Now to my overhyped telecom technologies: For starters, try VoIP and WiMax.
Exhibit A is red herring prospectus for a company called Fusion Telecommunications International. A small broker called Kirlin Securities is trying to raise $20 million or so for a company that has lost around $50 million in the past four years and is still losing money. It's been in long distance. But now it's morphing into bring a VoIP long distance provider, since that moniker will help it sell shares to an unsuspecting public. Don't fall for it.

Exhibit B is an article in the latest Economist called "Wireless Internet -- World domination postponed. The prospects for WiMax technology have been hugely overhyped. To hear some of its more enthusiastic proponents you might conclude that WiMax, an emerging wireless-broadband technology, was about to take over the world. WiMax is akin to a long-range version of the popular Wi-Fi technology that allows computers close to a small base-station to surf the Internet without wires. Whereas Wi-Fi's range is limited to a few tens of meters, WiMax can, in theory, work over tens of kilometres, allowing huge areas to be blanketed with wireless coverage. Hence the claims that WiMax will bring Internet access to the 5 billion people who currently lack it, or that it will render expensive “third-generation” (3G) mobile networks redundant.

The reality, however, is that WiMax has been hugely overhyped. Despite claims by several firms that they are offering WiMax technology today, the actual number of WiMax devices on the market is precisely zero. That is because the WiMax Forum, a standards body that oversees the technology and ensures that gear from different vendors works together, has yet to certify any devices with the WiMax label.

On January 24th it announced that pre-certification testing will begin in July, which means that the first WiMax devices will be available only at the end of the year, six months later than expected. So far, equipment-makers can offer only “pre-WiMax” or “WiMax-ready” equipment which will, they promise, be compatible with WiMax devices when they appear.

The hype is now giving way to much skepticism about the technology's prospects. “I don't think it's completely hot air, but it won't live up to its early promise,” says Jagdish Rebello of iSuppli, a market-research firm. WiMax, he says, will chiefly be used by telecoms firms in rural areas, to plug holes in their broadband coverage.

In urban areas WiMax does not make sense, since it will be uneconomic compared with cable and DSL, argues Kenneth Furer, an analyst at IDC. “It's not going into New York, Los Angeles or London,” he says. It is also too expensive for use in the developing world, at least for the time being, since early WiMax access devices (which must be fixed to the outside of a building) will cost around $500; other forms of wireless link, such as mobile-phone networks, will remain a cheaper way to connect up remote villages.

Fervent believers in WiMax, chief among them Intel, the world's largest chipmaker, believe the technology will take off when it can be incorporated into mobile, rather than just fixed, devices. The next version of the WiMax standard, which has yet to be finalized, will support mobile access, provided the technology can be made small and energy-efficient enough to fit into laptops and handheld devices. Alan Murphy, a WiMax specialist at Intel, is optimistic that WiMax chips for laptops will be available in late 2006 and that they will consume only 10% more power than today's Wi-Fi chips.

Intel regards WiMax as a promising source of future growth. Intel chips power a majority of the world's PCs, and the company dreams of establishing a similar franchise in mobile devices, a far larger market. Equipment-makers, for their part, are counting on Intel to deliver: WiMax will become widespread only if the price of access devices falls, which in turn depends on the availability of cheap, mass-produced WiMax chips. But Intel has a poor track record in shipping wireless chips on time. ..."

And now to another telecom disaster, Brocade Communications. This lovely telecom equipment maker has just announced that it's restating its results for the last six fiscal years and its latest annual report won't be filed on time with the SEC. What's really screwed up the company's accounting is a the vast number of stock options it's issued as rewards to its management and its employees for superlative work. And for what? Great stock performance?

Off to Phoenix this weekend:
If you're in Phoenix this weekend, please come to the Arizona Real Estate Investors Association annual conference at the Phoenix Civic Plaza. www.Azreia.org. I'm speaking at 8:30 AM on Saturday. If you whisper the magic words, "guest of Personal Real Estate Investor Magazine," you get in for free. The theme of the conference is "Real Estate Investing -- Making it work for you."

There are two things I like about Arizona real estate. First, It's booming because of genuine population growth. Second, they're moving real estate from a transactional to a relational model, meaning that some vendors are beginning to see their customers as long-term -- not just deal by deal. Some companies are even emerging to manage a real estate investor's entire portfolio. We write about this trend in the next issue of the magazine. I find the trend fascinating.

Flying off to Phoenix:
I'm flying JetBlue to Phoenix. $220 round-trip from New York. Good deal. Good for me consumer, but not good for me, investor. Fortunately I sold all my JetBlue shares after it fell 15% from the high it reached after I bought it. Fuel prices have been hurting JetBlue, viz.:


World's best airline announcements
I haven't been on a plane for a while (a small mercy). Which brought me to the world's worst (i.e. best) airline announcements:

+ "Weather at our destination is 50 degrees with some broken clouds, but we'll try to have them fixed before we arrive. Thank you, and
remember, nobody loves you, or your money, more than Southwest Airlines.

+ "Your seat cushions can be used for flotation, and, in the event of an emergency water landing, please paddle to shore and take them with you with our compliments."

+ "As you exit the plane, make sure to gather all of your belongings. Anything left behind will be distributed evenly among the flight attendants. Please do not leave children or spouses."

+ And from the pilot during his welcome message: "Delta airlines is pleased to have some of the best flight attendants in the industry. Unfortunately, none of them are on this flight!"

+ Overheard on an American Airlines flight into Amarillo, Texas, on a particularly windy and bumpy day: During the final approach, the Captain was really having to fight it. After an extremely hard landing, the Flight Attendant said, "Ladies and Gentlemen, welcome to Amarillo. Please remain in your seats with your seat belts fastened while the Captain taxis what's left of our airplane to the gate.

An excellent reason to winter in Minnesota, or better, to visit me in Phoenix this weekend. Neat photo.

Great News:
My wife returns today from three weeks in Australia. She flew Korean Airlines. Susan's advice: Don't -- unless you love spicy pickled cabbage for breakfast, lunch and dinner.

Harry Newton

This column is about my personal search for the perfect investment. I don't give investment advice. For that you have to be registered with regulatory authorities, which I am not. I am a reporter and an investor. I make my daily column -- Monday through Friday -- freely available for three reasons: Writing is good for sorting things out in my brain. Second, the column is research for a book I'm writing called "In Search of the Perfect Investment." Third, I encourage my readers to send me their ideas, concerns and experiences. That way we can all learn together. My email address is . You can't click on my email address. You have to re-type it . This protects me from software scanning the Internet for email addresses to spam. I have no role in choosing the Google ads. Thus I cannot endorse any, though some look mighty interesting. If you click on a link, Google may send me money. That money will help pay Claire's law school tuition. Read more about Google AdSense, click here and here.
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