Summary:

WorldCom Aftermath:: If you recall all the problems that followed in the wake of KPNQwest bankruptcy, wait till the big bully hits the dirt. Probe reseach of Cedar Hills, NJ believes that with WorldCom, Global Crossing, Qwest and many others § created the disaster it is […]

WorldCom Aftermath:: If you recall all the problems that followed in the wake of KPNQwest bankruptcy, wait till the big bully hits the dirt. Probe reseach of Cedar Hills, NJ believes that with WorldCom, Global Crossing, Qwest and many others § created the disaster it is in, a disaster driven by greed, by an unwillingness to confront business reality and by an almost religious belief that technology has forged a new economy.

Chapter 11 is decidedly “old economy” but is the likely refuge of many “new economy” firms that simply dismiss standard rules of basic economics. WorldCom is, basically, getting what it deserves; unfortunately, thousands of people will lose their jobs and suffer hardships because the leadership of WorldCom destroyed the company.”

For the Internet this is a very serious crisis. The future of the UUNET operation at WorldCom needs to be decided § and quickly. UUNET is the largest player in the core of the Internet, and it is now financially § and will soon be operationally § unstable. WorldCom will lay off 17,000 workers; others will leave for better employment security; capex will be cut even further; needed upgrades will be pushed off into the distant future; maintenance will be curtailed; customers will leave and a vital element of the Internet may be in mortal danger. UUNET will undoubtedly be affected.

Tumolillo suggests that the future of the Internet will be decidedly different if UUNET falls to one of the big RBOCs or if it goes to one of the surviving IXCs (AT&T or Sprint). The RBOCs act differently than most other carriers: they buy slowly, they buy standardized equipment, they seek reliability and they seek price stability. The world will be different if an SBC or Verizon runs UUNET than if AT&T or Sprint runs UUNET. But this much is clear: there are a few paths to the future, and one goes through the RBOCs, another through AT&T, another through Sprint.

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