DirecTV Group Inc.

DirecTV is a company built on a dream of television programming delivered via satellite. In some important respects, DirecTV has clearly fulfilled that vision, providing more channels of high-definition programming than the land-based competition. On the other hand, technological innovation in the field of fiber optics has enabled cable companies to offer effectively comparable service without the enormous upfront costs associated with launching satellites. At the same time, aeronautic innovations have not keep pace and the price of launching additional satellites remain high.

While DirecTV is effectively protected from competition by other satellite operators by these high fixed costs, the company still faces substantial competition. This is unfortunate, because the satellite distribution model works best when it is used the most. Cable companies don't have this same increasing return on their working capital, but they have prevented satellite television from reaching the critical mass it needs to dominate distribution.

Ultimately, most consumers are probably much worse off with significantly higher cable bills than they would if satellite television had been adopted by more people sooner. But that doesn't mean that DirecTV is going to be a good investment now or in the future.

JDS Uniphase

JDS Uniphase is perhaps most useful to current investors as an object lesson in what happens when a bubble gets wildly out of control. JDSU, as the company likes to refer to itself, lost more than $45 billion in market value in 2001 when the bubble popped. For a company that today has revenues of approximately $1.2 billion, JDS Uniphase represents the worst of the tech bubble.

Today, JDS Uniphase still retains technological leadership in a number of fiber optic research areas critical to the accepted future of telephone and Internet services. While Jim Cramer's recommendation could as easily be read as a red flag as a positive, JDSU is definitely going to benefit from a very real build-out of the nation's fiber optic infrastructure.

JDS Uniphase's best days are well behind it, but so are its worst. The stock is likely to see significant upside over the next decade, but its technology is ultimately going to be relegated to commodity status much like the computer hard drive manufacturers. Numerous telecom stocks are going to out-perform in the near term and the long-term is likely to be dominated by software companies. Hardware manufacturers have enormous fixed costs that simply have no parallel in the software business.

Corning Inc.

Corning has come a long way from its historical roots in the glass business. The secret has been a revolutionary sustained focus on research and development. The company's immensely profitable fiber optic cable business had its roots in research the company conducted in 1970. Despite the collapse of fiber optic cabling after the Dot Bomb, the company's attention to research yielded technologies that have made Corning the world's pre-eminent manufacturer of glass for liquid crystal displays.

Now that the dust has finally settled after the last great technology bust up, the next great infrastructure build out is finally getting under way. With the advent of new mass-market technologies that really use up the bandwidth, Corning is poised to see renewed growth.

Even if Corning's technology business were to evaporate, the corporation's legacy glassware division also has substantial value.

Corning is ready to take advantage of the growth of Internet 2.0, but not completely dependent on any specific technology taking off. Wireless Internet access is a long-term threat, but ultimately the inherent insecurity of anything other than a physical cable used to transmit communications ensures Corning's eventual profit. Stock symbol GLW is worthy of the allocation of fresh money. Even investors already holding the stock should consider increasing their investment.