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megabits/second of transmission capability, or 5 megabits/second per peak user. Again, this number can be multiplied through segmentation as outlined above.

It is possible to push these numbers significantly further. If very high speed, truly symmetrical capacity is required, frequencies above 1 Ghz can be used. The cut-off frequency of the coaxial cable employed is close to 2 Ghz, allowing for very significant expansion of capacity for high speed symmetrical services.

5. Please project the capital investment you or your industry plan to make on a per home-passed basis to install broadband infrastructure, and on a per subscriber basis to install specific services.

Our experience to date indicates that an investment of between $125 and $135 per home passed is required to upgrade existing coaxial cable television plan to the hybrid fiber/coax architecture referenced earlier.

Assuming a 15 percent penetration rate, we expect the incremental costs per customer moving into telephony to be no more than $1,000 per customer. This investment is largely variable in nature, is made incrementally as telephony customers are added.

It is estimated that PC modem services will cost between $400 and $600 per customer, again, incrementally against only those customers taking the service. This covers the cost of the PC modem, as well as central routers, servers, gateways, and support systems.

It is estimated that interactive multimedia servers will cost between $700 and $800 per incremental subscriber, again accounting for terminal equipment in the home as well as switches, servers, and associated central investments.

6. Please respond to the concerns raised in Vice President Gore's letter (copy of letter attached) regarding the ability of users of your network to original content for delivery to any or all other users, versus the control of all content by the network operator.

The concerns outlined by Vice President Gore are largely addressed in our original paper. We expect to support several different coexisting networks on our broadband transmission system. These range from regulated common carrier-type symmetrical telecommunications services, like telephony, to highly experimental asymmetrical interactive entertainment services. In the middle ground will be a PC network, with great capacity. This network will be as symmetrical as it needs to be, given marketplace demand. As outlined above, we have the ability to expand network capacity in pursuit of the amount of symmetry that makes sense. However, premature installation of capacity and symmetry, in advance of demand, will be prohibitively expensive and, we believe, will not be supported by private investment.

7. Please specifically enumerate the actions which you or your industry believe that the federal government should take to encourage and accelerate the widespread availability of a competitive digital information infrastructure in this country.

We specifically address these points in our paper. To reiterate, they are:

The elimination of historic state and local barriers to competition in telecommunications;

The creation of requirements for interconnection, access, compensation, unbundling, collocation, pole and conduit sharing, and number portability and dialing parity by the incumbent telephony monopoly;

The prevention of interference by local authority in the growth of competing telecommunications services; and

The recognition that to enhance telephone competition, debilitating cable rate regulation must be reformed.

Note

1. All projections (unless noted) are the estimates of the authors and do not represent an official position of the National Cable Television Association or Time Warner Cable.



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