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The Internet

How Will WorldCom/UUNet Impact The Internet? 259

Posted by Hemos from the ka-THUMP dept.
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."
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How Will WorldCom/UUNet Impact The Internet? More

How Will WorldCom/UUNet Impact The Internet?

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  • "Screw-You Net" (Score:1, Offtopic)

    by 1010011010 ( 53039 )
    At hte ISP I used to work at, we called them "Screw-You Net." I guess that's still apropos.

    • Re:"Screw-You Net" (Score:3, Insightful)

      by Anonymous Coward
      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.

      • Re:"Screw-You Net" (Score:3, Insightful)

        by 1010011010 ( 53039 )
        "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.

  • 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.
    • They would be stupid to do so, because bailing out a company like doesn't get rid of the problem. The problem is, that consolidation is necessary. Let the market sort it self out, through a sort of natural selection process. Of course they should step in if one or more companies begin to form a monopoly in the industry, but that's a long way off right now.

    • Re:When push comes to shove (Score:4, Interesting)

      by uncoveror ( 570620 ) on Wednesday July 03, 2002 @07:32PM (#3818761) Homepage
      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.

      • If WorldCom were to close, other large providers (AT most likely) would buy up their existing fiber and hardware... They wouldn't have the money problems because many people would suddenly need service and might have to pay a little more up front to get it.

        It'll be interesting to see what happens.

    • worldcom was probably counting on that...

    • No Government Bailout In Sight (Score:5, Interesting)

      by Mr. Protocol ( 73424 ) on Wednesday July 03, 2002 @08:53PM (#3819128)
      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.

  • Hmmm... (Score:2, Insightful)

    by TheQuantumShift ( 175338 )
    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?

    • Re:Hmmm... (Score:1, Informative)

      by macdaddy357 ( 582412 )
      Don't blame Clinton for deregulation of communications. That was the trickle-down economics of the countryclublican House and Senate. The deregulation disasters began under Ronald Ray-gun. The airlines, Savings and Loans, other lenders, energy, communications, and radio all went to shit as a result of deregulation. When they said "we need to get goverment off of business's back," far too may of us fell for it, and all the wachdogs got their teeth pulled out. They need their teethe back, and we need even more watchdogs. Greed is still evil, even in business.

    • Re:Hmmm... (Score:2, Interesting)

      by mudshark ( 19714 )
      Want to hear a tale of double irony? Qwest is my local telco, but I'm not a customer. I've hated them for years. Around '98 I was shopping for ISDN to my home. Qwest wouldn't do it -- even if they would, they said they would charge an ungodly (many hundreds) engineering and buildout, plus their rate was $70/month for 150 hrs of single B channel, with a metered rate after that. NB #1: I live in a central part of a metro area of nearly 1 million. NB #2: My house is 26,000 feet from the CO (!).

      Fine, sez I. I'd rather stick rusted, lye-soaked icepicks through my eyeballs than get a premium service from these vultures. But dialup was slow, and one day a rep from Brooks Fiber came to my workplace wanting to talk about becoming our frame relay and Internet vendor. After we went through the basic Q and realized that they couldn't quite offer anything to beat our in-place solutions, I asked him if they offered a BRI product to my exchange. He called an engineer, and within a minute told me they did. I asked him about the rate. "$70 a month flat, no cap."

      Without skipping a beat I asked him if he could bring a contract over later that day. He did, I signed, and four weeks later I had ISDN at my house. I paid zero dollars for engineering, buildout and installation, in spite of the fact that all this took place on Qwest copper and necessitated a repeater because the circuit was WAY over 18,000 feet. And four years later the only downtime I've ever had was due to that antiquated copper contracting in a cold snap...but because I was dealing with a CLEC I was able to get it fixed over Thanksgiving weekend.

      Oh yeah, the irony part. Brooks got bought by MCI, which was subsequently gobbled by Worldcom. I don't like to think about what could happen now. It's like being a tiny mammal staring up at two dinosaurs who've been locked in mortal battle, and noticing that they're both dying of blood loss.

    • 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.

    • Re:Hmmm... (Score:2, Interesting)

      by antirename ( 556799 )
      And how much bandwidth is really available? And how much is really not being used? With the ISPs raising prices, it's worth asking. Could we just soak up half of the bandwidth to the U.S. dissapearing? If so, the prices are being raised because of speculation on the part of the providers a year or two ago, and not because "abuse" is hurting the service. Just something to think about.
    • 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.

      I would say, "right." When the government turns its back on its duty to ensure a fair and free market (as opposed to ensuring anarchy), then people get to act on their greed in destructive ways. Just read the business section of any newspaper, or as Doonesbury calls it, "the crime pages."

      I remember a two-panel political cartoon from a year or so ago, around the "transition-team" time. The left panel had Clinton sizing up a horse labeled "the economy," and writing "thouroughbred" on an inventory sheet. The right panel had Bush looking at the same horse, but writing "broken down nag" on his inventory sheet.

      I think Bush (in the cartoon) was right. Enron, Tyco, Worldcom, Xerox, Vivendi, dot dot dot

      It's almost like Clinton was a Republican (free trade, gutted government regulations, etc.) and Bush is a Democrat (protectionism, tariffs, deficit/pork spending, etc.). Of course, it's more confused than that, and both politicans and parties are actually very corrupt.

      Sheesh. No wonder keep voting for exactly neither of the two major parties... I'm waiting for a Free Trade with and Iron Fist kind of candidate, who will promote both free trade AND corporate accountability, regulation, oversight, etc. I don't want socialism, and I don't want corporate feudalism. I want capitalism -- you know, free trade, free markets, and strong government regulation and oversight to keep the market a level playing field, and keep fraud out of the picture.

  • Worldcom's failure MIGHT be a good thing. (Score:5, Interesting)

    by AgTiger ( 458268 ) on Wednesday July 03, 2002 @07:23PM (#3818703) Homepage
    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".

    • To be honest, I don't think worldcom's backbone (as big as it is) is really going to make the internet hurt a lot if it shuts down. Europe recently lost the EBone (its cross-europe network backbone) and other than some minor routing glitches, nothing much has happened (percentage-wise, EBone carried a lot more traffic than worldcom does; obviously, in actual packets the load is smaller)
  • 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...

  • The author is right (Score:5, Informative)

    by Anonymous Coward on Wednesday July 03, 2002 @07:24PM (#3818708)
    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.

    • Further, remember that UUNet was not always a Worldcom business. It is not implausible that in a bankruptcy scenario, UUNet would be bought by someone else as a going concern... as being a business unit more-or-less outside the scandal. Malc.
    • 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 ?

  • excess capacity will save us (Score:3, Interesting)

    by JoeBuck ( 7947 ) on Wednesday July 03, 2002 @07:24PM (#3818709) Homepage

    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.

    • Excess? There's an excess of bandwidth? But that's not what 360Networks and Global Crossing were telling me right before I bought their stock for outrageous prices. You don't mean that....no...they couldn't have...
    • The problem is not losing the bandwidth - the
      much greater problem is losing their peering
      entry points into other networks. If from Lubbock, instead of connecting to an Austin, TX site through Dallas, you had to connect on a
      pipe through LA, do you think that might be
      noticeable? I think it could...

      Losing a big chunk of the network is a big deal -
      just ask KPN/QWEST in Europe. I came into work
      this morning to find the peering points into
      AT in New York slammed as the transatlantic routes converged.

  • A nice resilience test (Score:5, Funny)

    by Aliks ( 530618 ) on Wednesday July 03, 2002 @07:25PM (#3818716)
    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!

    • Re:A nice resilience test (Score:5, Funny)

      by Hard_Code ( 49548 ) on Wednesday July 03, 2002 @10:07PM (#3819514)
      So, uh, does this mean communism actually won...?
      • No, it means capitalism lost :)

        • Re:A nice resilience test (Score:5, Insightful)

          by abreauj ( 49848 ) on Thursday July 04, 2002 @02:39AM (#3820632) Homepage
          No, it means capitalism lost :)

          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.

    • Given my choice between shutting down the net with thermonuclear war and a technical means, I'd go with the tech. Start by blackholing whatever core routing systems you can with BGP - that should break the net into hundreds of fragments. Then screw over the 14(?) root servers so that they lose their connections. Within 3 days, everything will die, and within minutes of killing the BGP setup, most everything will go. Granted many systems have filters in, but if you're in the right spot you can inject the appropriate messages.
  • 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?
  • 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.

  • Comment removed (Score:5, Interesting)

    by account_deleted ( 4530225 ) on Wednesday July 03, 2002 @07:28PM (#3818737)
    Comment removed based on user account deletion
    • 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?
      Then they just spam from overseas. If it were only that easy to stop spammers I would have bankrupted Worldcom myself years ago...
    • Who's to say that WorldCom might not aggressively sell "pink contracts" to raise cash flow? I doubt that UUNet will be sold, simply because the most likely buyers already have Internet backbone, and given the FCC's history with backbone mergers, (WorldCom-Sprint merger failed because the DOJ would block any merging of backbone ownership. MCI's backbone was sold prior to merging with WorldCom to satisy FCC and DOJ concerns.), such a deal would not go through. If WorldCom/UUNet can't raise peering charges, then look for them to sell bandwidth any way they can, because it's their greatest asset right now. Sale of MCI and UUNet will be last-resort efforts to save the corporation, because those are their best revenue sources.
    • Okay, if you were a reputable ISP, how would you go about shutting down spammers? It sounds really easy, but the point of a spammer is to circumvent policies put in place to stop him and put out a message to thousands of people who don't want to hear about it. No matter what you do, they will find a way around it, and as your anti-spam measures become more pro-active and draconian, your customers will start to lose their legitimate emails from their friends, and they will complain or simply quit and go somewhere else. The war against spam is a very difficult one to fight, and I was just wondering how you, or anyone else, would propose fighting it.
      • Comment removed based on user account deletion
        • A lot of those do seem pretty inconvenient, and if I was ISP hunting I wouldn't jump at the idea of signing up with one like that. I don't like step 4, as there is no assurance that the ISP will not then sell that information to shady characters, and I don't like step 6. What exactly would that block? Would that stop someone from having their own mail server? Why would you want to do that? In step 7, would that require that all email sent from an account such as Hotmail go through your servers as well? Because that would take a little longer for the customer and it sure wouldn't be fun for your servers. Not to mention the fact that MS might not be all too pleased with something like that. Step 2 could be modified such that the ISP actively searches for open relays and when one is found the owner of the system is contacted with a request to close said open relay within 3 days (and instructions as to how to do so, tailored for that specific situation), and if nothing is done within 3 days his/her connection should be shut down until such time as the open relay problem is fixed.

          So according to steps 1 and 5, you would fine the spammer literally thousands of dollars and then release his name to his "victims?" That seems just a little harsh. I mean, maybe give each victim a small part of the fine gained, or put the fine towards credits on the victim's account for more bandwidth, but you don't want to set up an environment where customers have an incentive to attack each other physically. You could, however, release that information to other ISPs, so they would know who to allow and not to allow to use their service, or at least to monitor their actions if they do sign up.

          You're right that that's a good start, but that's all it is. Spammers will still find some way to get around those and other methods of thwarting them. Also, unless the ISP to do this was very reputable and very large, and convinced the other big boys in the ISP business to cooperate, this plan could hardly be implemented. Imagine if AOL & MSN & all the others (I haven't been in the market for a really long time) got together and put a system like this into effect: then, and possibly only then, it would work.
          • Comment removed based on user account deletion
            • You put up a lot of things that you don't think would be inconvenient, but you don't actually know how the customers would react, so the convenient/inconvenient argument is pretty moot. More importantly, the steps you have put up were in the guise of some type of anti-spam handbook, for use by corporations and legislators, but the real idea behind your steps to a spam free life is to make the prospect of spamming unappealing, which would in turn essentially end spam. So in effect, it is not as direct as you have made it out to be. Spam can only be stopped once the spammers can no longer find a reason to do it, and your steps are designed simply to make spamming unattractive.

              Wouldn't you only be able to sue a spammer who is based in the same state as you are? The internet is a national/international entity, and I don't really see why Virginia state law should apply to the whole thing. In Virginia it might be illegal to drive over 75 MPH, but if you heard about someone doing 80 in Canada you wouldn't advocate arresting him, would you?
  • 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.

  • Don't even know what to say (Score:3, Insightful)

    by sam_handelman ( 519767 ) <samuel DOT handelman AT gmail DOT com> on Wednesday July 03, 2002 @07:32PM (#3818759) Journal
    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.
    • Well, maybe everyone is so tired of that new-wave stupid shit that they are resorting back to the good old fashioned stupid.

      I know I'm tired of the new-wave stupid.

      What?
    • I used to do support for a newspaper publisher; it was truly disheartening to see the levels of English decline even while I was working there.

      Most reporters are basically semi-literate, at best. Sub-editors usually have an excellent command of the language, and are the guys and gals who turn Reporterlish into English; sadly, most news companies view reporters, subs, and photographers as a waste of money, preferring to syndicate content from the wire services, have a bare minimum of staff to lay the paper out and write a few stories, and bulk up the advertising departments.

      So yes, proofing is a lost art; researching and writing stories is becoming one; the boom is in advertising copy.
  • 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.

  • Pulling off generalities (Score:3, Insightful)

    by astinus ( 560894 ) on Wednesday July 03, 2002 @07:39PM (#3818789) Homepage Journal
    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. . .

  • It will all be fine. (Score:4, Funny)

    by cca93014 ( 466820 ) on Wednesday July 03, 2002 @07:40PM (#3818792) Homepage
    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.
  • 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 [washtimes.com]

  • Nothing's going to happen - here's why: (Score:5, Informative)

    by seigniory ( 89942 ) <bigfriggin@@@me...com> on Wednesday July 03, 2002 @07:45PM (#3818817)
    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.
    • 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.

      Ooo! A telecom business with hundreds of milions in debt that has been losing money for a long time now? I'll buy one! No, make it two!!
    • I agree with your overall assessment, but have a cavil. You state that
      3. The current CEO [John Sidgemore] 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.

      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.

  • Keep on running (Score:4, Insightful)

    by ziegast ( 168305 ) on Wednesday July 03, 2002 @07:46PM (#3818825) Homepage
    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)
    • His use of the term corporate shell was quite interesting, making corporations seem to be fictional entities surrounding a service.

      I took that as a little peek into his perspective. A corporation is an entity that would not exist except that the charter is granted by the government. Without a corporation, all businesses would be privately owned sole proprietarships or partnerships, with the stockholders (owners and partners) taking share in the liabilities of the company.

      So, from a government buereaucrat's perspective, a corporation *is* a little piece of government sanction, recognition, and protection around a business.

  • Today's outage. (Score:3, Informative)

    by macdaddy357 ( 582412 ) <macdaddy357@hotmail.com> on Wednesday July 03, 2002 @07:48PM (#3818832)
    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?
  • 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.

    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 /. 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.

    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
  • WorldCom (via UUNet) handles 50% of US internet traffic

    yeah, but if they would only enforce [spamhaus.org] their acceptable use policy [worldcom.com], the amount of traffic would only be 10%... ; )

  • great, let them be bought out by someone who can (Score:3, Insightful)

    by Brigadier ( 12956 ) on Wednesday July 03, 2002 @08:05PM (#3818926)


    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.
    • 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...

  • It's not that bad. (Score:3, Insightful)

    by Above ( 100351 ) on Wednesday July 03, 2002 @08:06PM (#3818928)

    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.

  • uunets significance to the internet (Score:5, Interesting)

    by mdouglas ( 139166 ) on Wednesday July 03, 2002 @08:10PM (#3818947) Homepage
    this is a map [caida.org] 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.
  • Monday I got a call from MCI wanting me to change my long distance. I guess their still trying to get customers.
  • Comment removed based on user account deletion

  • It's a bad thing™ that we even have to worry (Score:5, Interesting)

    by Sarcasmooo! ( 267601 ) on Wednesday July 03, 2002 @08:28PM (#3819034)
    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'.
    • 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-

  • Bankruptcy certain? (Score:5, Insightful)

    by EastCoastSurfer ( 310758 ) on Wednesday July 03, 2002 @08:30PM (#3819044)
    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.

    • Re:Bankruptcy certain? (Score:5, Insightful)

      by Above ( 100351 ) on Wednesday July 03, 2002 @10:20PM (#3819565)

      WCOME has bonds, like all companies do. There is a particularly interesting set, I believe valued around 2.5 Billion that come due in January or Feburary.

      They had been trying to work a plan already this year to borrow 5 Billion, and turn around and use that to pay the 2.5 Billion back, and have 2.5 Billion in new cash. The banks weren't buying it though, and no one was loaning them money. At this particular moment, the chance of them borrowing another 2.5 Billion (to pay back the bonds) is about zero, and if they don't the creditors will almost definately force them into bankruptcy.

      Now, they have some time to sort things out and get new financing in place. The only other wrinkle is that this fraud puts them in default on pretty much all of the rest of their 30 Billion in bonds. No one has demanded accelerated repayment yet, but that is within their rights.

      So, for the next 6 months they have to convince everyone they owe money to that they are going to be able to pay it all back, or file (because if they don't the creditors would file for them). If they manage to walk that tightrope early next year they must then get (probably from the same people) a new loan for 2.5 Billion, or sell off enough assets to raise 2.5 Billion to just pay it outright.

      This is but the tip of the iceberg of their financial woes though. There are hundreds of other problems. It is going to be extremely hard for them to avoid Chatper 11. Perhaps a in a a thousand shot right now.

      Most importantly, a CEO will always say they are not going to go bankrupt. If they said they were before they filed all sorts of bad things would happen (creditors taking stuff before the filing, for one), so that's not an option. That will be the trumpet they carry until the chapter 11 press release.

      • If they manage to walk that tightrope early next year they must then get (probably from the same people) a new loan for 2.5 Billion, or sell off enough assets to raise 2.5 Billion to just pay it outright.

        The people who will loan them the money are really the pivotal figures in this equation. Since the creditors are already into WCOME for quite a bit, they may give them another 5B with the hopes that they can get out later with less of a loss. It is all going to depend on how much sweet talking the WCOME CEO can do, and if he can come up with a convincing plan to recovery(sell some divisons, etc...)

        It is going to be extremely hard for them to avoid Chatper 11.

        I agree in the long term. I just don't think they are going to be filing next week (hence the FUD comment :)
    • ... their stock to triple throughout the day (from .07 - .22)

      Hell yeah, and I rode that sucker. A thousand shares for $70? Thank you, media frenzy!

  • Worldcom owns OzEmail a huge Australian ISP (Score:5, Interesting)

    by galaga79 ( 307346 ) on Wednesday July 03, 2002 @08:50PM (#3819109) Homepage
    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 [theage.com.au] and this link [news.com.au].
  • Considering we are right in the middle of connecting a T1 through UUNET.
  • Coincidentally Vint Cerf [isoc.org], currently the ICANN [icann.org] Board of Directors chairman, is a WorldCom Vice President [worldcom.com].
  • I'm surprised that this didn't have its own Slashdot story. But Ebone has shut down. [save-ebone.com] The Ebone sites are dead, and the employee site has a sad message.
  • With MFN and Global Crossing and KNPQwest and (soon) Worldcom in bankruptcy, we may have some real problems. Physical shutdowns do happen; EBone shut down yesterday. There's the very real possibility that major sites with redundant connections might lose all of them.

    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.
  • 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 ...

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