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Technology Stocks : BAY Ntwks (under House) -- Ignore unavailable to you. Want to Upgrade?

To: Bosco who wrote (5234)	4/14/1998 12:41:00 PM
From: WiseGuy	Read Replies (3) \| Respond to of 6980

I wonder how Cisco can continuously get away with major outages... AT&T frame relay net goes down for the count Carrier may be liable for huge SLA penalties. By David Rohde and Sandra Gittlen Network World Fusion, 4/14/98 AT&T's frame relay network has fallen and it can't seem to get back up. As of 10 a.m. today more than 25% of AT&T's frame relay customers are still without service, according to a recording at AT&T's network operations center. The outage began at 3 p.m. Monday and continued through the evening. The situation affected not only business-to-business data communications but also a wide swath of the consumer economy. Bank ATM machines, travel agency orders and credit card transactions were disrupted. Many customers reportedly switched to backup systems running over private lines, ISDN or other carriers' networks, alleviating some of the disruption. Nevertheless, the outage may trigger big penalties in AT&T's frame relay service-level agreements (SLA). Frequently negotiated with individual customers, AT&T's frame relay SLAs went mainstream in January as the carrier loaded them into its tariffs. Under the new standard SLAs, AT&T guarantees to provide 99.99% availability of its frame relay network from service interface to service interface. The carrier also guarantees to restore lost permanent virtual circuits within four hours, or the customer gets the affected ports and PVCs free for a month. An AT&T spokeswoman said the cause of the outage was still unclear. "But we are looking into the interaction of two of the frame relay switches," she said. The AT&T recording pointed to possible problems in a Los Angeles switch. AT&T's frame relay network runs over StrataCom BPX switches from Cisco Systems, Inc., and the spokeswoman said "we are working closely with Cisco" to resolve the outage. A problem in one switch can affect much of the network because PVCs are virtual circuits whose paths may vary depending on route utilization. The spokeswoman could not specify when total service would be restored. A letter was on its way this morning to AT&T's 6,000 frame relay customers from Chairman and CEO C. Michael Armstrong apologizing for the outage and saying it was "unacceptable." Armstrong was due to hold a briefing at noon to give more information, but that may not assuage everyone. "I lost $4 million of revenue today due to [the] frame communication outage," said one user in a posting on Network World Fusion. "I understand that all AT&T InterSpan frame customers and the entire AT&T internal administration were out of service. The outage was so devastating that I now have to reorder 50% of my carrier service and diversify into Sprint and MCI." The user speculated that because "AT&T has segmented their net into three areas it might be architecture limitations which were violated during normal switch port installation." Another user criticized AT&T's response to the problem, calling it "pathetic." "This national outage by AT&T affected every single customer who relies on this service, causing countless problems behind the scenes at major corporations as well as affecting consumers who were shopping," the user said.

To: Bosco who wrote (5234)	4/15/1998 4:36:00 AM
From: Moominoid	Respond to of 6980

Thanks for the explanation. Yes, I can see why you might think BAY - and alas, the whole market is overvalued. While you have sort of elaborate more in your response to Victor's - incidentally, I sort of agree the market is overvalued There are some ways that the current market might not be overvalued. For example the equity premium may have fallen. The boomers are less risk averse perhaps than their parents and are not so worried about putting money into stocks. So the appropriate discount rates are lower than in the past. Or investors are looking at earnings. In this case the market is at fair value even with the historical equity premium. The problem with earnings valuation is that you can't derive an equilibrium (unless all earnings are paid out as dividends of course) ie investors won't get the return they expect. - does you model take into account diffferent sectors and the technical strength of the target stocks. For instance, it seems that there are loftier stocks in general and those within the same segment of the sector. Large cap stocks have a premium for liquidity which isn't accounted for by the model. I would argue that the model doesn't explain much at all about short-run dynamics of stocks but in the long-run prices should move towards an equilibrium soemwhat similar to this. David