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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."
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.
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.
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.
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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.
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)
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.
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.
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.
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.
They are failing, so they are trying to screw you?
Has anyone sat down and asked themselves, seriously, why all these well established telco and internet providers are failing?
One answer might be that they are terribly mis-managed. Probably attributable to years of eating off the fatted calf that was acadameia.
I think, though, that in a push to be competitive, these large corporations/businesses have priced themselves out of business. Even though I just heard a lot of nods from the contingent that seems to think asking people to pay for the bandwidth they use is excessive, I am not on their side. I don't believe the largest company in the US, and the largest carrier in Europe failed because they wanted too much money. They both still have upwards of 50% of their respective markets.
So you can't say that competition is getting them, since they have 50% of the eyes, and are still going under. So it is not a non-competitive issue.
I think we, the users, are not paying for what we use. The lowest level carriers seem to be knocking these people out of business. The telcos, or whoever.
Screw-you-net indeed, but they obviously didn't screw you good enough, so now you will have to deal with other companies that will either go under also, or start charging you what they are charged.
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.
"Screw-you Net," because of arrogance and poor management, not price.
And it's not as it ISPs have a choice about paying for bandwidth. They get a connection to a teir1 carrier, or they suck; two choices. It's entirely different than me at home wanting to pay less for a DSL line.
Me sitting at home wanting to pay less for a DSL line is a good thing. Consumers exert downward pressure on prices; they want to pay less. That's how markets work. Producers want more, of course, so they try to raise prices. That's also how free markets work. If screwyounet was not charging enough to cover its costs, then they were boneheads. This is not my fault for wanting to pay less for broadband at home, and it's not my ISP's fault for wanting to pay less for its T3 connections. It's screwyounet's fault for being morons and giving away their product.
The more I think about it, the more I think you're totally wrong. There was a huge buildout of network capacity in the 90s. Many of the businesses who were buying it are now defunct. So there's vast overcapacity, and it's even cheaper, now, because the telecoms market has crashed.
I wonder how screwyounet is doing, separate from WorldCom? WorldCom seemed (to me) to be a criminal organization from the get-go -- jus an aggregator rather than a producer. Like the 90's T. Bonne Pickens kind of corporation. Screwyounet may have just been dragged down with WorldCom's "accounting irregularities" (i.e. lying, fraud, etc.), which has exactly nothing to do with me wanting to pay less for a DSL line, or even what scrweyounet charges for bandwidth.
since they have 50% of the eyes, and are still going under. So it is not a non-competitive issue.
Dotcoms all went for market share over profits. So what's your point?
I think we, the users, are not paying for what we use. The lowest level carriers seem to be knocking these people out of business. The telcos, or whoever.
This is retarded. We're paying what they charge for it, if we feel it's worth it. We are under no obligation to pay more for something just to save their butts. They can try charging more, if that's the problem. If they charge more than the public thinks their product is worth, they sell less of it. There's a sweet spot there somewhere that some guy named Laffer had something to say about.
Screw-you-net indeed, but they obviously didn't screw you good enough
No, they're obviously morons for not civerign their costs, if that's the problem they had.
so now you will have to deal with other companies that will [...] start charging you what they are charged.
A company like that would NOT be run by morons.
Napster-to-go says "Fill and refill your compatible MP3 player", which is a lie. It's not MP3. It's WMA with DRM.
Actually, it was "corporatism" that brought on this failure, not "capitalism". We've been moving away from capitalism here in America since the 1978 Supreme Court decision that defined corporate political donations as "free speech". Our biggest corporations essentially bought the 1980 elections after that decision.
That's when these corporations began a major paradigm shift away from "maximizing profits" and towards "controlling markets". Capitalism requires free markets, and doesn't function in controlled markets.
It was sarcasm...
...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 wouldn't be so sure about this.
Just have a look at what is happening right now with KpnQwest in Europe. The banks tried to queeze money out of interested companies that wanted to buy it, until nobody was left..........
If they don't screw that up as well, they might be able to at least keep some national parts running in Germany, Switzerland and I think, Sweden by selling them of. But the rest ?