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How Will WorldCom/UUNet Impact The Internet?
somewinner writes "CNN.com has an article discussing WordCom's impending failure and its possible impact on the internet. Given that WorldCom (via UUNet) handles 50% of US internet traffic, and a large percentage of traffic worldwide, some concern is certainly justifiable. However, the author of the article seems to think that nothing serious is going to happen."
this could be very interesting to see where it goes.
but not catastrophic....what do you expect, it to just shut down or something? Yea, right.
At hte ISP I used to work at, we called them "Screw-You Net." I guess that's still apropos.
Napster-to-go says "Fill and refill your compatible MP3 player", which is a lie. It's not MP3. It's WMA with DRM.
I just hope the gov't doesn't bend over backwards to bail out WC because of a "no other choice" scenario, thereby letting them more or less Get Away With It.
Lines and services will be sold to the highest bidder. It's not like every piece of equipment will be shredded...
Can't wait till my local telco goes down. Good ole Qwest. A lot of morons are pointing to all the corporate collapses saying it's the fault of the "Clinton Era" for de-regulation. Wrong. People are fucking greedy. But then again, telling big business they can do whatever they want is like telling a 15 year old boy he can watch whatever he wants on late night cable. Skinamax anyone?
Shift happens. Fire it up.
do you think noone will step in to prevent the network infrastucture from going under? think of the economic impact. the US/other governments will certainly step in to make sure traffic is not disrupted.
If Worldcom's failure were to bring a heightened sense of overall awareness about why you really DON'T want to put all your eggs in one basket, this may end up being a good thing.
If enough key (read: rich) players and businesses are seriously inconvenienced (read: lose a lot of revenue) because a key point of potential failure actually failed, then certain monopolies that have predatory practices might be trusted a lot less by default, with people seeking out alternatives "just in case".
Sounds like if it goes dark the U.S. Government (or should I say taxpayers) will be there to bail them out as is the case with any massive corporate fuck up...
When a company goes bankrupt for whatever reason, its assets do not vanish. They are property of the banks, and since banks are not in the business of running the Internet, they would sell the assets to the highest bidder[s]. This is true of an Internet company as it would be if a oil tanker company went bankrupt and the banks sold their ships to another company.
UUNet (Worldcom) has God knows how many routers, lines, Satellite equipment, and other things not in my vocabulary. Not only will they not "vanish," they will never be clicked off even temporarily as a result of this legal situation.
So relax.
There is currently so much excess high-speed telecom and datacom excess capacity that you could toss 50% of it and still have enough, though there may be localized disruptions. This is because of huge overbuilding during the dot-com boom.
Looks like the forces of darkness decided that global thermonuclear warfare wasn't needed for knocking out the Internet: Why bother when rampant greed and corruption will do the job for you!
All I know is that if the internet goes down in a flaming ball of fire, I'm sure as hell going to be pissed if I can't get my sublimedirectory.com!
This is going to be quite interesting to watch how the Internet is going to get over of the failure of these two major carriers.
Or can we really expect 50% reduced bandwidth worldwide?
UUnet is the absolute worst ISP *ever* at enforcing their AUP.
I view this chapter 11 event as a blessing
to the internet, and it serves them right.
RIP UUnet.
Just because there are tons of creditors for the equipment that WorldCom runs doesn't mean that the service will be interrupted. The massive amount of debt is essentially represented by the assets themselves. The ongoing costs are relatively miniscule, incremental, and covered by the incremental usage. The rest is allocated over an amortization schedule. In short, it does not serve creditor interests to simply shut the switches off. They have to recover part of their costs somehow, and that way is to keep the machine humming. My bet is that they will be sold at firesale prices to other major carriers (e.g. Sprint, UUNet, etc.) and the investors and banks will just simply eat the rest.
If UUNet goes away, then were will the spammers turn? Right now they have UUNet which says 'not our problem because the spammer is our customer's customer.' What happens if UUNet is taken over by a reputable ISP that shuts down spammers and those that harbor them?
The FCC has watched all mergers of companies holding large percentages of the backbone very closely in the past. MCI sold it's share of the backbone to Cable & Wireless to facilitate the meger with WorldCom AOL had to sell off ANS when it merged with TimeWarner. The companies most interested in WorldCom for its MCI or UUNet assets already have large shares of Internet backbone so WorldCom will have similar restrictions for using a merger or sell-off to prevent bankruptcy.
DMCA - Chilling free speech since 1998.
Skinamax anyone?
OK...
*nods head in exaggerated show of 'going along with it'*
OK...if that's the way you want to live your life....
*reaches for chair execution button*
Thousands of companies in over 100 countries rely on WorldCom for Internet access, including the Defense Department and the State Department.
Okay, I'm confused... is the State Department a company, or a country?
Did he say that deliberately, as a statement/joke? Somehow, I don't think so.
Is proof-reading a lost art, which AP archeologists speculate about in their broken english?
Is he an idiot business journalist who doesn't even know the word "agency"? The men in suits who work for the guv'mint aren't businessmen, they're "public servants." Can you say public servant?
I know this doesn't seem the most significant thing to get up in arms about, but it's part of a whole phenomenon where the journalists getting broad distribution are good old fashioned stupid.
The good and new comes from no quarter where it is looked for, and is always something different from what is expected.
wouldnt the US govt take over the operations? Already the internet is a critical part of the US economy.
...about 70 percent of all e-mails sent within the United States and half of e-mails sent in the world
'nuff said.
Since the Internet was designed to be a communications system that would stay up no matter how much of it went down, it will be interesting to see what happens if/when a good chunk of it does go down. Of course no one wants to believe that anything will happen to the existing system (I call this "social inertia" - people are resistant to ideas that radically change the world as they know it), so CNN's tech analysts may just be in denial.
.
And naturally, ANY drop in service will be hyped up and broadcast all over the media as "the result of corporate greed". . . completely ignoring the fact that only a small part of a fraction of a percent of the Net went down. Because apparently, the American media doesn't know that there are Internet users outside the US. .
Hard work has a future payoff. Laziness pays off now.
When they bill you, simply explain to them that although they originally invoiced you for $1300 what they actually meant to do was to give you a $2500 credit.
If they argue, just mumble something about irrational exuberance.
Invoicing, Time Tracking, Reporting
But Mr. Sidgmore said he assured federal clients, as well as business and consumer customers, that "the chances of our having a major blip in our service level are low." The company's UUNET facilities -- the so-called "backbone of the Internet" based in Reston -- will not "go dark under any circumstances," he said. See story
Winter 2010: With Glowing Hearts
1. Worldcom's telecom business has been losing money for a long time now. It's almost a lock that it will be sold off.
2. Ditto for a bunch of their other units - i.e. Skytel paging, etc.
3. The current CEO basically founded UUNet - it's his baby - it's not going away. The networks are owned by UUNet Worldcom - they're not going away either.
4. WCom's web hosting and data centers have been profitable for the past 8 quarters - plus, they are among the most well run DC's in the world. They're not going anywhere either.
Long story short - they're not going to get rid of anything making money - which is data and hosting. The worst that's going to happen is that you send your long distance checks to a different carrier. No worries, people.
We should check if the CTO of Worldcom had any link to Al-Quaeda, who knows this might be the cyberwarfare attack we were warned about :+)
:+)
This bin Laden is really a smart guy, he used USA's capitalist system to destroy their most important communication system
The US Secretary of Defense (Rumsfeld) was asked about the impact of WorldCom's demise on communications its contracts with the military. His response was something like: "Where there is a viable need for a service, there will be a provider. Whether it's the corporate shell the the contract was given to or the corporate shell that bought the service from the original corporate shell, the service will continue." His use of the term corporate shell was quite interesting, making corporations seem to be fictional entities surrounding a service. Many times, viable profitable contracts are bought out between defense contractors and the same people who served them just get their paychecks from a different company (eg: Andersen accountants who get hired by the replacing auditors).
Through Global Crossing's bankruptcy, they've been able to keep service up and running for many of their customers. Now, it's not likely that they're getting new business, but the business that they have still manages to continue to run using a minimal staff. Even though MFN has gone bankrupt, you don't see the power going out at PAIX. Adelphia is defaulting on loans, but my cable modem with them still more or less works. The investors lose; the banks and lenders lose; non-core people get laid off; and eventually, a long time later, the customer loses if they obliviously stick around after the company can't sustain operations anymore.
Worldcom is not bankrupt yet. Many believe it's likely though. CNBC reports they have $2B in the bank (one analyst estimates $1.6B after accelerated repayments), $30B in loans, and $54B in sellable assets (worth $8B at $0.20 on the dollar during a fire sale). It's up to the banks as to whether to kill their goose now that it's not laying gold eggs. Even if WorldCom goes bankrupt, the service will continue for quite a while. Some might buy the assets for pennies on the dollar and operate the same business with a better chance at making a profit. All of the direct investors and the lenders and the investors of the lenders will be left holding the bag, but service will continue.
- ez
(proudly ex-uunet, pre-WorldDom)
there once was a certain website I used to visit which illustrated this point... what was... goatsee... no that's not it... goatz... no... darn! I forgot. Can someone please post the URL on this forum?
There was a big internet outage where I work today,(Pomeroy) and our T1 lines are from Worldcom. Our MIS guys said it went beyond our company, and a lot of Worldcom's portion of the backbone was down. If our MIS wasn't just shifting the blame elsewhere, it was probably because a lot of the technicians who maintain the backbone have been laid off, just as the CNN article predicted. I suspect it is because Pomeroy has the best MIS department minimum wage will buy, but what if the whole backbone did go down?
How ya like dat?
If the top two internet backbones are going down due to financial difficulties, what does that say about the viability of making money providing such a service? One I could easily ascribe to mismanagement, but two? Seems likelier that there just is not the money in this that the companies thought there was. Perhaps big business is not the way to go here.
If brevity is the soul of wit, then how does one explain Twitter?
Worldcom is much more then UUNet.
It is likely the other units are dragging down.
You didn't hear it from me (hence the Post Anonymously), but I work for SBC, and we're getting orders for 600 T1s and T3's per week specifically by customers looking to move from WorldCom in Chicago alone.
Its close I hear.
Do not worship at the alter of mammon and thou shalt keep thyne internet connection.
Remember a few years ago when AOL's subscriber base grew faster than its network capabilities, and they turned to MCI to save their ass?
From that, this is what I would suspect would happen:
1. WCOME will go bankrupt, and be forced to liquidize assets and sell off infrastructure.
2. AOL will buy the infrastructure, thus making their entire network in-house, without accumulating WCOME's debts and any liabililties.
3. AOL get even bigger. More pr0n, yay.
~A'Ëq'i4d)^'$ÊSÈòB
WhirldClown may shut down entire sections of UUnyet if they can't find buyers soon. They'll break the system up into affordable chunks and sell off what they can. Some of it they'll shut down for good, to take the tax writeoff. Other sections will be shut down because they can't afford the experienced people any more. Big reseller companies haven't been paying their bills, some for almost a year.
/. may just disappear for hours each day, and ISPs are going to have to raise rates if they want redundant routes to avoid the worst congestion. The two biggest european carriers are in trouble, and redundancy is about to become very expensive.
Lately there have been lots of problems in the European networks, with large numbers of BGP4 routes going missing because of people switching away from ebone. The ebone guys have done a great job with too few experts, but slowly entropy and bit rot is causing problems. The dropped or blackholed or null-routed routes mean that major areas can't see each other for hours on end, until the BGP routes stabilize and find new routes. And those new routes tend to quickly saturate with traffic, leading to lots of lost packets and huge lags.
There is a lot of excess capacity, but none of it is being used for the moment. Putting expensive kit on the ends of the fibres and hiring expensive guys to run it just can't be done in this economy. So the internet isn't going to be as reliable as we've been used to, sites like
Thats the inevetable result of this shakeout, more expensive internet for everyone, and lower reliability for a while. A few years down the road, it will get cheap and reliable again, but that will take some effort.
the AC
Hemos is like...sci-fi fans;he thinks technology is cool, but he hasn't bothered to understand the science it's based on
WorldCom (via UUNet) handles 50% of US internet traffic
yeah, but if they would only enforce their acceptable use policy, the amount of traffic would only be 10%... ; )
::.. check out some Cell Phone Reviews
I may just be me but there seems to be a much higher emphasis on data than in the past ( I know i'm stating the obvious) our company just went with a telecom Allegience for our phone and Data one T1 split. The cost was suprisingly cheaper than say going SBC for phone and DSL. Concidering they gave us free callign between offices. a Stable connection with 16 IP's and any DNS routing we requested. ie. we could host our own Domain. The point I am getting to when one tried doing this in the past the cost was astronomical. Companies like these Allegience are smaller but growing more aggressive, and better managed. Ofcourse the big telecomes are loosing out. It all comes down to service. Why is it when I ask verizon to drop a T1 in my office there are million different charges and an astronomical fee. Yet another company who owns there own cable can do it for half as much and give me ten times better service. no really i mean it. and I dont work for them either.
Worldcom is not 50% of the internet.
Recent measures put them somewhere between 10% to 20%, depending on exactly what you're measuring (traffic level? number of users? number of routes?). Even with that level of traffic, some of that has other choices. For instance, a network may be multi-homed to Sprint and UUNet, and choose to move more traffic through UUNet. They wouldn't fall off the net if UUnet went down.
EBone shut down yesterday. One of the "largest and oldest" networks in Europe by their own measure. Frankly, if you weren't single homed to e-bone it was a non-event. No big decrease in traffic. No piles of user complaints. A big nothing. Quite similar to Y2K in fact.
Who Cares if 50% of the *carrying* bandwidth is cut off, we've been reading reports all over that only about 5-10% of the fiber laid is lit. so, saying its 10%, and assuming that all of the capacity on that 10% is taken up..(a gross overstatement), cut 50% of that capacity, and we still have 95% of the old capacity, just light some more wires.. and we're off.
Allright just a few things to say:
1) Not worried
2) If we had to worry cause no one was willing to bail them out someone would buy them out.
3) The network wouldn't fail entirely.
4) the worst case US governemnt will prevent this so i'm not at all concerned
5) If it did fail completly at least spam would be reduced.
telling big business they can do whatever they want is like telling a 15 year old boy he can watch whatever he wants on late night cable
Except that when a 15 year old watches soft core porn on cable, it doesn't cost tens of thousands of people their jobs or their retirement investments.
Don't forget that Friday is Hawaiian shirt day.
Wordcom claims that they handle 70% of all US email.
70% of my inbox is spam.
if no more Worldcom means that all that spam goes away, I'm fine with that.
There aint no pancake so thin it doesn't have two sides.
this is a map of AS paths & peering relationships on the internet. take a close look at the center.
Same way as the collapse of @home. I.E., pretty much not at all.
This story shows the end of an era...
All those silly meaningless CNN graphics that accompany computer stories used to sport a Sun 3.
It's been replaced by the mirror image of a PC.
*Sigh.*
Monday I got a call from MCI wanting me to change my long distance. I guess their still trying to get customers.
Sidgmore said UUNet handles more than 50 percent of U.S. Internet traffic, including about 70 percent of all e-mails sent within the United States and half of e-mails sent in the world.
So, if they handle only 50% of all internet traffic, wouldn't it stand to reason that they also handle roughly 50% of all email? Given the amount of spam that I get that originates from UUNet, it's not surprising that the percentage of spam is much greater than their traffic as a whole. UUNet has been a haven for spammers since the dawn of the internet. They rarely disconnect spamming customers, and their larger "corporate" spammers enjoy a provider that won't hassle them since UUNet make a lot of money off them.
I, for one, won't feel a bit of sorrow if they go under. I don't think we'll have too much trouble. I know for a fact that Time Warner and ATT have *A LOT* of dark fiber right now, and a good portion of it is ready to be lit up because they know they're going to need to increase capacity soon. The tier-2 ISP's are going to be hardest by this since a very large percentage of them rely on their links to UUNet, hence, many tier-3 isp's will probably see issues also because of limits on their upstream providers network. For those of us with connections directly to other tier-1 providers, I doubt we'll see any problems.
I wonder if the number of spams I receive will drop if UUNet goes away...
Need Free Juniper/NetScreen Support? JuniperForum
Just because they are juggling their financials and are in bankpuptcy does not mean they stop forwarding traffic. Every network provider worth its salt these days is JUMPING to bankruptcy court to wash itself of the debt (stupid lenders!). Within a couple of years I predict we are going to see most of the major players take the BK plunge ... dry themselves off and go forward. In fact, the ones that will struggle will probably be the ones that DONT get that debt burden off their backs through BK. They will be unable to compete with the others.
Yes, some can't even spell. They write "horrable" instead of "horrible" and "edditing" when they meant "editing". Or is it "editting"? Us gramer nazis should spel carfuly!
I despise all of this fearmongering over 'what would we do' if Microsoft, or Worldcom, or Enron, or AOL/TW were to fall. Even if it's justified, who's fault is that? Who let them get so big and unobstructed that they could hold an entire economy hostage? My opinion is that, in a free market system, "You need us," is not a viable solution to a failing business. Whether it's an airline or a telecom, let'em crumble. They all seem eager to be left alone, free to 'innovate' or 'compete' until innovation and competition reveals them to be a failure, and then they're newly born socialists begging for government cheese because they're existence is supposedly good for 'the people'.
Why does everyone assume that WCOME is now going to go bankrupt? The lied on their earnings, but that doesn't go in and take 3.2B from their bank accout. Also, unless it changed throughout the day the big story on cnbc this morning was that WCOME is saying they are NOT going bankrupt anytime soon. It caused their stock to triple throughout the day (from .07 - .22)
Will the UUNET network go dark? Not a chance. If/When WCOME does have to sell off its assets some other provider will be right there and will probably take the entire division-people and all. FUD does make good news though.
Actually his sentance is correct. You must have read it wrong, otherwise you don't know english very well.
Thank you, Speed Racer!
If the situation turns bad enough for them, they will end facing bankruptcy as well. Anyhow, it's always better not to have a huge debt than to get rid of it through bankruptcy.
Unless you cheat, of course. As everybody knows, Microsoft, for instance, is being investigated by the SEC for making their earnings seem lower than the true figures.
©?åß®?åyouare the worst crapflooder i've ever seen.
Worldcom is a big company and it will be difficult to topple.
Look at IBM... Not quite the same situation, but it was doing pretty bad there for a while. Wish I bought some of their stock then... Hmm... Maybe Worldcom would be a good buy now @ $0.22 / share? Man, for $500 bucks you could have some 2200 shares.
Bottom line is that if they manage the situation properly, they will survive.
Incase it escaped anyone's radar Worldcom owns OzEmail, which according to an IT news website is ranked the No. 2 Australian ISP after Telstra. This most likely means that Worldcom will have to sell off OzEmail to recover some assets for it's creditors, but this is not all bad because it means it's original owners could buy it back for far cheaper than they sold it for. There is some more information at this link and this link.
aus.music.scrapbook
About forty years ago, it looked like Lockheed was going to go bankrupt. The stock fell from $60 to $3, which was below par (i.e. breaking up the company and selling off the assets would have recovered more money than the stock was selling for). The problem was that Lockheed wasn't just a defense contractor, it was the defense contractor, and during the height of the cold war, to boot. They couldn't be allowed to go bankrupt.
So the government bailed them out.
Then, some years later, there was a little problem at a generating plant owned by General Public Utilities (GPU). You might not have heard of GPU but you've heard of the plant: Three Mile Island. GPU stock took a hit, as you might imagine. In fact it looked like it might go broke. The problem was that it was a utility, which means it was a monopoly. If it went broke the lights went out over a fair stretch of countryside. That couldn't happen.
So the government bailed them out.
Now, my father saw both of those coming. He bought Lockheed stock at fire-sale prices because he knew that they couldn't be allowed to go broke. He cried because he couldn't afford more. He made out like a bandit.
When GPU started to go under, he bought all the GPU stock he could. And this time, he could afford more. He made out like a bandit. So well, in fact, that he assured himself a comfortable retirement. He's quite conservative, and told me ruefully, "I always preached the values of thrift and economy. Now I'm comfortable in my old age, but it isn't due to any of that. Hmph."
Then the Seattle public utility, through a boring series of blunders, started to go broke. They couldn't be allowed to go broke, for the same reasons that GPU couldn't and Lockheed couldn't.
So the government...said "Hey! Wait just a darn minute here!" And didn't bail them out.
And they went broke. And the lights stayed on.
Ditto when California started having rolling blackouts. Big raspberries from the Fed, because the Shrub knows California wouldn't vote for him if he was rolling out the red carpet in front of Jesus Christ for the Second Coming. Much stick-waving, stunningly bad contracting, and shouting, but the lights came back on and stayed that way.
The days of government bailouts are over.
Worldcom (yeah, not UUNet) has melted down before. It sucked, but we just switched over to our backup and ended our contract with Worldcom. One of the political blogs I read has a note on the whole Worldcom clusterfuck. linkage
If the market sorts itself out in a natural selection type process, guess what.
MS-Com will be the new owner of UUNet.
They can float that company for a while, taking tremendous losses to drive competition out of business.
Once the competition is out of business, it isn't their fault that they have 100% of the market.
Natural selection no longer exists in the free market system thanks to a bunch of pleabs (also known as PHB's) that insisted, and still insist, on not using good cheap product, but instead good(ish) name brand products, with a company behind them, that is so large, they don't have to offer customer service.
It will be the GATES-turner-warner zaibatsu that sells you your breakfast cereal pretty soon. When will people wake up.
I am a steadfast conservative, but even I realize that the thought processes I have don't account for the monolith that is MS. We can no longer sit back and say, let the market correct itself.
Buying a line from someone other than the backbone doesn't make much sense. They have to sell the same bandwidth twice just to turn a profit, and that's assuming they sell it at the same price. There's more to it, of course (OC3 vs. T1 price/bandwidth ratios are different), but it ends up that you get what you pay for (bandwidth-wise & latency).
Bernie Ebbers is supposed to appear next week.
Here's a quote from abcnews.com:
"Former CEO Bernard Ebbers received $10 million last year in bonuses and when he exited the company this past April, he left with a golden parachute of $1.5 million a year, and a company loan of $400 million.
But if he sounded like a man leaving a healthy company behind, that wasn't quite the case. During the same month that Ebbers left, WorldCom laid off 3,700 people. "The companies were run into the ground," said Mark Cooper director of research of the Consumer Federation of America, a group that advocates pro-consumer policy, "Senior management made off with a fortune and labor got laid off."
The hearings will be worth watching...
I see a LOT of comments here as to the fact that if UUNet does in fact tank, other companies can pick up the slack by lighting up some of the excess dark fibre and going from there.
Problem: Most of the dark fibre out there has no equipment hooked up to it. So, the telcos and other large ISPs will have to install all kinds of new ATM switches, SONET Transport Nodes, et al.
Thing is, these switches and transport nodes cost mucho dinero. (fully outfitted switches/TNs cost millions... EACH) Mucho dinero is something most telcos and ISPs *don't* have. Capital budgets have been slashed since the dot-com era.
So where are the telcos and ISPs going to get all of this upgrade money? Not from banks, they've already been burned by 360.net, Global Crossing and now WorldCom.
Things may turn out to be a trickier situation than you might think.
our company just went with a telecom Allegience for our phone and Data one T1 split.
Interestingly enough, Allegiance just acquired (bought isn't the word) Intermedia Business Internet from Worldcom. Worldcom purchased IBI because IBI bought DIGEX (the backbone and hosting provider). IBI spun off Digex (the hosting provider), but maintained enough of an interest for WCOM to buy IBI just to have control of Digex (the hosting provider).
So the original DIGEX backbone is know with Allegiance...
this could possibly be good in the long run... or it would be more accurate to say that good can come of this. Vigilance is required if growth and stability are to be continued. using the generic 'we' here, we have become fat and lazy because bandwidth is unlimited in many ways. P2P apps are horrid hogs that if the entire net were to be halved, could use some serious optimization. Like so many other things, they are unproven simply because there is no real limit to their use as of yet.
Isn't the internet supposed to be able to withstand a nuclear attack? I'm sure this will be a minor setback and the internet will continue to function as usual.. just a few routers will be in the dark :-)
YES! Someone with a Brain!!
Let them all Burn!!
It sounds ridiculous, but its a good opportunity to replace the big telecoms and their oppressive pricing structure. The Internet was built from phone lines to begin with despite the costs of leased lines, ISDN, Frame Relay, ad nauseum. So what if Qwest and UUNET go. The Internet can rebuild with wireless instead of phone lines. It's really only about 7 years since people in general used it for business. My point is, does the Internet have to depend on Telephone companies forever? REBOOT
make them spin them off into 3 or 4 equal parts then sell tham to the other large interstate/international telcos.
True capitalism = lots of similar companies = jobs for everyone who wants one.
Considering we are right in the middle of connecting a T1 through UUNET.
Nathaniel P. Wilkerson
www.haidacarver.com
By claiming them in the name of ACs everywhere! HA!
Too late, logged-in cocksucker! The first post belongs to ACs!
Ludwig von Mises documented, and Milton Friedman won a Nobel Prize for espousing, the "Business Cycle".
When lending is lose, when governments print money for instance, there is over-investment in factors of production, in large scale investment. Look at the postings here, you see comments about "excess of bandwidth", and that's a perfect example of the business cycle in action.
Now, as exemplified with the collapse of the ".COM bubble", there is a contraction in the supply of capital. The Federal Reserve tightens control, and there is a shake-out of unprofitable businesses. Worldcomm is just a symptom, it is not a cause. All their creative accounting did was hide the problem, it neither caused it nor prevented it.
However, when the business cycle is on the "down" side, there is an excess of factors of production available. The "bandwidth glut" is ready and waiting to be picked up and utilized more efficiently to the benefit of consumers.
Without this artificial expansion and contraction of the money supply, business would still come and go but not in large waves. Factors of production would be created at a more conservative and sustainable rate.
Industry, both business and personal, flourishes when external factors, such as money supply, are stable. That is why a hard currency standard is a good thing, and prevents the boom/bust cycle that fiat currencies foster.
Worldcomm's customers still want service, Worldcomm's cables are in the ground, their routers and workers still exist. I don't care if the name of the owner changes, so long as they are allowed to fail if they cannot supply the wants of the consumers more efficiently than Worldcomm did.
Bob-
The Ludwig von Mises Institute. The reasoning individuals economics
Did you bother to read my follow-up post about a mistake I made? You remember those, right? Mistakes? I made one. I'm truly sorry.
from: nasdaqtrader
So how could WorldCom fail?
"If anything can go wrong, it will." - Murphy
These two are viable assets of Worldcom that would be profitable as standalone companies, therefore Worldcom could easily sell them off if necessary in their restructuring.
Actually, Sidgemore did not found UUnet -- Rick Adams did. Adams brought Sidgemore on board UUNet because Adams realized that he needed someone with Sidgemore's track record in running telephonic and networking businesses. I think that Adams became CTO of UUnet when he made Sidgemore the CEO.
A lawyer & digital forensics examiner. Also an expert on open source software (OSS).
Global Crossing? Oh, I guess not.
.bust?)
KPNQwest? Nope. Ride the Dark Light.
Teleglobe? Oops. Spent all their cash.
Williams? The big-oil mothership didn't bail them.
SprintLink? Hummm...
- No major accounting scandal, so far.
- Only a few layoffs (what, 10-20% since
- They have ca$h
- They have links to most places where you'd like to send traffic to.
- Maybe a bit less bandwidth than their competition, but what use is a handfull of 0c-192s if you're not using more than a couple of OC-48s?
While Worldcom won't erase itself just yet - heck, it seems to have good chances of survival, there'll always be an option, or someone willing to pick up the slack - without overspending to do so.
Money, can't live without it.
Sprint has SIGNIFICANT debt issues. Some $30 billion. They're the next one to fall.
All this about WorldCom's tremendous market share is a lot of crap. A lot of this is based upon their AOL transport contract. They are trying to generate FUD for a government bailout. The fact is, UUNet performance has declined steadily in the past couple of years. They were NOT the first to deploy OC-192 from coast to coast.
Coincidentally Vint Cerf, currently the ICANN Board of Directors chairman, is a WorldCom Vice President.
As long as the government doesn't step in and do something stupid, it should strengthen the internet. In order to pay their bills, WorldC will have to sell their property to other corporations, with some of it maybe going to smaller companies. However, I doubt this will happen. I'm sure the government would step in and save the corporation from *failing*--which is true anti-competition-- and at the same time hurt consumers with that coercive force.
If the market is left alone, this would be a good example of how capitalism does its own "trust-busting," morally.
I'm surprised that this didn't have its own Slashdot story. But Ebone has shut down. The Ebone sites are dead, and the employee site has a sad message.
Long ago when I was punching the clock at Verio and we were implenting DSL throughout the country was when I saw the numbers on DSL and other high bandwidth solutions that were just started to sell like hotcakes. Remember this was when DSL was 300 a month...
Well, the number jockeys estimated(not only Verio but Bell South and PacB) that for broadband to become profitable it would have to sell bandwidth at a loss for at least 10 years. The idea was to get the local consumer hooked so that DSL,Cable, would be like a telephone.
The internet wasn't so glutted with shite in those days so early adopters of DSL didnt have much to look at. MS service packs, some ISOs, lotsa geo cities crap, etc. Rest of the world was still on AOL.
We got the call to drop to 35$ a month, this was in 97 for DSL. 30 of it went to the Bells. But corporate wanted a broad band roll out for the investors. We had our fiber so it wasnt an issue, lotsa capacity.
IT WAS underestimated the amount of bandwidth that people would use in their homes. Our 300 DSL users were always saturating the lines, WTF? 97 what were they look at? They had it shared on lans, natting to the neighbors house, rigging the apartment buildings. You couldn't change the TOS after the fact.
So 10 years to begin to break even we were told in 97. BREAK even not pay for the new infrastructure, high costs of bandwidth..... And remember the numbers had initially been run for 300 a month.... So where are we now five years down the road. At a severe fucking loss.
Boradband prices for the home should have been hire out the gate with a bandwidth cap. But the companies all got on the unlimited bandwagon and we all got used to fat pipes at a low cost.
We could have taken a lessen from dial up days. 20 bucks a month for unlimited? People keeping the modem bank tied up for nineteen hours a pop at 28.8. Shit, there wasn't any flash in those days but still, nineteen hours.
I no longer work in the ISP end, hung it up cause I kinda saw all this coming.
We need a little reality check. Lose some fucking bandwidth, go outside, not fire up the console.
I just returned from a two year stint in South America. And the first month with no DSL was a like a herion junkie with the DT's. But I discovered paper books again, got back into fitness and some old hobbies, and learned to sit on my ass less in front of my boxen( though now that I am home I got DSL again and 802'ed the house.
Bandwidth isn't a god given right. We just convinced ourselves it is.
Puto
The Revolution Will Not Be Televised
Remember last year, when that beeper service provider went down and tens of millions of beepers stopped working? It's a real worry.
...and a bunch of you are misinformed.
1. WorldCom won't go under because it's not in their creditors' best interest. WCom could file bankruptcy today and nobody would be surprised. If WCom owes you money you just got screwed. They'll work out a financial plan that helps WC recover and allows the creditors to get their money, because THAT is what makes the world go 'round.
2. There was definitely some shady accounting and subpar management, but I don't think that was their biggest error. WCom banked on continued growth in the tech sector. I'm not sure if you remember this, but it crashed hard. Now they're left with a backbone to support 20 years of consistent growth that's not happening, and a bill to match. They gambled and they lost...big.
3. Saying that only 5-10% of the world's fiber is lit is perhaps the most misleading statement here. So let's say you're going to run 1000 miles of fiber from Chicago to New York. The expense is not the fiber, it's 1000 miles of ditch. So you lay a 100 strand bundle, but you only need 5 strands....right now. That's only 5% lit. But it's still yours and surely you'll be damned if you're going to let me have it.
No, I'm not a WorldCom employee, but I'm a big fan and a big customer. No, their service isn't that bad. If you think I'm wrong, try ATT.
I work for a very large Federal Department that just accepted a bid for 2400 T1 VPN connections from UUNet + installations + Cisco routers for each one. I wonder if they're going to pull through for us. I don't know what the alternatives are.
And at 1700BST yesterday the EBone shut down as a result of KPNQWest's collapse. Nobody was found to buy their bunch of "God knows how many routers, lines, Satellite equipment, and other things". It is indeed possible for key companies to collapse and for infrastrauctures to not keep running, especially at this point in the economic cycle, when there aren't a lot of other companies around with the resources to buy Worldcom.
Consider also - it might be better value for the receivers to sell off Worldcom's assets at auction than find a buyer for the networks as is.
ben_ the technologist and platform agnostic
We just had a similar problem here in Europe where KPNQwest folded about a month ago. I don't know the exact figures, but they handled I think close to 40% of north-european internet traffic in their peak times, as well as a large amount of southern european traffic and of course one of the main links to the american continent. Their networks are now going down one by one due to lack of money for paying electricity and employees, but I must say that apart from a few small hitches, I noticed almost nothing. As I work daily on servers all over the world using SSH-links, I would've noticed if mayor shortages of bandwidth would have occured. However, we seem to have such an excess of bandwidth that even the failing of a large section of the network doesn't actually seem to be a big problem. I remember the times that I could actually notice America waking up by getting time-outs on American sites ...
---
"The chances of a demonic possession spreading are remote -- relax."
... like an old oak table ...
Ceci n'est pas un sig.
Bill G could still end up owning the net at this rate.
Some leaked memos on fuckedcompany.com hold that up. If the US government will bail out Amtrak, they will definitely bail out WorldCom. To do anything else would be devastating to the infrastructure and economy of the country.
and my local cable and DSL providers put a 5gig cap on me?
I run my own mail server and firewall. I selectively deny packets to my mail server (port 25) with the firewall. As of this time, I have basically blocked every Asian IP block that I can identify.
Maybe, in a few years, Asians will learn to the rules of the road on the information superhighway and how to operate computers on it, but, until/unless that happens, I'll just keep blocking e-mail from Asia.
I'm suprised M$ hasn't shown any interest in buying Worldcom. They want to take over the world, right?
since we began living in a complete market economy, where protectionism (steel industry), government subsidies (farming, airlines, but please not trains), and preferential treatment (ms) have vanished from these great lands, the true beauty of capitalism has been allowed to flourish unchecked (enron). life is beautiful!
I think the redundancy is with the article. There isn't anything really new to it in the first post.
He saw some dirty arabs and fired. Too bad it was just some friendly kurds, BBC reporters and his fellow cowboys.
Now if I only had a pidgeon coop.
Like, how many times have UUNET gone down in the last couple of years AND your internet connectivity dies?
Yeah right, lots of BS in that article!
You're right, but Sidgemore did take the company public the first time, and orchestrated many of the original network nergers that made UUNet/WCom the powerhouse it is today.
People have utilized many different things for money, the only requirement is that people agree to use it and use it widely. Gold gained the widest exceptance in the "west", but silver has been used just as well.
If "gold" were to suddenly lose its scarcity, it might itself be used in some form of fiat currency, or (I believe more likely) people would simply shift to silver, or paladium, or platinum, or even iron.
It doesn't matter what the medium of exchange is, it is only important that no one or no small group control its supply. With that control comes abuse, as is seen with fiat currencies everywhere and everywhen.
Bob-
The Ludwig von Mises Institute. The reasoning individuals economics