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Technology Stocks : Discuss Year 2000 Issues

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To: John Mansfield who wrote (3040)12/26/1998 5:12:00 AM
From: John Mansfield  Read Replies (2) of 9818
 
' AT&T disconnects vintage net service

'From:
Ralph Daugherty <ralph@ee.net>
vr 21:35

Subject:
AT&T disconnects vintage net service

I ran across something interesting in the Dec. 7 Federal Computer Week
paper edition. The article is at:

AT&T disconnects vintage net service
www.fcw.com/pubs/fcw/1998/1207/fcw-polatt-12-7-98.html

I've read about X.25 for a number of years and know enough from what I've
read that it was a heavily used communications protocol. So when I read:

'AT&T officials told agencies last month that the company will no longer
offer a 20-year-old packet-switching telecommunications service to federal
users of the FTS 2000 contract and will not upgrade the existing service for
Year 2000 compliance.'

'A spokeswoman for AT&T Government Markets said the company was "never a
dominant player" in the X.25 market, and it has decided to stop offering the
service. She said AT&T will instead offer federal X.25 users incentives to
switch to its frame relay service or its Off-Site Access to Servers and
Intranet Solutions (OASIS) package for high-speed access to agency local-area
network resources.'

'Agencies using AT&T's X.25 service will have to switch within a year
because the service will no longer operate after 2000. "We are not using that
platform anymore, so obviously there is no point in upgrading for Year 2000
compliance," the spokeswoman said.'

I couldn't quite decide whether AT&T was using Y2K as an excuse to drop a
communications service in which it was not competitive and try to move
customers to a frame-relay service in which it might have an advantage. I
thought it odd that AT&T's X.25 communications had a Y2K problem severe enough
to cause AT&T to dump it rather than fix it. Or was it just a ploy? Reading
on, I was shocked to see:

'Jim Payne, Sprint's assistant vice president for FTS 2000, said the
government operates X.25 installations mostly in areas in which digital
facilities are unavailable. "These agencies have had the rug pulled out from
under them," Payne said. "We think we are going to book every piece of
business that AT&T has left on the floor. We are supporting X.25 through the
Year 2000 and beyond."'

'Arnold Bresnick, associate chief information officer for policy at the
USDA, said his agency runs more than 1,000 X.25 circuits throughout all its
bureaus and offices. "Clearly it's a concern because it forces us to decide
on alternative means of service and to develop a time line for that," Bresnick
said of AT&T's announcement. "This doesn't strike me as an emergency, but we
are proceeding with all due speed."'

'X.25 will be a mandatory service on FTS 2001, the follow-on to the
existing contracts that is scheduled to be awarded later this month, Toker
said. AT&T will have to offer the service -- apparently through a
subcontractor -- if it wins an FTS 2001 contract. Bresnick said he has not yet
decided how the USDA should respond to AT&T's announcement. He said it may
behoove the agency to wait and see the results of the FTS 2001 contract
awards.'

"It's a little puzzling at this point because even though AT&T is saying
they are pulling out of X.25, it is a mandatory requirement in FTS 2001,"
Bresnick said. "If AT&T is a viable bidder, then it will have to provide X.25
service. So I think it's premature to take any action."

Not only was AT&T leaving Federal agencies such as the Coast Guard, the
National Oceanic and Atmospheric Administration, the Agriculture Department
and the Environmental Protection Agency in the lurch, with its competitor
Sprint only too happy to pick up the business, but AT&T was discontinuing a
service that is a required capability for a multi-billion dollar contract it
was bidding on against Sprint and MCI. And I was not the only one puzzled.
So was the CIO of the Agriculture Department.

Then the first ramification of AT&T dropping X.25 rather than remediate it
for Y2K:

Sprint wins FTS 2001, Part 1
www.fcw.com/pubs/fcw/1998/1221/fcw-newssprint-12-21-98.html

'The General Services Administration on Friday awarded Sprint the first of
two contracts under the $5 billion FTS 2001 program, a move likely to reduce
prices and shift many agencies to new providers.'

'GSA will award a second contract by mid-January, Fischer said. Both
contracts carry a minimum revenue guarantee of $750 million. Sprint, along
with AT&T, was an incumbent on FTS 2000. Sources said Sprint beat out AT&T and
MCI for the first FTS 2001 contract.'

'Industry analysts and sources called GSA's selection of Sprint as the
Round One winner a real setback for AT&T, which handles 76 percent of the
traffic on FTS 2000. An industry executive intimately familiar with AT&T
Government Markets called the Sprint award "absolutely devastating to AT&T.''

'Former FTS Commissioner Bob Woods, now president of Federal Sources Inc.,
said, "AT&T is obviously going to lose business" as a result of the award to
Sprint.'

'Fischer said the award was a best-value selection based on price and on
Sprint's superior technical approach, the strength of its team, its billing
system and other considerations.'

Could we read "Sprint's superior technical approach and other
considerations" as Sprint's ability to support X.25 service in the year 2000
while AT&T has chosen not to? AT&T risked a $5 billion contract, which it had
previously held 76% of the business, by dropping the X.25 communications
service which was a requirement in the contract. They lost Part 1 of the
contract and left Federal agencies puzzled and scrambling to switch their X.25
service to Sprint even before the new contract was awarded to Sprint. All
because they couldn't cope with making their X.25 communications service Y2K
compliant. And they paid the price within two weeks of making the
announcement.

Ralph
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