DAN MOFFAT, NEW EDGE NETWORKS

Our strategy from the beginning was to focus on users in the non-metro, and that's still what we do. We have some unique expertise, and we're highly focused on business broadband. As long as you're focused on that sweet spot, it's a good growth curve to ride.

You can talk about the economy, the war, terrorism and the telecom industry, but business communications is essential. It's hard now to find businesses that don't need broadband. My favorite customer is Stan's Astronomy Shop. They send large star map files. Who woulda thunk it?

The thing we didn't forecast was that the whole industry would be capital-constrained because of the economic downturn. We did take some aggressive steps in 2000 when we cut our footprint and our staff. Since then, we've been on a 600-node frame relay and DSL network and 300-people plan. Now we're going cash flow-positive and we're very confident about where we are.

There are structural issues with the overall industry. The RBOCs have focused on doing business a particular way, for a particular set of customers in a particular environment. Their core business is suffering, and that's the big revenue engine that drives their capital investment. They're going to have to refashion their businesses. The hardest thing to do is to change a business that's been optimized to do certain things well. Companies don't change unless they absolutely have to.

The bubble bursting and regulatory policies have slowed innovation considerably. If you're a technology supplier, who are you going to sell to right now? You sell to the RBOCs, and the companies able to sell to the RBOCs are few and far between. A whole set of CLECs that would try new things — and had access to money — are gone. So incumbents are less inclined to try new things. There's a slew of equipment companies and innovative technology companies that have gone down the tank.

If you're looking for technological innovation and capital investment, you either have to look to competitors and give people reasons to invest, or you have to have some kind of broad-scale public policy mandate. If people really believe that universal broadband is fundamental to economic growth, then there has to be some type of national economic incentive to deploy. There has to be a universal broadband policy.