The Rise and Fall of Telecoms

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The Rise and Fall of Telecoms

• Thomas W. Hazlett
• American Enterprise Institute (thazlett_at_aei.org)
• Phoenix Center for Advanced Legal and Economic
  Public Policy Studies
• July 11, 2001

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AEI Broadband Debate July 12

• Harold Furtchgott-Roth
• James Glassman
• Thomas Hazlett
• 10-12 am _at_ AEI, 1150 17th St., NW
• 202-862-5800
• Ticketron/WWF pay-per-view

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Part e-Time on Wall Street

• 1995-1999 Extraordinary returns
• SP500 26 annualized
• Nasdaq 40 annualized
• Windows 95
• Last victorious campaign of the PC revolution
• The Browser Jihad
• A mass market for e-commerce
• The IPO gold rush

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The Third Wave

• Broadband
• The consensus next big thing
• Communications takes off late
• Nasdaq peak March 10, 2000
• Summer rally in fiber optics

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Rise and Fall

• Infrastructure investments chased software and
  Internet in the race to stake claims
• Waves of creative destruction are inherently
  unstable
• Low cost capital evaporates
• Regulation to reduce capital requirements makes
  process more volatile