The Phantoms' WUCEH TRADER (tm)
June 19, 1997
It's difficult to get started after returning late last night from a trip to Atlanta. Not so much from the standpoint of being travel weary, but from the standpoint that I feel like I left half my brain planted in the Georgia clay.
Where do I start?
As most of "you'all" know, I went to Atlanta to check out the Internet Passport division of Franklin (FTEL) and to meet with crew down there.
Both my wife and I visited IP's office in Sandy Springs, a northern suburb of Atlanta just outside the perimeter 285 highway that rings Atlanta. We arrived about 10:00 AM Monday morning at the stucco Georgian style building just off Roswell Rd and proceeded to the second floor. The building was deceiving from the outside, as it was sectioned off into four equal quadrants, two offices to each floor, the entire building looked to be about a 6000 to 8000 sq. ft.
As we entered the reception area, the office seemed deserted at first. Seems we had arrived just as they were breaking up a staff meeting. Couldn't have been better timing, as it allowed us the opportunity to meet the entire staff (6) except for the receptionist, whom we were told, was off for the day.
We sat down with Sparrow, and soon we were involved in a informative discussion regarding her recent trip to California. As she spoke you could tell that there was 140+ plus watts running behind those eyes. Sparrow is extremely personable, quick witted and knows her way around tech terms and also has a solid grasp of the telecommunications industry, both present and future.
As I started to become more pointed in my questioning of some of the recent news releases that involved IP, more precisely the DigitalXpress venture, she became somewhat evasive.
At first I thought, here we go.
But she sensed my uneasiness and explained that seeing is believing, after all a picture tells a thousand words. At that point she introduced us to Reggie, the systems engineer and recommended that we meet with Reggie over at the other facility and see the equipment. Then we could meet with her later in the afternoon, as she had to prepare for a meeting. Sparrow told us that once Reggie explained the operations side of the setup, we would then be better prepared to discuss the intricacies of the DigitalXpress deal.
We left and followed the directions that Reggie gave us, and before long we at "The Vinings" area of Atlanta, 10 to 15 minutes away. As we exited the freeway (285) you realized you have entered the world of the original "high rent district."
Both my wife and I lived in Atlanta back in the middle 80's and if you have ever been to Atlanta, you don't forget W. Paces Ferry Rd., after all the Governor's mansion looks like servant quarters next to some of these estates.
Well you can call me Corrigan, as in "Wrong Way Corrigan" seems I took a wrong turn and should have been headed towards the Vinings rather than Buckhead. Soon that was corrected and we came to The OVERLOOK office complex, IP was located in OVERLOOK II.
What I was about to witness, I wasn't prepared for, in more ways then one.
First off, I parked in front of a rose granite and glass 20 story building, that is just absolutely beautiful. We exited the elevator on the 5th floor and there were only two suites on the entire floor. Suite 500 and suite 550. As I peered to the left, I saw 550, that half of the floor belonged to Motorola. Nice company to keep. As I turned to my right I see Suite 500, that's funny, that is the the correct suite # that is written on my directions, but the sign says Charter Communications. Ah, but there was Reggie, all grins as he recognized the confused look on both our faces.
What the hell is this all about, I thought?
Impressive, very impressive to say the least. As we entered the lobby, we're looking through a glass walled conference room, in session, and viewing downtown Atlanta off in the distance.
Reggie then said, "follow me."
We walked through a few doors and entered a room I wasn't prepared to see. We had entered a clean room, the likes of which I haven't seen since my days with ITT.
I'm not talking ISP equipment, I'm talking telco equipment, bays upon bays of telco equipment.
Reggie was smiling from ear to ear. I couldn't hide my amazement, this was well beyond my wildest imagination. Even my wife was nudging me, questioning what this place was, afterall this isn't Franklin's stuff is it?
Let's stop right here. If you're interested in telco equipment or state of the art ISP gizmo's, let me tell you, you have just entered communications Nirvana. Imagine a 450,000 BTU self contained air conditioning unit to help you keep your cool, and a UPS (un-interrupted power supply) the size of van in case you blew a circuit.
As I'm shaking my head, Reggie explains that all this isn't ours. Only this one bank of equipment bay's, (about 1/6th of all the bays), is ours, in this massive 40'x40' room.
Before we go any further, wipe any imaginative picture that you have painted of what an ISP is supposed to look like from your brain. What I'm looking at isn't PC's and racks of modems, no not at all, nothing like that, not even close.
What I was looking at is 7 foot tall, self contained cabinets, with rack mounted Firewall, Digital Alpha Servers, digital switching equipment, Cisco Routers the size of large breadboxes. I'm talking the big stuff, Model 7505 Cisco Routers, I think it is the next to largest routers that Cisco makes (7515) and a ton of other flashing, buzzing, blinking equipment that looked like it had enough voltage going through it to light up downtown.
Well all this equipment is impressive, that's for sure. But let's face it, anyone with enough money can buy it, even though not everyone can put it together.
I mention to Reggie that this is an awesome display of equipment, and he agrees, but then says that the real importance of what I'm looking at is not the equipment, but these few cables that he's pointing to. "That my friend, money can't buy, and that is what separates us from all the rest, all the wannabes."
You remember in the beginning I mentioned Charter Communications, well that in it self is a worthy asset. That relationship alone uniquely positions us with an edge. Both technologically and economically.
But it goes a lot further than just an alliance with Charter, it also has to do with the physical proximity to two other priceless assets, they too are alliances. One is above us (Wiltel) and one is below us (Metro Fiber Systems (MFS)) both Worldcomm companies, and both physcally in the same building, and we are all hooked together, physically via cable. You guessed it, the two cables Reggie is pointing to. And as Reggie stated earlier, that you can't buy, not at any price.
Nor can you buy the access to other satellite systems in other hemispheres, or direct long distance to South America, Central America, or Lord only knows where else.
When Frank negotiated the purchase of Internet Passport, we the shareholders got something that $20 million couldn't buy, unprecedented access, and alliances that aren't available today at any price. (Remember the peering arrangements) We have reciprocal arrangements that place us in a enviable position.
Now, if that isn't enough, let me tell you about something else we got in the IP deal. I had mentioned it before, but I don't think I could have put enough emphasis on it, and that's the personnel that came with the IP deal.
Sparrow has got be a Godsend to Frank and Franklin. She brings with her the experience and marketing ability that Franklin so sorely needed. An understanding of the communications industry that blends well with Franks vision. But most of all she brings a "real world" understanding of implementation and the know how to make it all happen. She's a fireball, and I don't think you can qualify in monetary terms what she is worth to Franklin and to Frank in being able to take on the load.
Then there is Louis, a bright, personable, and energetic executive type, that comes to Franklin with a lot of experience in running his own company prior to joining IP. He is well rounded with a lot of contacts in high places, and has multitude of connections in the entertainment arena.
I really didn't get to spend enough time with some of the others, but they acted very professional and were very business like.
What I do want to key in on, is Reggie.
Reggie, HE IS THE MAN. I mean that wholeheartedly.
You can't buy a Reggie, you can't invent a Reggie, and in a lifetime you couldn't ever match or find a Reggie, he is "the man." MR. COMMUNCATIONS personified. If Frank is the "Wizard of Westlake" then Reggie is the high priest, Rasputin, and a communications demi-god, all in one. He was a head systems engineer for MCI, among other things, but also was commissioned by the Russian government to help design their communications system after the breakup of the Soviet Union. I mentioned my being impressed by Reggie to Sparrow when we returned and she lite up, all she could say was that she was extremely lucky to have latched on to him.
I don't mean to rant, but when it comes to Reggie, I can't even begin to do him justice.
I'm no Einstein, but I know my way around equipment and Reggie showed us some tricks that he was using regarding security issues that were special. It was no wonder that Ceridian, a securtiy consious company was impressed.
Speaking of Ceridian, he said that the beta was going great, that it has been functional for weeks now.
You could tell that Reggie not only knew his way around, but that he was beaming with pride, he hadn't created just an ISP/Satellite connection, he had created a masterpiece, a state of the art system. A combination of equipment, access, and ingenuity that was a special blend that made Franklin a special carrier. He even said that what they have in Atlanta couldn't be matched, at any price. As Reggie said, "Franklin has capabilities that are unique, and will not be easy to duplicate, if at all."
Really?
Really!!!
That is where he drew the line, and said that there are several things on the drawing board that he couldn't discuss, but when ever the unnamed parties were ready to light up the boards, he was ready, just waiting on them.
Both my wife and I left that building with our heads reeling. Like she said,
"I don't know just what exactly I saw in there, but what ever it was, it impressed me, and as for Reggie, all I can say is "incredible." He's the plum.
I agree, I saw more then I ever expected, and I too was impressed with the entire crew. They are business, from top to bottom, and Reggie is an extraordinary asset.
We arrived back at the offices and Sparrow was just coming out of another meeting with a visitor. At that point I felt it would be redundant to go over what Reggie had just explained regarding the DigitalXpress deal. What I wanted to know was where we were going and how long would it take to get there.
Sparrow is very down to earth, no punches, no holds barred, she looks you square in the eye and tells you not what you want to hear, but rather, just the way it is.
She was the first to admit that they were running around like chicken's with their heads cut off. That everything is coming at them so fast and from every direction. She quickly pointed out that in many instances they are ready to go on several fronts and are just waiting on the other side of a deal or a venture partner to complete their end of the bargain. In other cases she said they were behind, that some things are moving slowly due to some unforeseen glitch, a bad part, or a sourcing problem. That they had hoped to have more people trained, and could honestly use more heads right now.
She explained that Frank is dancing at the speed of light, and is over burdened with how fast everything is moving. Neil, Alan, and herself are trying to take on most of the day to day stuff and let Frank handle the major projects and daily negotiations.
She stated that it was a mixed bag as far as the corporate schedule, that ironically many of the tough things were ahead of schedule, but it was the small stuff, the slightest of details that were the aggravations that drove them crazy.
She also mentioned the S-1, and how it couldn't have come at a worse time. That it was disruptive and took away a lot of man hours that could have been put to better use. But Frank and Tom are committed to seeing it through, that it was a necessary evil, just poor timing.
I asked if she could predict when we might see some major events take place. She stated that there was a long list of things that she could qualify as major projects, and that I had to understand that if I asked Frank I might get a different answer.
I laughed and asked why?
She too grinned, and said that she sometimes places a higher degree of importance on some things then Frank does, and vis a vis. So I pushed a little more and she said that several projects are scheduled to start hitting throughout the summer, and any of several pending projects could be approved at any time. I asked what she meant by that. She said that what most people don't understand is that many companies have come to them with all kinds of projects. Some are worth while, some don't even get considered, some they have to bid on, or submit rough designs or even implement a working model, and all this takes time and a lot of effort. She stated that there are several such projects underway at this time.
I asked if the end of summer would be a reasonable time to expect any significant business to be on the books. She raised her eyebrow and said there was already some business she would consider significant that was being realized already, especially in hardware. She went on to say, there has been a resurgence of interest in some older hardware that is being used for new applications. Then added, the best part is that they are at extremely high profit margins. Then continued to say that many of the new hardware items are about ready to be launched any day now, emphasizing the Cyclone was now ready, and they also have a sizable waiting list of clients.
I finished by asking Sparrow what she thought of the current stock price, and at what price she thought it should be?
Her closing comment was, "I sold out to Franklin when the stock price was a lot higher, almost $5, about double what it is today, I don't even think about it. I know where we are going with this venture and I'm more then happy with the way things are shaping up."
Well, there you have it. There is a real company in Westlake, and a very real presence in Atlanta, we have some extraordinary key people, and alliances that can't be bought for any price.
Are we going to be rich tomorrow? No I doubt it will be tomorrow. But I will say is this, I am confident that we have a very viable company that has all the pieces in place to make it a success. I may not be Alexander Graham Bell, but I know the real McCoy when I see it, and what I saw in Atlanta is far more then I ever expected. FTEL is not an ISP, but a TELCO company in the making, and set up to do business as a 21st century satellite Communications Company.
One last thought in closing. What better confidence builder then to hear an insider say that they are not concerned about the price. Sparrow basically bought the stock at $5, and she isn't concerned at all about the day to day prices. She is looking for multiples on her investment, and is working her butt off to make it happen.
Now that alone made the trip worthwhile. It looks to me as though all systems are go.
Raleigh
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