100.0% Average 54.0% 12.4% 33.6% 100.0% Advances and Opportunities in Next-Generation SONET Table 1-6 Transmission % Spur Percentage Spur Cost Compared to Two 10-Mbps customers in a building $1,813 $1,500 82.8% Total Transmission on the backbone ring Cost-Metro Four 10-Mbps customers in a building $1,813 $1,500 82.8% Applications on the backbone ring Two 100-Mbps customers in a building $1,917 $1,500 78.3% on the backbone ring Four 100-Mbps customers in a building $2,333 $1,500 64.3% on the backbone ring One 1,000-Mbps customer in a building $4,000 $1,500 37.5% on the backbone ring Two 1,000-Mbps customers in a building $6,500 $1,500 23.1% on the backbone ring percent (two 10-Mbps customers in a building on the backbone ring). Notice that transmission costs are as low as 21.2 percent (four 10-Mbps customers in a building on the backbone ring) and as high as 45.5 percent (one 1,000 Mbps customer in a building on the backbone ring). Finally, a couple of words are necessary about the recent watershed events in the telecommunications and data communications industry that have seen dozens of large companies go out of business and many others undergo major stock market reevaluations. Rather than undertaking a root- cause analysis, which is both very doable and telling, we focus on a hypo- thetical company with (very simplified) parameters, as shown in Table 1-7. First, note some generic trends in the revenue. The initial growth is high, but it later levels to the industry average of, say, 30 percent, year over year. In year 6, this company would have a 1 percent market share of the total local telecom/datacom business, which we see at about $85 billion in 2006. A 1 to 3 percent market share is a reasonable number, and it would be extremely difficult and noncredible to postulate a higher penetration rate. Next, note that there are some typical operations expenses (which, for this example, is assumed to include all SGA, operations, equipment leases, and transmission costs/leases). EBITDA is simplified to equate to the gr