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

To: Frank A. Coluccio who wrote (974)	5/20/1999 1:14:00 PM
From: Lazarus Vekiarides	Read Replies (2) \| Respond to of 15615

Frank, You're right about their apparent lack of focus. I can't agree more. I got into GBLX as an international data networking play. So I actually got to like the FRO deal after I thought about it a little. It's was a much better way to fill their coffers than, say, LCI was to QWST. This is because FRO has an enlightened networking services story, IMO. While that deal changed their target market, it's still a great market to be in. The demand to provide data to businesses is quite high and will stay that way for a while. I like this company as a provider of pipes to businesses and carriers as much as I liked them as a provider of overseas pipes to carriers. (This is what I thought they did two weeks ago...) On the other hand, the USW deal is ill-timed from a number of perspectives. The baby bells are going to be on sale in the coming years. They are still largely clueless. Why buy one now when you can compete with them effectively in their higher margin businesses? Why pay top dollar today for tomorrow's damaged goods? (Sol certainly knows this.) Providing DSL to middle America is not going to be profitable for a while yet. It also comes with a lot of baggage in this case. I can think of other plays I'd rather make for "last mile" services. There are more competent and motivated players than USW out there. So, now that GBLX will be mostly a provider of pipes to people's houses, I'm rather ambivalent. To answer your question, I believe that this is what they've become with this deal: a competitor to companies like RCN. (OK, maybe not entirely, but look at the resources the have dedicated to this end of the business vs. the others.) In short, I have high confidence that they'll find a way to jack the price of their stock up in the short term. I'm just not sure I want to be on the ride for the long term anymore. Somebody please convince me otherwise. Laz

To: Frank A. Coluccio who wrote (974)	5/20/1999 1:23:00 PM
From: MAX404	Read Replies (1) \| Respond to of 15615

Frank, IMHO they have a plan. The plan is to be able to offer as many clients as possible end-to-end bandwidth. To get the last mile you need either your own infrastructure, or that of a CLEC, or that of an ILEC. The ILEC cannot sell long distance until the FCC says there is a competitive environment in its region. CLECs are too leveraged to buy anything big, and that's why they are getting bought. Bob has bought the future rights to the last mile, and with this deal USW will have a reason to speed up the certification process which will allow them to offer long distance. Cause then USW-GLBX-FRO will be all the same owner, and the USW part won't be looking backward to slow down the neighborhood CLECs in question, but rather looking forward to selling bandwidth. Of course, this strategy will also help the CLECs in the short term, since their complaints with the ILEC will have to go away (or else the FCC won't certify USW) but who cares - they will have to deal with some long distance carrier anyway for all but local traffic. Said long distance carrier might also be GBLX, to the extent that antitrust will allow. So Bob is pushing the envelope, just looking a bit out into the future. If he were to wait, wait until USW passed the FCC checklist, he would have a much more expensive acquisition on his hands, cost-per-line speaking. This market is used to quick hits and 100%'s every 3 months. With this deal the combined company gets a chance at end-to-end service for a significant number of customers in a rich and growing part of the US (US West is not rural America, as someone has said), gets customer support systems and experience for the support of end users (the phone company isn't all crap ... many years ago I did some consulting work exactly for USW on customer support systems and not that they are any better than the others but the systems are in place, are highly complex, and GBLX can use that expertise.) The market may put Bob under a bit of pressure to keep the deal going but I think he'll pull it off. Long enough post. Bye bye.