5/98 Boardwatch info on Frontier, L3, Qwest, NT and Aptis
boardwatch.com
by Bill McCarthy
FRONTIER AND L3 SITTING IN A
TREE...
Level 3 Communications, Inc. and Frontier Corporation announced an agreement
March 24 enabling Level 3 to lease capacity on Frontier's 13,000 mile SONET fiber
optic, IP-capable network for a period of up to five years. Worth about $165 million,
the leased network will initially encompass 8,300 route miles of OC-12 network
capacity, connecting 15 of the nation's largest cities.
In a press release, James Q. Crowe, president and CEO of Level 3 said: "While we are
building our own IP- based network, this lease arrangement will give us a network over
which we can begin providing service to business customers in several cities during the
third quarter of 1998."
This is why we love press releases; they always put the CEO on a soapbox, even when
he has nothing to say. It is probably best to have a network then provide the service.
But the soapbox didn't get any better for Joseph P. Clayton, president and CEO of
Frontier Corporation: "This agreement leverages our world-class network and data
expertise by implementing a leading-edge data and Internet strategy."
Huh?
This could be the start of a beautiful relationship.
Fortunately, we don't have to understand what they're saying, just watch what they do.
They plan plenty of bandwidth to play with. L3 recently split from PKS and is running
away from Omaha to Colorado. L3 plans to build a national fiber optic IP network. The
company is going to need some help to operate that network and deliver the full range
of communications services. Frontier, a Rochester, New York-based telco, bought
GlobalCenter, a company that's doing some interesting digital distribution of web sites,
built on an ATM backbone, much of which just two years ago belonged to PrimeNet.
K-I-S-S-I-N-GST...
Expanding its regional foothold in the Internet and data services market and signaling its
intent to become an Internet player, GST Telecommunications, Inc. announced March
17 that it has entered into a definitive agreement to acquire the assets of Whole Earth
Networks, LLC, a San Francisco-based Internet service provider. The company will
become part of GST's data services operations and will retain the name Whole Earth
Networks, Inc.
Under the terms of the agreement, GST (AMEX: GST) will acquire the assets of Whole
Earth for about $9 million in cash and assume some of Whole Earth's debt. Whole Earth
is one of the oldest full-service Internet service providers, serving both residential and
commercial customers. It claims one of the largest regional backbones with connections
at three network access points and peering with about 60 ISPs. The closing of the
acquisition is subject to certain conditions.
GST is adding a great deal of infrastructure in the Western United States and integrating
an influential and experienced ISP in San Francisco appears to be a logical move. With
more than 14,500 subscribers for Internet service, Whole Earth supports a full range of
connectivity from dial-up to T-3. Whole Earth is probably best known as the provider
for The WELL, one of the Internet's oldest online communities.
Whole Earth's operations will be linked to GST's regional fiber-optic network, which
includes a 500-mile long-haul system connecting San Francisco and Los Angeles, as
well as links to Las Vegas, Phoenix, and Tucson. For the past three years, GST has
expanded its Internet operations by acquiring Internet service providers, including
Hawaii OnLine - Hawaii's largest ISP - and integrating them into the company's
comprehensive package of advanced telecommunications products and services.
On March 12 GST said it purchased Call America Phoenix. Under the terms of the
agreement, GST acquired 100 percent of the outstanding capital stock of Call America
Phoenix. Call America posted annual revenues for the 12 months ended December
31,1997, of about $5.4 million and positive Earnings Before Interest, Taxes,
Depreciation, and Amortization. The acquisition will bring significant traffic to GST's
new switching facility in Phoenix, take advantage of fiber acquired in November
between Phoenix and Tucson, as well as connections it recently developed between
Phoenix, Las Vegas, and Los Angeles.
The acquisitions are part of GST's strategy to focus on its Competitive Local Exchange
Carrier (CLEC) business in the West and connect CLECs with long-haul fiber.
The acquisition of Call America Phoenix is a direct result of the recent appointment of
company founder Kathryn Proffitt as U.S. Ambassador to the Republic of Malta.
Proffitt founded Call America Phoenix in 1983.
FIRST COMES LOVE FOR QWEST IN EUROPE ...
As of late March, Qwest Communications International Inc. appeared to be wooing
European Internet-access provider EUnet International Ltd., which it is said to be ready
to buy in a stock and cash transaction valued at slightly more than $150 million. But this
romance appears to still be in the closet for moment. No official confirmation was
released.
The purchase would give Qwest one of Europe's fastest-growing Internet providers.
EUnet, based in Amsterdam, has a network connecting 60,000 business customers in
13 European countries.
Qwest aims to become a specialist in providing high-speed data and phone services
using Internet-protocol on fiber. Qwest, announced a $4.4 billion purchase of LCI
International Inc., the nation's fourth-largest long- distance company less than a month
earlier. Other recent acquisitions include Colorado Supernet, a Denver ISP, and
Phoenix Network Systems, a long-distance reseller. To link everything, Qwest has
network agreements stretching across the U.S. into Mexico and across the Atlantic into
Europe via transatlantic high- capacity fiber links.
The European drive will be the fourth acquisition for Denver-based Qwest, which is
building a high-capacity fiber-optic network. Qwest is starting to look like WorldCom,
using its soaring stock price to buy a major position in the industry.
THEN COMES MARRIAGE FOR NORTEL AND APTIS ...
Northern Telecom said in March that it will buy Aptis Communications, Inc., a
Massachusetts-based, remote- access data networking start-up company, for about
$290 million in Nortel common stock and cash.
Nortel is in love with Aptis of Chelmsford, Massachusetts, because it is a developer of
carrier-class access switches, including the CVX 1800, for network service providers,
carriers and Internet service providers. Nortel sees the acquisition as an opportunity to
take the lead in in the access and virtual private networks (VPN) arena and the
company said it demonstrates its commitment to building a faster, more reliable, more
profitable Internet.
With the CVX1800, Nortel, which had 1997 revenues of $15.5 billion and has 73,000
employees worldwide, will be in a stronger position to deliver integrated voice and data
on an IP network. The CVX 1800 will be an important part of Nortel's just@sk
Multi-Service Access strategy. Nortel plans to deliver more capability to the product
with the addition of DSL, SONET and SS7 interfaces, network intelligence and
network management capabilities. The product will be integrated into Nortel's Internet
Thruway and Multi-Megabit network products already in service with carriers and ISPs
across the U.S.
Aptis will operate as a separate business. Paul Gustafson will remain president of Aptis
and will also become a Nortel vice-president and general manager. The transaction is
expected to close in the second quarter of 1998 and is subject to government regulatory
approval and other conditions.
THEN COMES MCI WORLDCOM IN A BABY CARRIAGE...
ROMEO AND JULIET ACT I, SCENE V
Enter star-crossed lovers Romeo WorldCom and Juliet MCI on March 11 to name
their selections to serve on the board of directors of the MCI WorldCom company
once the marriage is blessed by U.S. and European regulators.
Narrator: The 17-member board will consist of 11 outside members, including eight
named by WorldCom and three named by MCI, as well as six officers of the
companies. The directors will be elected annually by shareholders.
Romeo (WorldCom): WorldCom selections are:
James C. Allen, former CEO of Brooks Fiber Properties, St. Louis
Carl J. Aycock, director, Master Corporation, Brookhaven, MS
Max E. Bobbitt, president and chief executive officer, Metromedia Asia
Corporation, New York
Stephen M. Case, chairman and CEO, America Online, Inc., Dulles, VA.
Francesco Galesi, chairman, Galesi Group, New York
Stiles A. Kellett, Jr., chairman, Kellett Investment Corp., Atlanta
John Porter, chairman and CEO, Integra Funding and Industrial Electric
Manufacturing, Inc., and chairman of Phillips & Brooks/Gladwin, Inc., Fisher
Island, FL
Lawrence C. Tucker, partner, Brown Brothers Harriman & Co, New York
Juliet (MCI): MCI selections are:
Clifford L. Alexander, Jr., president, Alexander & Associates, Inc., Washington,
D.C.
Judith Areen, executive vice president, Law Center Affairs, Dean of Law Center,
Georgetown University, Washington, D.C.
Gordon Macklin, chairman, White River Corporation, Washington, D.C.
Press Release, (chief servant of the couple): MCI WorldCom Directors and Officers
are:
Bert C. Roberts, chairman, MCI; will be chairman of MCI WorldCom
Bernard J. Ebbers, president and CEO, WorldCom; will serve as president and
CEO of MCI WorldCom
Gerald H. Taylor, CEO of MCI; becomes president and CEO of
MCIWorldCom International
John Sidgmore, chief operations officer of WorldCom; will be president and
CEO of MCI WorldCom Internet/Technology and Solutions
Tim Price, president and chief operating officer of MCI; becomes president and
CEO of MCI WorldCom's U.S. communications subsidiary
Scott D. Sullivan, CFO and Secretary of WorldCom; named as CFO of MCI
WorldCom
Enter WorldCom and MCI shareholders
Press Release: Both WorldCom and MCI shareholders overwhelmingly approved the
pending merger between the companies during meetings held March 11 in Jackson,
Mississippi, and South Sioux City, Nebraska. The merger, first announced on
November 10, 1997, is still subject to approvals from the U.S. Department of Justice,
the Federal Communications Commission, and the European Commission, among
others.
Exit all.
Editor: Jack Rickard - Volume XI: Issue 5 - ISSN:1054-2760 - May 1998
Copyright 1998 Jack Rickard - ALL RIGHTS RESERVED
Fable Of Contents |
