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from Gilder Publishing

THE FRIDAY LETTER

e-mailed weekly, for friends and subscribers

| http://www.gilder.com/ |

Issue 26.0/Sepetmber 21, 2001

HEADLINES:

* The Week/ Technologies of Freedom

* Friday Feature/ Telecom Review

* Friday Bonus/ Fear Vs Freedom

* Help Wanted

* Poll Question/ Market Drop?

* Readings

* Conference Calendar

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THE WEEK/ Technologies of Freedom

"We built what became the four bombs; they hijacked them. We supplied the engineers, turbines, and wings; they supplied suicidal fanatics and cardboard cutters. The Capitol was saved, apparently, because our civilians overwhelmed their conscripts in hand-to-hand combat on one of the planes.

"Is it decent to publish a newsletter like this one at a time like this? Decide for yourself. When other markets were closed last week, we invested in the United Way's September 11 Fund and the Red Cross. We are going to continue investing, as well, in the companies that will develop and stock the arsenals of our civilization.

"We believe -- more than ever before -- in the technologies of freedom. When Ithiel de Sola Pool wrote a book by that title in 1983, he focused, as our friend George Gilder does, on the Microcosm and the Telecosm, the expansive new universe of bits, information, networks, and interconnection. Our focus is on the Powercosm, the expansive new universe of highly ordered power. Power and logic, we have argued, depend on each other and advance hand in hand.

"For the past two years we have explored how the growth in Powercosm technologies is being propelled by the convergence of new power technology on the supply side, and the rise of the civilian digital economy on the demand side. Now, military and civilian defense applications will further accelerate both the development of Powercosm technologies and growth in demand for the capabilities that they supply.

"We take no joy in the fact that profits will accrue to companies that supply the high-tech weapons that secure America. But they will. And they should. The terrorists are inflamed by demented zealots. Our soldiers are empowered by high technology and the investors who fund its development and production. For our part, we will continue to do what we can to help advance understanding of the technologies of freedom."

Earlier this week, Peter Huber and Mark Mills released a special, early October edition of the Digital Power Report to subscribers explaining the global reach of Powercosm technologies from the telecom network to advanced manufacturing and military applications. This issue is so timely and important, the authors are making it available to the entire extended Gilder family. Please go to www.digitalpowerreport.com and get a copy of the newest Huber Mills Digital Power Report compliments of Peter and Mark.

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FRIDAY FEATURE/ Telecom Review

"The optical industry's astounding growth rates of last year have gone into reverse. Plants are being shuttered and tens of thousands of jobs have been, or are being, cut. Having been through one of the most dramatic expansions experienced by any part of the technology industry during the boom years, the optical industry is now suffering one of the most severe busts.

"So what has gone wrong? The short answer is a steep decline in orders for optical equipment and fiber from telco and other communications customers. The same ready availability of funds for the equipment suppliers was also tapped by the networks for their ambitious expansion plans of the past two years.

"There were three key areas of expected demand for the bandwidth created - the dotcom sector, big companies' e-commerce initiatives, and consumer interest in bandwidth-hungry applications for entertainment, news and sport. These have either collapsed -- in the case of the dotcoms -- or been slow to develop.

"If the short-term future looks gloomy, however, there may be grounds for optimism in the longer term. One area of potential growth is in metropolitan optical networks. These are designed to ease the bandwidth bottlenecks that prevent users from taking full advantage of the long-haul optical networks, into which billions of dollars of investment have been sunk."

The ever-prolific Financial Times has done it again with a complete Telecom review; covering all the major players, photonics, optics, networks, switches, fiber, and lambdas, lambdas, lambdas everywhere! Check it out now at

http://specials.ft.com/telecoms/

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FRIDAY BONUS/ Fear Vs Freedom

George W. Bush speech: Fear Vs Freedom (Full Text)

Must reading!

http://www.whitehouse.gov/

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GET THE GILDER TECHNOLOGY REPORT

Monthly, From the Heart of the Telecosm

http://www.gildertech.com/

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GET THE DIGITAL POWER REPORT

Electrons Matter

http://www.digitalpowerreport.com/

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GET DYNAMIC SILICON

Linking the Microcosm and the Telecosm

http://www.dynamicsilicon.com/

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GET THE AMERICAN SPECTATOR

Online special--50% off cover price!

http://www.gilder.com/AmSpecSub.asp

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HELP WANTED: Assistant Editor, The American Spectator

The American Spectator is looking for a bright energetic new colleague to join the growing editorial team of America's premier magazine of technology, politics and finance. Miserable pay, long hours, great experience. Location Great Barrington MA. Send resume and cover letter explaining why you want the job to spencer@gilder.com.

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Gilder.com Poll Results September 7 - September 21, 2001

QUESTION: Which company will command the global PC market?

RESULTS:

Gateway - 5%

Dell - 50.00%

HP/Compaq - 19%

IBM - 15%

Other - 11%

Up Next: The markets have declined sharply this week because of

* recent events

* real economic problems not related ?

Weigh in now at http://www.gilder.com/

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READINGS

Conexant Eyes IBM

http://www.siliconstrategies.com/story/OEG20010920S0053

Nextwave Settlement?

http://www.nytimes.com/2001/09/21/technology/21SPEC.html

(Registration Required)

Passport, HailStorm have e-biz ambitions

http://investor.cnet.com/investor/news/newsitem/0-9900-1028-7231441-0.html

AT&T to Consider Cable-TV Offers of AOL, Disney

http://www.thestandard.com/article/0,1902,29027,00.html?nl=mg

Palm fans duke it out

http://news.cnet.com/news/0-1006-200-7231151.html

The Wages of War

http://www.economist.com/finance/displayStory.cfm?Story_ID=788296

Billions Will Be Spent on Replacing Technology

http://www.nytimes.com/2001/09/20/nyregion/20COMP.html

(Registration required.)

FBI Pursues Digital Clues

http://www0.mercurycenter.com/local/center/internet0920.htm

Paperless Terrorists

http://www.wired.com/news/politics/0,1283,46991,00.html

The Terrorists Are Winning the Cyber War

http://www.latimes.com/technology/la-000075202sep19.story

Scary Hybrid Internet Worm Loose

http://www.wired.com/news/technology/0,1282,46944,00.html

Feds, Industry Contemplated Nimda Curfew

http://www.newsbytes.com/news/01/170245.html

Journalism's Surreal Reality Check

http://www.washingtonpost.com/wp-dyn/articles/A40404-2001Sep16.html

Move over, dot-coms -- biotech firms shopping for office space

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/09/17/BU58302.DTL&type=business

Microsft Antitrust Slowdown

http://seattletimes.nwsource.com/html/businesstechnology/134344325_microsoft21.html

Yo quiero... Jeff Bezos

http://www.thestandard.com/article/0,1902,29032,00.html?nl=mg

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GILDER CONFERENCE CALENDAR

The conference scheduled for October 18 -19, 2001, in Sarasota, FL, has been postponed. Please watch www.gilder.com for details on when it will be re-scheduled.

Steve Forbes and George Gilder regret to announce that in view of the national emergency, the Telecosm 2001 Conference, scheduled for September 12-14th, has been postponed and will be rescheduled. Our prayers are with the victims of the attacks, their families, and our nation.

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FRIDAY LETTER STAFF

~~~~~~~~~~~~~~~~~~~~~~~

Dave Dortman (ddortman@gilder.com)

John Hammill (jhammill@gilder.com)

E-Mail Wizard Bob Sauve (rsauve@gilder.com)

CONTRIBUTORS THIS WEEK: Mark Mills, Peter Huber, Lauryn Franzoni, John Hammill, Aaron Charlwood, Dave Dortman, Bob Sauve, Spencer Reiss, Sandy Fleischmann

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