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AT&T: WorldCom fears overstated

Ma Bell is on the warpath as it aims to assure the market that it can pick up the slack even if WorldCom's Internet backbone vanishes overnight.

John Borland Staff Writer, CNET News.com
John Borland
covers the intersection of digital entertainment and broadband.
John Borland
3 min read
If the Internet sky is falling as a result of WorldCom's bankruptcy and other networks' woes, AT&T doesn't believe it.

The company is on the warpath, aiming to assure the market that even if WorldCom's Internet backbone were to vanish overnight as a result of the company's bankruptcy and accounting misdeeds, it could pick up the network slack without breaking stride. The move comes not long after Ma Bell launched a major advertising campaign aimed at picking up worried WorldCom customers.

Granted, a total WorldCom network collapse is improbable, even given the worst possible case. Most analysts expect some complicated financial wheelings and dealings, possible asset sales, and certainly an uncomfortable period while it all gets worked out. But seeing the network go dark isn't high on many people's list of probabilities.

"I think (the disappearance of WorldCom's Internet backbone) is the least likely scenario I can imagine," said John Ryan, chief analyst at network research firm RHK.

Still, the focus on WorldCom's once unrivaled Internet backbone service is shedding new light on myths and on genuine changes that are rippling through the network industry apart from the company's financial difficulties.

For years WorldCom's long-distance Internet backbone service carried more traffic than any other provider, in large part because of its relationships with America Online's and Earthlink's dial-up business. However, a combination of factors has eaten into that lead even before the giant's accounting scandal.

The company's biggest customers had already begun using multiple networks, hedging their bets against network failures, and trying to reduce their bandwidth costs.

Meanwhile, AT&T has begun carrying backbone traffic for most of the big cable modem customers, who account for about 10 to 15 times as much Internet traffic per household as a corresponding dial-up modem user.

That means that AT&T is now tied with WorldCom for the amount of Net backbone traffic it carries, and is on a path to exceed the former leader in just a few months, Ryan said. Both companies carry about 15 percent of the total market's data, according to the company's research.

That's not an insignificant amount. But AT&T Chief Technology Officer Hossein Eslambolchi is adamant that the rest of the Internet could absorb the traffic quickly if WorldCom's UUNet division disappeared. More ambitiously, he says, AT&T could take up the slack almost overnight.

"It's a piece of cake," Eslambolchi said. "It's not a huge complex issue."

Substituting for a vanished WorldCom would require some new investment on the part of AT&T and any other competitors who tried to step in. The massive fiber-optic binge of the last several years has left networks with plenty of theoretical capacity for more traffic. Actually using that capacity would require them to "light up" the networks with new data routing equipment from companies like Cisco Systems and Juniper.

The trickier part would come in the parts of the network closer to actual customers. Analysts say it could take months for other companies to re-create the urban networks owned by WorldCom, as well as the access points that hand off local data traffic to the long-haul backbone networks.

Eslambolchi says he's confident that AT&T could turn that business around quickly, however. He points to the company's history of re-creating Excite@Home's cable modem network in just under two months, and the transition of close to a million customers in just a few days.

"Could we absorb all that traffic?" Eslambolchi said. "We've already done that."

To be sure, the Excite@Home transition wasn't without its headaches. Many customers complained that the transition was far from flawless, even allowing for the scale of the undertaking.

But analysts say AT&T is probably right about the WorldCom situation, but that it won't really be "a piece of cake" to deal with the network headaches.

"Rolling that over is going to take a huge amount of labor," Ryan said. "You actually have to plan some of that (network change). You can't just throw money at it."