Most telephone networks today are fiber, capable of high-capacity, high-speed transportation of data. However, the portion of the network that ultimately connects to the customer premises, commonly referred to as the "local loop" or "last mile," is predominately narrow-band copper wire with service speeds limited to 56-128 Kbps. Traditionally, to overcome these data limitations, significant upgrades had to be made to the networks with xDSL or other technologies. In addition to cost, the higher-speed Internet access alternatives offered by our competitors have limitations. Unlike our competitors, VectorLink offers:

• T1 service, at 1.544 Mbps, it is a fast but relatively expensive solution. It is typically available at approximately $500 to $1,000 per month in some of our markets, plus installation and equipment costs of approximately $1,000.

• DSL service is delivered across the incumbent local exchange carrier's (ILEC) existing copper wire system. While this service is capable of delivering very high speeds, DSL suffers performance limitations based on the distance from the customer premises to the serving central office of the ILEC. Distances are limited to about four to five miles from a central office for the lowest speed solutions and 10,000 feet or less for the fastest. Additionally, much of the plant is physically incapable of providing broadband service. Carriers looking to purchase DSL wholesale must rely on their direct competitors, the incumbent telephone companies, who as a group have aggressively demonstrated a tenacity to thwart competition within their serving areas, affecting the level of service a customer receives.

• High-speed cable networks may be capable of high-speed data transmission. However, we estimate that cable networks will pass only 70% of the residences and 40% of businesses in our markets. Moreover, cable is a shared medium and the more subscribers loaded on the network, the slower the per-subscriber speed becomes. Further complicating their use as a competitive alternative is the fact that these networks currently operate as closed monopolies which do not allow access to service providers. There are also significant security issues with the addressing schemes employed on most cable platforms.

• Other high-speed wireless providers, such as those using 24 GHz, 28 GHz and 38 GHz spectrum, have concentrated on the more densely populated urban areas because of transmission distance limitations. Signals using these radio frequencies are generally limited to a one to three-mile radius, or three to 28 square miles, which makes application in less densely populated areas less economical. These frequencies are inherently more susceptible to weather and environmental interference.

• Satellite networks, such as direct broadcast satellite, currently offer only one-way Internet access, with upstream access limited to existing copper telephone lines. Other alternatives like Low Earth Orbit (LEO) Satellite Systems are not scheduled to be completed for years and have not proven capable of providing "carrier-class" voice or data services. These networks also have not indicated their willingness to provide wholesale access to other service providers.

to top