SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : e.spire Communications (ESPI) -- Ignore unavailable to you. Want to Upgrade?


To: Mike Harnack who wrote (374)8/19/1999 12:23:00 AM
From: peat  Respond to of 471
 
MCI shut down

the article does not mention ESPI but it is of concern to any telecom.

MCI WorldCom network woes cast pall
Complex high-speed networks more prone to trouble

By Jeffry Bartash, CBS MarketWatch
Last Update: 4:02 PM ET Aug 18, 1999
NewsWatch

WASHINGTON (CBS.MW) -- MCI WorldCom's network breakdown over the past
two weeks was by far the industry's largest yet, but it certainly won't be the last.

In the past few years, Bell Atlantic (BEL: news, msgs) , AT&T (T: news, msgs) and now
MCI WorldCom have all encountered major disruptions in the high-speed data networks.
While such troubles have generally been infrequent, they've caused much hardship for
corporate clients, who've increasingly come to rely on them.

Though network failures often involve
complex software and hardware
issues, the root causes are actually
quite simple. Carriers are trying to
make large upgrades to intricate data
networks to meet skyrocketing
growth, especially for Internet access.
At the same time, they are trying to
keep networks up and running nonstop
to meet the omnipresent needs of
corporations.

"It's like changing jet engines in mid-flight," said John Ryan, chief analyst and founder of
RHK Inc., a telecommunications consulting and market research firm.

Complex issues

The difficult is compounded by the complex nature of the systems involved. Many
high-speed networks are based on "packet-switching," a form of data transfer in which a
message is broken into small parts and sent via the best available route to the recipient,
where the message is reassembled.

Packet-switching networks are like the hare in the famous fable. They allow more data to
be sent at greater speeds than older, traditional circuit-switched networks. Yet while
circuit-switched systems, like the tortoise, are slow, they are also steady. Network failure
is almost non-existent on the older networks.

As high-speed networks expand, moreover, their increasingly complex nature requires
increasingly complex software to run them. "Clearly the networks are becoming much
more automated and dependent on software," Ryan said. "It?s very difficult to produce
software that works for the very first time."

In MCI WorldCom's case, the carrier was upgrading its so-called frame-relay network
with Lucent Technologies software so it could handle more traffic in the future. Though it
was removed to end the crisis, new software will eventually have to be installed to allow
for expansion.

That's because demand for frame relay is growing 60 percent a
year, figures Lisa Pierce, director of global telecommunication services at Giga
Information Group.

Trail of trouble

MCI WorldCom (WCOM: news, msgs) said its network woes began Aug. 5. But there
had been several significant disruptions in the weeks leading up to that date. "Customers
were reporting problems before that," Pierce said.

On July 22, MCI WorldCom's Boston switch experienced trouble and disrupted service
throughout the morning, according to a letter written by Kerry Casey, executive director
of service support at MCI WorldCom, a copy of which was obtained by
CBS.MarketWatch. The Philadelphia switch then had a hardware problem, causing
delays on Aug. 2. Casey also mentioned that MCI WorldCom was working to fix a
"software error that had intermittently affected our customers."

"It is important to note that although the software error retains the potential to affect
service until this (upgrade) work is completed, the risk of service impact is proportionately
reduced as the upgrade moves to completion," Casey wrote in the Aug. 4 letter.

Linda Laughlin, a spokeswoman at MCI WorldCom, said she is not aware that those
problems had anything to do with the network breakdown that occurred Aug. 5.

After the initial congestion, it took 10 days for MCI WorldCom to shut down the network
to remove the problematic Lucent (LU: news, msgs) software. The company has come
under intense fire for how it handled the situation. Many customers were without service
for large portions of that time and they had difficulty extracting information from the
carrier.

By contrast, when AT&T's frame-relay went down in April 1998, the carrier immediately
went public with the news and focused entirely on getting most customers reconnected
within a day or two. It then immediately offered a full month of free service, far more than
the 20 days offered by MCI WorldCom to clients who had been disconnected for much
of 10 days.

"We went very public with the situation because of the thousands of customers it was
affecting," said Darrell Sagehorn, director of data marketing at AT&T. "Most customers
were up within 24 hours."

Said Pierce of Giga: "You?ve noticed how both companies treated it differently."

The aftermath

Some industry observers wonder if MCI WorldCom was trying to do online diagnosis of
the software -- a charge the company denies. Instead, these critics argue, MCI
WorldCom simply should have removed the software and focused on getting customers
back up.

MCI, which says its problems were different from those experienced by AT&T, has
defended its actions. Spokeswoman Laughlin said technicians couldn't identify the
problem right away. In addition, the carrier appeared to be making progress stabilizing the
network in the first week, before another blowup occurred.

It was only then, eight days after the problem started, that the carrier decided to pull the
plug on the entire frame-relay network, one of four it operates. "That's a critical decision
-- anytime you affect all customers," Laughlin said.

The aftershocks of MCI WorldCom's network breakdown are likely to be felt for a
while. Already, rivals are aggressively targeting MCI WorldCom customers, and fielding
inquiries from irate WorldCom clients.

"We?ve gotten more calls in the past few days in light of the troubles," spokesman Tyler
Gronbach of Qwest Communications acknowledged.

Still, the one thing you won't hear Qwest (QWST: news, msgs) or any other data carrier
tell potential clients is that networks are foolproof. "Qwest is not saying it?s not going to
happen to us," Ryan said, "because they think it could happen to them."

Gronbach concedes the point, but notes that Qwest is newer than its bigger rivals, uses
the latest technology and runs a more uniform network.

"We?re all vulnerable, but companies using new technologies and fewer platforms ... could
be less susceptible. When you do it (upgrades) in a larger environment, there are more
variables," he said.

Yet the simple fact is, frame-relay and related packet-switching networks are not 100
percent reliable. "They aren?t as good as circuit-oriented networks. There is a tradeoff,"
Pierce said. "It?s called a 'virtual' network because it?s not real."

Backup plans

As a result, carriers are likely to take further steps to avoid costly blowouts in the future.
AT&T created a 13-point blueprint for dealing with such situations after the April 1998
failure. Qwest runs a site in Arlington, Va. that extensively monitors the health of its
network. MCI WorldCom is almost certainly going to strengthen its procedures for
handling network failure.

"We all are striving for the reliability of a circuit-switched network," Sagehorn of AT&T
said. "Across the industry this is another wakeup call that we have to be better attuned to
outages. We did a year ago. Our competitors are learning this week."

Countered Pierce: "When it happened to AT&T a year ago, it should have been a
wakeup call for the entire industry then."

Despite precautions being taken by carriers, analysts expect occasional network failures
to occur in the future, given the nature of the technology and the intensifying demand.
"We?ve seen explosive growth in the frame relay sector," Gronbach of Qwest said.

With that in mind, most businesses ought to protect themselves by using two carriers, at
least for critical operations, or in rarer cases set up expensive but more reliable private
networks. While the cost may be high, the cost of not doing so may be higher, analysts
warn.

"You better have an excellent contingency plan," Pierce summed up.

Jeffry Bartash is an online reporter for CBS MarketWatch.

this can't be doing us any good

pete



To: Mike Harnack who wrote (374)8/23/1999 10:33:00 PM
From: Trevor Quest  Read Replies (2) | Respond to of 471
 
Mike,

He made it sound like it was recent, 4-6 weeks, but I did not confirm the specific time.

If this guy says GS made the loan them I am sure it is true and public knowledge. I trust the guy so never botherd to dig around and check but it is probably worthwhile to do so.

Good Luck,

TQ