Telecommunications Design & Analysis

November, 1999

If the intended merger of MCI WorldCom and Sprint Communications is approved, there will be only two interstate carriers, AT&T and WorldCom, that own fiber optic networks covering the entire country.

MCI customers report disarray in service and support following the MCI and WorldCom merger. More of the same may occur if the WorldCom Sprint merger takes place.

What are alternatives for interstate voice and data communications?

Qwest Communications, Global Crossing (formerly Frontier Corporation) and Cable & Wireless USA are all building nationwide and international fiber optic networks. Moreover, they have all made acquisitions to fill in holes in their product offerings. They sell primarily to small and medium sized businesses. Qwest also sells wholesale capacity to other carriers.

How are Sprint, AT&T and MCI WorldCom different than Qwest, Global Crossing and Cable & Wireless?

Qwest, Global Crossing and Cable & Wireless have fiber in place, but not to the same extent as AT&T, Sprint and MCI WorldCom. For example, Qwest carries calls on its own fiber where it's available. In parts of New York State where it has no fiber, it leases fiber from MCI WorldCom. When MCI had a fiber cut last year, Qwest service was also lost. Sprint, WorldCom and AT&T also have more extensive frame relay networks and toll free services.

Cable & Wireless USA

Cable & Wireless has 3% of the business long distance market. Moreover, they own a large Internet backbone network that was established in 1995. The network carries the second largest amount of Internet traffic next to WorldCom. Cable & Wireless purchased MCI's Internet backbone when MCI merged with WorldCom.

Cable & Wireless has over 100 sales and operations offices in the United States. One of the features of their billing is that they offer bills for consulting companies already marked up to be passed to clients.

Qwest Communications

Qwest is building its own fiber network, in Europe, Mexico and the United States. It is currently in 160 cities. Some of their retail products were originally tariffed by LCI, the large reseller Qwest acquired last year. In addition, Qwest recently announced their purchase of US West.

Qwest claims that their fiber network has the same total capacity as AT&T and MCI WorldCom because of it's advanced technology.

Global Crossing

Global Crossing's purchase of Frontier was finalized this month. It is the fifth largest long distance company in the United States. They have strong Internet hosting capabilities through Frontier's purchase of GlobalCenter.

Global Crossing is focusing on building fiber optic rings in metropolitan areas for local service. In Massachusetts they use their partner, utility Neescom's fiber rings in Worcester and along Route 495. Customers in these locations are offered a T-1 line for local, Internet and long distance service that bypasses Bell Atlantic.

Strategies

Smaller carriers are a viable option for small and medium sized companies who want a choice of more than two long distance carriers. Technical advancements in fiber optics, fast routers and lower cost switches are lowering the cost for carriers to build their own fiber optic networks or lease capacity on other networks.

David Warsh, a columnist with The Boston Globe, wrote a glowing article about of my book, "The Essential Guide to Telecommunications". Please let me know if you would like to see the article.

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