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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."
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".
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!
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?
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.
It would be better to re-nationalize the internet backbone, then to bail out those bastards at Worldcom. It was government controlled when only the military and universities could use the internet. I hope Milnet, formerly Arpanet, the part of it that is still there to keep our defense network up and running in the case of an enemy attack, is not part of what Worldcom could pull the plug on.
The Uncoveror: It's the real news.
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.
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
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.
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 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?
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.
this is a map of AS paths & peering relationships on the internet. take a close look at the center.
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.
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
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.
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.
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.
AOL will buy the infrastructure
That scenario doesn't seem very likely considering that AOL itself has severe financial problems, such as last quarter setting a record for the largest monetary loss ever experienced by any corporation ever at $52 billion. It makes WorldCom look like the very essence of fiscal responsibility.
"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.
but it does leave an awful mess that someone is going to have to clean up.
You were most likely modded down as a troll because most people older than ten realise that mocking the name of someone you disagree with, instead of presenting real arguments, is childish and immature, and nobody wants to hear the political opinions of a ten-year-old.
Best Slashdot comment ever