contracts and survivability of telecom sector

michael.dillon at michael.dillon at
Tue Oct 7 10:00:20 UTC 2008

> Are there any recommendations from an operational 
> perspective, should one or more of these or other telecom 
> companies have such problems? 

Make sure that you have more than one upstream provider,
preferably three providers minimum so that if one of
them is suddenly shut off, you still have resiliency.
In general, your upstream providers' operational networks
and you, the customer connected to that operational network,
are considered to be valuable assets so if a company falls
into Chapter 11, there is a good chance that another company
will acquire the assets. At the operational level, this is
practically invisible until they start to consolidate data
centers, prune unprofitable customers, etc.

But, sometimes the financial community looks at an industry
and decides that there is too much capacity chasing too few
dollars, and the best solution for all concerned is for one
of more companies to fail hard. This happened in Europe a
few years ago when KPN-Qwest bought Ebone's pan-European backbone
and then promptly declared bankruptcy. The receivers sent everyone
home, shut down the power to all the sites, NOC included, and
auctioned off all the equipment piecemeal, except for the fibre
network. That went to another company that was also building
a competing pan-European fibre network and which also went
through a bankruptcy process, shed all its employees, and then
was reborn. Not sure what happened to the customers in that case.

So this could happen in the USA, and the solution is to spread
the operational risk by maintaining 3, 4 or 5 upstream relationships.
Don't risk losing 100% or even 50% of your connectivity. Get it
down to 33% or 25% or 20% depending on what you can afford.
Having a connection to a local Internet Exchange of some sort
is probably a darn good idea. If you aren't peering with your
local competitors, maybe you should start to do so, and reduce
the risk to your community. In smaller markets, not NFL cities,
maybe you should consider using different upstreams than your
competitor to reduce the risk on a community-wide basis.

Also, remember that this whole crisis could blow over in a few months,
and if it does, you need to be prepared for increased traffic on
your network, increased customer connections, etc. That too, is
a risk to evaluate.

--Michael Dillon

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