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KPNQwest Files for Bankruptcy
ives writes "Today KPNQwest filed for bankruptcy. KPNQwest owns the most important fibre backbone in Europe. Apparently they are not planning on switching off their network, but without maintenance it will probably slowly degrade. The official press release can be found here."
Does that mean they're spineless?
bah-dum ching!
How are they going to pay for the lines or electricity that their network runs on, to say nothing of maintenance?
Is your browser retarded?
Perhaps some US company that is looking to expand it's presence overseas (Like AOL) might buy the backbone. Just a possiblity
Tibbon
tibbon.com
They should have done the American thing, and just spied on all of their customers, and then sold the personal information to the highest bidder.
There is too much moola to be lost if no one does.
This is weird: I have to read this first on a foreign website! I am Dutch myself...
I have a strong suspicion, that lack of maintenance is not the primary danger that the network would face, but rather the fact that if anyone chooses to own the network up, or do some *experimental routing* that there is nothing that would be done about it!
:D
Hacker paradise!
Is not life a hundred times too short for us to bore ourselves? -Friedrich Wilhelm Nietzsche
I keep hearing about all this unused fiber here in canada.. Wonder how much money is being lost on it.. I don't think any of the companies here will go under, most of the fiber is owned by large divers telacom /cable companies here..
EA David Gardner -"... but the consumers have proven that actually what they want is fun."
They should sell the network on ebay. I bid $1!
graspee
http://www.theregister.co.uk/content/7/25539.html
Any sufficiently advanced man is indistinguishable from God
So is the EU going to let the largest fibre backbone go belly up? Not... So, I'm thinking that the government(s) may end up nationalizing this (is it still called nationalizing if it's a pan-governmental entity?)
We need companies with thick spines to own the internet backbones - we don't want them to break!
The vast majority of ALL IT-related businesses has no substansial income and will follow them sooner or later (when the VC money is used up).
There are a lot of companies out there who seems to have mistaken venture capital money for wellfare.
I do not think that the Dutch government is going to take it over. The company has a dept that is extremely large. The gorvernment shouldn't intervene; we live in a democracy we do not have a communist party.
ooops.... we went bust... sorry about your bandwidth.....
Now if only they would take Qwest with them!
Hexayurt - open source refugee shelter,
Is this in any way related to the evil phone company (errr... monopoly) here in America that is called Qwest?
I thought digging down fiber for huge amount of money and wire it to every damn house and then almost not charge for it's use was good business!
Gosh, are there lots of clueless people in this tech-industry or what.
Wake up people, there are no "new economy", just the old one. If you have greater expenses than income you _will_ go out of business.
in one last burst they should have the worlds largest lan party on it. largest as in it would be physically the size of the fibre network. if only for records sake.
I want 2D games back.
I wonder when microsoft is going to jump in and "save the day" :-/
There's an in-depth article available in English from the German Heise.de newsticker. Read it here.
There's also a brief article on The Register available here.
Just thought I'd add a few tidbits since the news post doesn't actually link to any objective press coverage, company press releases are usually not the best way to inform oneself.
Switch back to Slashdot's D1 system.
Their flash programs test your bandwith while playine some euro-tech. I get 200k.
According to this report, AT&T is looking at them..
http://www.cnn.com/2002/BUSINESS/05/31/kpnqwest/in dex.html
Perhaps the Hackers over there will have a 'hostile takeover' of the backbone, not like anyone will really notice for a while....
BTW, when is it going to be an unmanned backbone? That's when the crazyness will start...
br
Tibbon
tibbon.com
Why is it that a company that can charge virtually anything they want to for their services (as they are THE provider) chooses to charge an insufficent amount, thereby ensuring bankruptcy? Idiocy? Surely!
But this internet thing will continue to balloon forever!!!
It'll make money like crazy!
That company didn't have a good marketing plan. See, my company is going to make money off of the internet with "web banners" because that's where the real money is!
What? noone looks at banners???
oh shit.
... in that story is that there is a town in the Netherlands called Hoofddorp.
Hoofddorp.
The fact that there is a town named Hoofddorp made my entire day. Hoofddorp. It's impossible to say without smiling. H00fdd0rp. It's a floor topping and a dessert polish! H00FDD0RP!
Too bad ./ and it's network can't buy it. That would be a pretty awesome thing for them to have. Somewhat useless if it wasn't really utilized, but cool.
./er routed though there they could really pound sites when they are first posted about
Perhaps all the european
Tibbon
tibbon.com
Where did you get that quote from about them not planning to switch it off? Here's a quote from the press release:
Since this is from their own press release, of course they don't just write "we'll stop operating," but that's pretty much what the above quote says they're expecting to happen.
If you look for some more neutral information than their own press release, you might be interested in this heise online article (yes, it's an English article).
Sig (appended to the end of comments I post, 54 chars)
Maybe you _don't_ want to know...
DNA just wants to be free...
the staff of that company begin spending all their time having homosexual orgies in the bathroom.
Not that there's anything wrong with that.
Watching Cowboy Bebop in my jammies, eating a bowl of Shreddies.
Can anyone explain how the two companies are related? Which is a subsidiary of which?
Some people have posted asking about how they're going to pay for keeping their network up, but that most likely isn't an issue, since you don't have to be *out* of money to file for bankruptcy. What they're trying to do by declaring bankruptcy is buy some time to find additional buyers. I'm not sure whether the rules in the EU are the same, but here's how it works in the US:
In the US, the two most common bankruptcy options are to file under Chapter 11 or Chapter 7 of the US bankruptcy code. Chapter 7 filings are what you do when you realize you've irrevocably screwed the pooch, and there's just no way you are ever going to make it. Ch. 7 means you've cashed your check, game over - your assets will be liquidated (sold) to scrounge up whatever cash possible for the companies you owe money to. Everybody goes home, then the earth is sown with salt under your company headquarters.
Chapter 11, however - this is what I presume they're using the European equivalent of - means you think you can turn things around, but you can't do it just yet or you can't do it because your existing debts are too big. You can declare a Ch. 11 bankruptcy when you've still got lots of cash - that's to keep things up and running while you work out a plan to pay back your existing debts.
There's a good side and a bad side for companies filing Ch. 11 - the good side is you get to keep on going, and you don't have to pay back any debts you ran up before you filed! Most of the time, courts will rule that the companies that provide you with critical services (like power, fiber, leases, etc.) can't shut you off during your bankruptcy, even though you've just (potentially) stiffed them for zillions of dollars. This is likely what KPN is doing.
The down side is that you no longer control your company - the courts do. And they pay lots of attention to what your creditors (those folks you stiffed) ask for. Your job is to come up with a plan to pay those creditors back over time for a reasonable amount (anywhere from 10% to 80% of your orginal debt, most likely). If your creditors don't like the plan, or think that they'd get more money back by shutting you down and liquidating assets than allowing you to live and try to pay them back, they can get the courts to probably shut you down. Also, don't forget that your credit is now hosed.
So ... I wouldn't worry about KPN's lights going off anytime soon. They probably filed the EU equivalent of Ch. 11 while they had plenty of cash in the bank to keep it running while they look for someone to buy their assets (probably the only chance they have of satisfying their creditors).
"95% of all Slashdot
Would someone be kind enough to explain to me why bandwidth costs so much? Is there someone making an unbelievable profit or is it really so expensive that my bandwidth should be capped and I should be charged per gigabyte downloaded?
It's just that KPN and Qwest do not want to invest much more money in KPNQwest.
So the plan might be to just let it explode, buy the remaining assets, and start a new company.
That's a likely scenario here in Holland.
It is what happened to DAF (trucks) and other companies.
They go broke, and in the same time they start a new company with the bought assets of the old one.
Your debts are cleared, and the tax accountants aren't wanting money from you anymore.
Still I expect it would cost money to buy the assets, so if they really do not want to invest anything in that network anymore, it makes my story just a wild guess.
Well, don't worry about that. We can get you back before you leave. (Dr. Who)
Heise's summary in english.
Really, I'm not out to destroy Microsoft. That will just be a completely unintentional side effect. -- Linus Torvalds
Now why would this be? Let's see:
Qwest simply saw its European spam hosting plans go down the drain and called it a day... Hey, maybe those spamsupporters were right after all about the guideline being bad for the economy and all *g*
Donate free food here
I've read on this finnish news site that KPNQwests network will be/was shut down at 17:30 BTC, and since they are currently in daylight savings time, that should mean 16:30 UTC. The article states that the source is at www.silicon.com, however, I couldn't find the information in there right away.
In article, they also mention that the KPN's British offices will be/was shut down around midday. I'm not sure on whether this means today (Friday) or tomorrow (Saturday). Probably today, which meant that the network went down like four hours ago..
kpnqwest provided the backbone to a quite big german hoster - strato. i can remember that strato had failures twice a week and they always blamed kpnqwest and kpnqwest said they will get better... they didn't really.
too bad for the employees, tho.
"It's such a fine line between stupid and clever" -- David St. Hubbins, Spinal Tap
the RIAA as made an offer for the backbone. The article mentions that this is their power grab at the media dollars of the uk. There is also an anonymous source linking the deal to Microsoft.
Rumors are that maybe even the network will be shut down within the following days as it costs abour a million dollars per day to keep it running. But that's just a small part of the picture.
KPNQwest also operates a couple of data centres - and one of them is providing all technical facilities for hosting about a third of germany's web sites for Strato.
Strato is considering to either buy the affected data centre or to plan an alliance with Cisco, IBM, Microsoft and Cable&Wireless to provide new technical facilities for their hosting business.
Strato received quite some bad press when one of their storage units unexpectedly shut down last year and it took almost a week to have their websites up and running (breaking their 99% uptime guarantee) - so right now, competitors are ligning up to take their customers as it isn't clear if KPNQwest's network will be working over the weekend and what plans have been made to ensure the availability of the Strato-websites.
Surely, a company that provides vital services for so many businesses has a lot of customers (by virtue of providing vital services to many businesses). So how can they go banckrupt?
Can't they just raise prices if they cannot operate at the current levels? If their services are vital, people will pay (or switch to another carrier, but this is another matter)
(ok, i don't understand economy very well, but could someone please explain it?)
I read this a week ago on The Register. And while it wasn't the actual filing of bankruptcy, it was certianly the beginning of the process.
How long is it going to take for an "underground" to form that taps into these fiber networks that are being abandoned by telecoms? Is there a precedent for this? Abandoned phone networks, abandoned power distribution grids? I understand that many of these backbones need very, very expensive equipment to "light 'em up," but it would seem that it would only be a matter of time before a sort of "private" 'Net was started using these abandoned fiber runs (both in Europe and in the US ... only 3% or so of American fiber is being used, right?)
$7 !
Well, that's really a bargain.
Owner of a Mensa membership card.
Because if they started "price gouging" then everyone on slashdot would be outraged :)
I don't know about this. We're a Linux shop.. We have huge orgies, but
1) They're not homosexual orgies
2) They're not in the bathroom
Speaking of which, it's Friday, so a reminder to everyone, the weekly VoyNetworks orgy starts tonight, and will be going on through Monday afternoon. $5 admission. Complementary condoms are available (now in designer colors)
Serious? Seriousness is well above my pay grade.
After all of you have finished having fun with your little joke I would just like to get seri...
$10!
Goddamit, I'm not letting some AC beat me to 0wning a huge network!
graspee
Capitalism doesn't work kids.
Recently on Slashdot there was an article complaining about the increasing costs of broadband yet the fact of the matter is that a large number of large telecoms are going out of business because they spent too much, too fast and make too little to keep up with their debts.
Global Crossing, PSINet, and STAR all bankrupt while WorldCom, in trouble and Qwest taking a several hundred million dollar loss it looks like the number of telecommunications companies is shrinking fast and it is unclear what will happen to their networks.
Not to be a contrarian, but this just goes to show that things aren't really black and white when it comes to the cost of broadband and in fact we may be getting it cheaply considering how much was spent building the networks.
Because they spell "fibre" like a filthy frog!
This is only the Dutch KPNQwest. Several KPNQwest subsidiaries in other countries will continue their services on the EuroRings network, and at least KPNQwest Finland has promised to connect their network to another backbone is EuroRings fails.
Currently circulating in Holland - translated:
If you bought 1000 euro of Nortel Networks stock last year, today you'd have 59 euro.
If you bought 1000 euro of KPNQwest stock in January 2000, today you'd have 12.50 euro.
If you bought 1000 euro of Alcatel stock in January 2000, today you'd have 170 euro.
If you bought 1000 euro of L & H stock in January 2000, today you'd have 170 euro CENTS.
But if you spent 1000 euro last year on full crates of Heineken, and drank it all, today you'd have 380 euro of (bottle) deposit money.
Moral of the story: the most economically responsible solution is to sit on the couch all day watching soccer on TV with a beer in your hand.
I disagree. If there were many companies fighting to bring bandwidth into your house, you wouldn't care if the least efficient / successful of them croaked. That's totally different than a monopoly raising prices because "whatcha gonna do about it?" Long-haul networks simply don't suffer the monopoly problem that last-mile networks have. Coincidentally(?), long-haul bandwidth is cheap and there's a glut of it.
As anyone who has ever been forced to use their service knows, Qwest can (and regularly does) screw up a wet dream.
It's "bah-dam pssshhh", dammit.
-- If no truths are spoken then no lies can hide --
KPNQwest is not (yet) down.
Here's a fragment from a traceroute done at 22:43GMT:
10 10 ms 10 ms 10 ms nl-ams-ri-03-pos-4-0.chellonetwork.com [213.46.161.62]
11 10 ms 10 ms 10 ms Asd-nr19.NL.kpnqwest.net [193.148.15.97]
12 20 ms 20 ms 10 ms nllei5101-tc-g1-2-1.12.kpnqwest.net [134.222.96.81]
13 20 ms 20 ms 20 ms deham5101-tc-p0-1-0.0.kpnqwest.net [134.222.230.18]
14 20 ms 30 ms 20 ms debln5201-tc-p0-1-0.0.kpnqwest.net [134.222.230.37]
15 30 ms 40 ms * czpra5101-tc-p2-0-0.0.kpnqwest.net [134.222.230.46]
16 40 ms 40 ms 30 ms UNKNOWN.KPNQwest.net [134.222.110.250]
17 50 ms 50 ms 60 ms cz.pl1.pl.geant.net [62.40.96.46]
18 60 ms 50 ms 50 ms pol-34-gw.pl1.pl.geant.net [62.40.103.110]
19 70 ms * 60 ms 212.191.224.250
20 100 ms 71 ms 70 ms task-pg-rtr.task.gda.pl [153.19.252.33]
21 70 ms 60 ms 60 ms pg-ci2-rtr.task.gda.pl [153.19.252.30]
Me
What does democracy have to do with capitalism? Anyway, KPNQwest runs some pretty big pipes over the Atlantic. If they do go under, those pipes and the means to use them pretty much have to stay open. Otherwise they're not the only ones who are screwed.
Last time one of KPNs lines was accidentally cut, it was very noticeable concerning traffic to/from the US.
To prevent massive congestion on the other lines we (the Dutch, anyway) have, I say we let the government do whatever it can do to keep those pipes afloat. Err, metaphorically.
KPNQwest was in debt. It offered a high yield bond in Jan 2001 to fund its activities based on predicted earnings. Those earnings grew too slowly. They couldn't pay for the bonds.
Then things got much worse, they had to try frantic trimming of the fat and that cost big bucks too. They had some 50 million Euros costs a quarter alone on that.
Servicing that debt cost big bucks. Now they're bankrupt, another telecoms company will buy the assets debt free.
THIS MEANS A CHEAP FIBRE NETWORK ACROSS EUROPE!
Meanwhile, the US has basically signed up to legalised monopolies run by the baby bells.
You guys can expect to be gouged.
The UK academic network (JANET) has three 2.5GBit/s links out of the UK. One is with Teleglobe UK, and two with KPNQwest
Teleglobe UK went into recievership on 20th May, and the connection will be cut as of 30th June. This links JANET, with American universities, and research networks (ESnet and Abilene). Connectivity to the wider internet goes through one of two KPNQwest links.
Despite JANET investigating alternative connections, this is still worrying for the UK academic users.
I am currently at a UK university, and while not immediately disasterous for the students, our research credibility will decline if our professors are isolated from the wider academic community.
I can only hope that Internet2 extends from AmericanNET2 to be truly international.
Source: http://www.ukerna.ac.uk/awareness/teleglobe.html
Nothing to do with the author being dutch :p
:/
I wanted to mod that up as informative, and then I prolly slipped using the mouse wheel or whatever
On the Internet, noone knows you're a dog, but everyone can notice that you are clumsy
...that the incremental cost of laying "extra" fibre is inconsequential. The difference between laying 1 and laying 20 is the additonal - trivial - cost of 19 strands... it's all the same hole, and it's a one-time bill.
The cost of lighting-up that same extra fibre is _not_ incremental but geometric. Each strand requires significant (and expensive) kit at either end, as well as an increasing the local copper-cable volume... which is why there is so much "excess" capacity the world over, not just Canada.
This sig left unintentionally blank.
Your gov't adds over 50% of the value of a beer in DEPOSIT fees? Holy crap, I thought $.10 was a little much!
Think outside the... Hey, where'd the friggin' box go?
I recall joining KQ back in the Summer of 1999 as a contractor. I spent one year there and had a great time in Holland! :-)
Back then, they had loads of money, a truly upbeat atmosphere and a great group of ppl. Back in the early days, just about everyone in IT department were either Contractors (the majority), or from companies like KPMG, Cap-Gemini, Andersen Consulting (now Accenture) and some other smaller companies.
Early on, they were spending LOADS of MONEY. Anything that you wanted, you'd get it. New hardware, software, cool gadget; no worries. Free mobile phones for everyone (Gosh I missed those) to make all the Internationals call that you want, and the KQ would pay for it! Ah the good ole days!
What has to be understood, is that back then, they were a brand new company that had $2bn invested in it (from KPN and Qwest). Then in October '99 they Floated on the stock exchange. Hence they had even MORE money to play with. This was also during the good old days when no one ever thought of a recession.
Everyone believed that Broadband was a good thing to be getting into. (To the office in The Hague we had 4 166Mbit ATMs... Great for Napster).
From about April/May in 2000, the Bean Counters started comming to prominence. Discrete emails would be sent around advising ppl to stop abusing their mobile phones etc. Movement to more permenant staff and the removal of Contractors and Consultancies. Cap Gemini were the first to go, closely followed by Pink Elephant. (Many of the consultants decided to join KQ as permenant staff). Any purchases needed to be fully justified and authorised. Usually rejected. The main problem involved in getting rid of contractors and bringing in permenant staff, was that their was a) a massive brain drain, b) inexperienced and many useless ppl were broaght in to replace some very good ppl.
A lot of presure was placed on managers to only hire permanant staff and mind their budgets. So all contractor overtime was cancelled (limited to 40hr week max). It was around this time that our manager (from KPMG) was cancelled - he was costing them way too much. This resulted in us getting a new manager that was cluesless about who all the team members were, what they did, or the technologies involved. Hence, by the end of the following October, with the exception of 3 permanent staff members, everyone in our team had left. (I'd left in early September 2000).
Our team wasn't the only one to collapse under poor managment. By the end of the year, all the contractors that I'd known had all left. Most due to management stupidity.
Loosing their Deal with IBM regarding their Cyber Centers could be discussed in further detail. I only know one side of the argument from a fellow contractor that was part of the team that had to pick up the pieces.
After that they were also hit by the recession with their share price falling from around the $50 mark down to around $8!
My association with KQ ended their, though I've still got lots of friends out there.
I do feel sorry for quite a few of my friends that are/were still there. I don't know what they will do now.
It is sad when I recall the upbeat atmosphere and excitement that was the company back in the Summer of 1999. Then you see it start to fall apart. Finally they become a victim of circumstances (IT Recession).
I could complain about other issues of management, however, I'd say that the recession and fall in the High Bandwidth broadband market is what is really to blame. No company, however good the management can survive when it has no clients!
-- "To ask a question is to show ignorance; Not to ask a question means you'll remain ignorant."
The filed ch 11 around the beginning of May and tried to sell non-core assetts to keep things running.
It failed. This is endgame. They _will_ be switched off unless a white knight in shining armour comes in to buy up the network....
.... which is unlikely in the current environment.
I'm a Telecommunications Engineer from Spain. Last week I conversated with an important directive of Telefónica and he explained the biggest problems telcos are having now:
Only an example: last year a client wanted a 2 Mbps link from London to Cadiz (in the South coast of Spain). It was cheaper for the client to directly contract a 622 Mbps link with a carrier than to contract a 2 Mbps link with a telco. Why? Because there are too many carriers competing, so they sell under price (expecting not to fail) and the result of this is they are bringing bankrupcy to themselves and to the rest of carriers and telcos.
This is why KPNQwest is filing for bankrupcy: too much competence, too much carriers selling bandwidth under price (just trying to survive).
In a few years, there'll be very few telcos and carriers in Europe (and USA), but they'll be very big companys. Good or bad? I don't know, we'll see.
Covad communications, a US based DSL provider, recently emerged from bankruptcy.
In the process, they were able to restructure their debt into equity for the most part, and reduce their operating costs.
Well I can only speak for my corner of KQ really and to be honest nan-a.* is a bit too much of a bitchfest to me with too many people eager to block and not enough common sense.
/dev/null but to say that Qwest loves spammers is a bit of an overstatement. Fact is that it's a paying customer and looking at the state of Qwest's balance sheet they can use any customers they can get. It's surprising how few morals people have when money's involved.
:))
I do not deny that Qwest (and to some extent uunets) abuse email seemed to be piped straight into
You could always use the argument that they would lose more money by losing customers by being a spam haven but I doubt it bothers a lot of people to be honest and Qwest is a big enough behemoth to draw business from bigger corps anyway (the miracles of being a baby-Bell).
Anyway I don't particularly want to justify Qwest's behaviour when it comes to spam but I can assure you that abuse policies for most of KQ's network is decided locally (XLink, EU.net and Netcom) and some of it centrally (Ebone &KQ central) but none of it is dictated by Qwest.
PS: give Zeus my regards ( drop me a line if you don't know who I am
Full Time Idiot and Miserable Sod
Nothing is real but the pain
Not exactly... They had roughly 2 billion euro's of debt...
Site slashdotted? Look here for mirrors, or even better: o
Is the "national provider" a regulated monopoly of some sort in Canada? The economics for capital recovery are a lot different when you don't have to worry about a competitor entering the market...
This story brings to life an assumption I had.
If you're in Europe, try tracert'ing around a bit to different sites in the EU (and US) - see how many times kpnqwest comes up - truly worrying if this network fries itself - what are the alternative bandwidth and routing options? scary...