Investors are starting to emerge, badly shaken and stripped of much wealth from the over-hyped and over-optimistic dotcom era, who have now replicated those expensive mistakes in pursuit of broadband.
There are striking similarities in the alarming rate at which millions of pounds are just disappearing before our very eyes. Investors are finding it just as difficult to identify broadband services companies with a major chance of surviving at all. These opportunities are not for those seeking a safe little flutter; this is strictly for the high-rollers.
We only have to look back a few years to when the high availability of cheap capital coupled with many untried and untested beliefs that corporations and consumers would flood to the Net to trade did not happen.
The high availability of capital and untested premises are starting to do the same for the broadband debate. We are constantly being reminded that interactive applications will drive the need for - yes you guessed it - corporations' and consumers' demand for shed-loads of bandwidth. Traditional and start-up telecoms outfits have laid more than 100 million miles of optical fibre to meet this "demand".
There is now the most startling overcapacity, especially in the long-distance marketplace, which in turn is delivering low prices. These low prices are preventing start-ups from paying off debt incurred in building these wildly expensive infrastructures.
While prices are dropping as much as 50% annually in some areas, this is a true killer application, but it is killing off these brave new start-ups!
I cannot see demand rising for at least another two or three years. Just like other industries with massive overcapacity, this means lay-offs, consolidation and failures on a huge scale. Just look at the aviation industry at the moment. A number of major European players must and will go to the wall in order to re-balance this over-supply.
This is still better than the situation in the US. Some major US cities have up to six broadband companies competing for the relatively small amount of business currently available.
The mania for buying broadband firms' shares in the initial public offering started earlier in the US, therefore the once huge cash reserves are now becoming precarious. In a recent trip to the US I observed broadband companies filing for Chapter 11 assistance at an horrendous rate. More than 30 have filed for bankruptcy and the number is still rising.
It is hard to see many of these businesses rising phoenix-like from the broadband ashes. To add insult to poverty, there is little or no market for their hardware.
Any of these companies that have been fleet enough of foot to manage a distress sale or, to put it bluntly, a mercy killing, are being picked up for peanuts. When Viatel (a pan-European player) filed for bankruptcy earlier this year it tried to sell off its assets. No worthwhile bids were forthcoming and the auction was called off.
This sounds a real gloom-and-doom outlook, but there is some hope. The interactive applications will come, at some stage, but this is a seriously expensive waiting game.
My bet will be on those broadband players with large, robust and well-funded parents who can hold their nerve. The likes of Thus and KPNQwest spring to mind. Of the rest, Colt and Energis, which started out in the early 1990s, are still going and have the credibility and relative longevity to continue to be able to raise the necessary financing.
These are large bets, and the economic conditions are still too turbulent for any guarantees.
We must all remember the business fundamentals, if there is no sustainable difference between cost and price, you do not have a viable business.
Having written this a few weeks ago now, I have just been musing at the recent problems at Global Crossing, WorldCom and Energis. The telecoms bubble is bursting. Block your ears, it will be a louder bang than the dotcom burst.
Rene Carayol is chief executive of the Voodoo Group