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Technology Stocks : Global Crossing - GX (formerly GBLX) -- Ignore unavailable to you. Want to Upgrade?

To: MangoBoy who wrote (899)	5/14/1999 10:12:00 PM
From: D. Newberry	Read Replies (2) \| Respond to of 15615

Mark, << On first blush, I think this deal sucks in the near-to-middle term and will only serve to bog down GBLX. If USW is such a good deal, why didn't WCOM buy it? Does USW make GBLX a better GBLX? No. Annunziata is getting ahead of himself. >> My first reaction was the same as yours. But when I think about this more, it may make some sense. To fully utilize all this bandwidth GBLX is placing, retail is more profitable than wholesale. I suspect that his thinking is that USW will provide traffic into the GBLX global network. USW has been developing their data systems integration business for several years now, and is the leader of the RBOCs in this area. This fact is often overlooked by the terrible service the company has provided over the last few years in their traditional voice markets (too many reorganizations, too many consultants). Nonetheless, the data systems integration business is booming. As a result USW has naturally jumped on the DSL bandwagon early, and has the largest penetration of any of the RBOCs. If you buy into the idea that DSL will be a major transport pipe very soon, then the USW purchase gives you instant traffic on the backbone. The down side, regulatory issues could be a mess (USW doesn't get along with most of their PUCs - but congress could fix that soon) not to mention culture differences between a start up and an old line company....this is a very bold move. I don't think WCOM would be interested in an RBOC since they focus on business, not residential. Long and holding. Regards,