re: combining powers, bandwidth glut, old rights of way, abandoned routes
Stephen, if you knew the genesis of MFN (when it was National Fiber Networks, or NFN, prior to its being granted a frachise in '93) and the philosophical views they promoted vis a vis those of some of the current management in GBLX, you would see an irony of the latter acquiring the former. Today, many of these differences still exist. Namely, selling dark fiber versus selling packaged services. But the possibility which you raised does exist. However, it would be good to assess some of the asset overlaps, as well as their primary differences, as things stand right now:
- Most significantly in the 'net space, FRO's GC vs MFN's Above.net;
- MFN's Metro builds vs Telergy's Metro builds, with whom GBLX has cut a deal;
- One sells dark fiber to enterprise customers, and the other does not;
- egos.
And not necessarily in that order. Nevertheless, I would not write off the possibility of a takeout, not just yet. Besides, the assets I've mentioned above are combinable, albeit with some tensions. Ask Bernie Ebbers, if you want to know how this is done.
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The bandwidth glut you mentioned is still an issue among analysts and in the press. There's no shortage of pundits and journos who've paid last month's rent with the proceeds they've earned writing about this subject.
I listened to INAP's Naughtin this morning (see a subsequent post re: INAP's plans and some of the possible implications of same), who stated that the last thing the world needs now is another backbone provider.
My view of the glut issue is this. It doesn't exist. And depending on who you ask in the future --a determining factor being, where one finds themself in the food chain at that time-- it may never exist. For those in the future who will be trying to make a buck out by selling bandwidth alone, and who have nothing else to offer, they will cry glut and possibly seek injunctive relief through some means. [This calls to mind the current monopoly status enjoyed by today's ILECs and cable TV operators.]
On the other hand, those who have a plethora of value adds on their menus will go on to prosper, or, they at the very least will have earned the right to compete.
What some folks have confused as a glut is actually the misplacement of supply. These are redundant routes which have been implemented by some firms who will be taken out or go out of business at some point, not due to lack of demand for bandwidth, but because they will succumb to competitors who have placed bandwidth on the same routes, and who can sustain longer periods of loss-leading than their smaller rivals, before they eventually go ebitda positive.
Many of these routes which are taken over through the competitive process will be assessed for their technical merit and reused, possibly, or rehabilitated, or, if they are deemed to be beyond salvage, they will be abandoned.
In any event, the new owners will reuse the old rights of way which facilitated those cable routes in the past (and this holds true for wireless towers and rights of way, as well), just like MCI eventually took over Western Union's in-ground and microwave terrestrial rights of way, over ten years ago. Today, we know most of these older WU Telegraph routes as MCI Metro, supporting fiber optic transmission for large enterprises and other carriers.
Some bandwidth supplies can be viewed as ill-timed or misplaced by some operators, who will either be supplanted by more competitive parallel routes due to the characteristics of competition, not demand, or these operators will grow to live in a competitive mode, side by side for some time. These collateral existence possibilities may come about with the implementation of third and fourth wires into the home at some point, say, if power utilities or independent national-level fiber overlays ever become a reality in the residential space. Comments welcome.
Regards, Frank Coluccio |
