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To: JM who wrote (4883)8/14/1999 12:08:00 PM
From: Rick Escher  Read Replies (1) | Respond to of 11568
 
This was posted on the SI's NN thread.

Regards,
Rick
========

CBOT'S LETTER TO MCI WORLDCOM RELATING TO PROJECT A TRADING

cbot.com

The following is a reformatted version of the full text of a letter from CBOT Chairman and CEO Thomas R. Donovan to MCI WorldCom CEO Bernard Ebbers relating to the ongoing MCI WorldCom problems and their effect on Project A trading.) Following is the full text of a letter from CBOT Chairman and CEO Thomas R. Donovan to MCI WorldCom CEO Bernard Ebbers relating to the ongoing MCI WorldCom problems and their effect on Project A trading.

August 13, 1999
Mr. Bernard J. Ebbers
Chief Executive Officer
MCI WorldCom
500 Clinton Center Drive
Clinton, MO 39056

Dear Mr. Ebbers:

Due to MCI WorldCom's recurring inability to provide dependable, stable network services, the Chicago Board of Trade has been forced, yet again, to suspend trading today on our electronic trading platform, Project A®. This follows on the heels of repeated Project A trading halts during the past week as a direct result of MCI WorldCom's catastrophic service disruptions which have deprived large segments of our market users of access to Project A through their trading terminals on the system's wide area network. All told, our Project A markets have been down over 60% of the time since Project A's scheduled Thursday evening trading session last week, exposing our members and their customers to market risk and depriving them of significant trading and revenue opportunities. The CBOT has also experienced a sizable loss of transaction fee revenues.

The CBOT is the world's preeminent futures exchange, with a hard-earned and well-deserved reputation for providing highly reliable, efficient and liquid markets virtually around the clock, both electronically and via open outcry. MCI WorldCom's repeated inability to meet our standards for performance has tarnished the CBOT's 151-year reputation as a provider of dependable and reliable market facilities.

The Project A trading outages are of grave concern not only to our market users, but also to our federal regulator, the Commodity Futures Trading Commission, and to the Department of Treasury. We have been in constant communication with the CFTC over the past week to keep them apprised of the problem and the status of MCI WorldCom's efforts to restore stabilized network service. The CFTC, in turn, has been in communication with the Department of Treasury to address its concerns with the implications of the chronic Project A market disruptions to the CBOT's Treasury futures and options complex, which we offer on Project A as well as by open outcry.

As a result of MCI WorldCom's hollow assurances that it has corrected the problem, we were led to believe it would not be necessary to implement a back-up contingency plan that we have developed. In light of MCI WorldCom's persistent failure to determine and correct the problem, we are forced to implement that contingency plan beginning with the Project A trading session that begins 6:00 p.m. (Chicago time) on Sunday, August 15. Under this contingency plan, many of our members will have to move or duplicate their Project A operations and staffing to back-up locations within the CBOT building, with the costs that will entail and at great inconvenience and disruption to their normal business operations.

This recurring MCI WorldCom failure is unacceptable. CBOT members and market users demand and deserve world-class technology and service, and we are receiving neither from MCI WorldCom. Market users worldwide depend on Project A around the clock, and MCI WorldCom has let them down for one full week. As a result of MCI WorldCom's failure to deliver on their promises to me early last week, the CBOT is pursuing all available remedies. We have lost all confidence in MCI WorldCom's ability to provide reliable service. We await your immediate response as to the measures you intend to take to restore that confidence.

Very truly yours,

Thomas R. Donovan



To: JM who wrote (4883)8/15/1999 1:31:00 AM
From: Tunica Albuginea  Respond to of 11568
 
Rpbert Sheldon: From CBS Marketwatch:MCI WorldCom takes data network offline:

TA

cbs.marketwatch.com

MCI WorldCom takes data network offline

By Jeffry Bartash, CBS MarketWatch
Last Update: 2:01 PM ET Aug 14, 1999
NewsWatch
Earnings Surprises

CLINTON, Miss. (CBS.MW) -- MCI WorldCom took its troubled
frame-relay data network offline Saturday in an attempt to fix problems
that have plagued the high-speed service for more than a week.

MCI WorldCom customers, including America Online and other Internet
service providers, experienced disruptions as a result of the shutdown.

"Some customers of some Internet Service Providers will not be able to
connect to their service through their regular local access numbers," MCI
WorldCom said in a statement announcing the move. The company
apologized to its customers for the problems, which began more than a
week ago.

The service disruption will last about 24 hours, the company said.

America Online said as many as 2 million subscribers to its AOL and
CompuServe services could be affected. Most affected customers will
have to dial in on a different access number, said Andrew Weinstein, a
spokesman for the Dulles, Va.-based online service.

Members "might have difficulty using their normal access number,"
Weinsten said.

Software glitch

MCI WorldCom's problems, attributed to software supplied by Lucent
Technologies, have intermittently slowed or cut off access to the Internet,
knocked out some bank ATMs and hampered operations of financial
markets for more than a week.

"Up to this point we still dont have full information" about the cause, said
MCI spokeswoman Linda Laughlin. "Obviously we apologize to our
customers," she said.

The failures have affected as much as 15 percent of MCI WorldCom's
network.

Customers are not happy with the outages.

Chicago Board of Trade Chief Executive Thomas R. Donovan, in a
blistering letter to MCI WorldCom, wrote: "This recurring MCI
WorldCom failure is unacceptable. CBOT members and market users
demand and deserve world-class technology and service, and we are
receiving neither from MCI WorldCom."

The CBOT's global electronic trading network was knocked out from
Thursday, Aug 6 to Tuesday, Aug. 10, then experienced a three-hour
outage on Wednesday and was knocked out again Friday. It reportedly
will remain shut until Sunday night.

"We were told the problems would stop and service would actually get
better," said CBOT spokeswoman Katherine Spring. "People are so
frustrated." She said the exchange would review all its alternatives, hinting
at possible legal action. The board has lost lots of business, she said.

In the meantime, the CBOT is relying on an internal network and dial-up
access outside the board's headquarters so users can get access to
electronic trading. The board, of course, has also had to contend this
week with problems facing its electric utility, Commonwealth Edison. See
related story.

Network disconnected

The disruptions raise questions about the reliability of networks at the
heart of the so-called Information Age, particularly those involving new
types of data switching.

MCI WorldCom (WCOM: news, msgs) is one of the biggest data
traffickers in the world, serving governments, corporations and consumers
in 65 countries. It's the second-largest U.S. long-distance provider,
behind only AT&T (T: news, msgs), and its UUNet subsidiary has 70,000
business customers in Asia, Europe and North America. When MCI
WorldCom has trouble, so do many others.

MCI WorldCom's network was built up in part by acquisitions, which tied
together disparate software, equipment and technologies. While the
carrier is trying to make its network more uniform, it's also been
expanding during the past six months to keep up with rapidly surging
demand. The carrier is apparently have some difficulty handling those two
tasks simultaneously.

MCI WorldCom, however, has simply blamed the problems on software
supplied by Lucent. Lucent spokesman John Callahan said Wednesday
the telecommunications equipment maker was "working very closely" with
MCI WorldCom to fix the software glitch. The problem hasn't arisen
before, and the nature of the problem remains unclear, Callahan said.

When CBS.MarketWatch.com asked to speak with an MCI
WorldCom engineer for a technical description the network problem
Friday, spokeswoman Laughlin said, "All of our technical team is working
on getting customers back up. That's what our focus is on."

MCI WorldCom shares rose 2 9/16 to 78 11/16 Friday.

Frame relay technology

MCI's high-speed data network is partly based
on frame relay transfer. Frame relay is a "packet
switching" technology in which information is
broken into small packets and sent via various
routes to the final destination, where the packets
are reassembled for use by the recipient of the
message.

Frame relay and other packet-switching
standards are used to send vast amounts of
information -- such as audio, video and graphics
-- over high-speed networks. Eventually,
packet-switching networks are expected to
replace century-old circuit-based networks,
which are still used by major carriers such as
AT&T to carry voice phone calls and some data.

As shown by the MCI WorldCom problems,
however, packet-switching networks still have
kinks to be worked out and aren't as reliable as older, though slower,
circuit-based networks. Most companies are reluctant to fully switch to
packet-switched networks until reliability is the same as with older
networks.

MCI WorldCom's Laughlin acknowledged that some big corporate
clients have access to alternative high-speed networks or other backup
capabilities.

Some industry observers say delays are inevitable, likening the expansion
of the Web and the data networks that connect it to the repaving of major
urban roads during rush hour -- there's bound to be some congestion.

What's important, they say, is whether the networks are designed
properly. Those that are should be able to avoid big problems or work
through them quickly.