknesses. In fact, the Cable business is an extremely insulated group thats further complicated by their regional structure of limited competition.

While you should do what your analsys leads you to, I wouldnt go as far as being short and wouldnt buy stock in the equipment vendors that supposedly are going to benefit from your predicted build.

Frankly, I dont think you could be more incorrect. Ultimately all capacity gets consumed (processors, harddisks and networks) but there is much more avaiable capacity than you are aware of, combined with subscriber usage behaviours that would shock anyone. The only people who have to build FTTH are the DSL guys, they dont have a choice and the numbers are not going to work.

Good luck with your pick, your going to need it

Adam

Cablecos Wake Up To Reality

Andrew,

In general your assertions are correct however I dont agree with your conclusions. Theoritically it is possible to delivery GB of data capacity over the coax system providing sufficent capacity for many years to come. There is no specific limit (high or low) to the number of modems that can be on a channel or the number of channels that can be used to deliver DOCSIS services. The issue that you did correctly identify is that the spectrum that would be used for this additional capacity is currently consumed by video services. It is correct that analog "must carry" consumes signficant spectrum however the spectrum "crunch" was really caused by Digital Simulcast. This is the re-transmission of the analog channels as digital on the same system and was implemented to compete with Satellites picture quality. These digital channels are the candidates for switched broadcast and as they are already use settop boxes, no premise equipment changes are necessary. Freed channels can be used for data services. This can all be done with today's network.

A big rebuild is a long way off for the cable operators, they will continue to improve their existing spectrum usage allowing them to offer competitive services for quite some time.

Adam

Is CSG Systems Hiding Something Before Earnings Come Out Next Week? (CSGS)

Sleepy old CSG is facing increased competition from AMDOCS who want into the Cable business. These guys are going to see increased pressure around their billing processing cash cow.

Adam

Prediction on Alcatel: Under $10 Within 3 Months (ALA)

Andy, agree with the $10 prediction, but this is a tough one to figure out in the long term. Its easy to claim the headcount/finanical synergies, but Im not sure that the IPR/product/business practices will mesh quickly and this will be a long slow merger resulting in lack luster performance of this company for many years to come.

Frankly, I still wonder why Alcatel did this!

Adam