Steve Pilgrim: Bandwidth

AN OPEN LETTER TO INVESTORS

BROOMFIELD, Colo., July 19, 2002 - The following statement can be attributed to James Q. Crowe, chief executive officer of Level 3 Communications, Inc.(Nasdaq:LVLT):

Read the statement. It clarifies this.

A DECENT SUMMARY OF AN EARNINGS CONFERENCE CALL
Although "backed by Warren Buffett" seems a bit of overstatement

Level 3 Posts Smaller Second - Quarter Loss. PHILADELPHIA (Reuters) - Level 3 Communications Inc. (LVLT.O), the high-speed communications company backed by investor Warren Buffett, on Thursday posted a smaller-than-expected second-quarter loss but warned it saw mixed signals for a rebound in sales. By Reuters. [New York Times: Technology]

WHAT WILL IT LOOK LIKE WHEN IT EMERGES?

WorldCom plans to file for bankruptcy court protection as early as this weekend. The move likely won't have any immediate effect on customers, but ... [Wall Street Journal]

PILING ON?

Salomon Misused IPOs, Suit Says [Wall Street Journal]

COULD A STORY BE MORE WRONG?

This story is so wrong. First, the headline makes one think Level 3 is either considering the adoption of or re-evaluating its existing stock option plan. The second sentence is correct. Level 3 has had (from its beginnings) an "outperform" stock option plan in which options have been expensed at the time of the award.

The latest press release simply clarifies the proxy. The bottom line involves connecting a few dots. Level 3 recently sold $500 million worth of convertible bonds to three institutions. The cash was earmarked for general corporate purposes including the acquisitions of assets while the telecom industry is going through consolidation. What better time to make sure you are able to retain the talent and know-how that is needed to ramp up the network with new customers and increased traffic!

The best way to use the mainstream press is with the Internet. Let a story headline direct you to a company's press release or announcement. Facts from the horses mouth are better than Associated Press news feeds.

Level 3 Looks at Stock - Option Plan. BROOMFIELD, Colo. (AP) -- Level 3 Communications Inc. wants to amend its stock-option plan to provide incentives for employees and owners. By The Associated Press. [New York Times: Technology]

AN UNIDENTIFIED INVESTOR
Hmm...

Williams Cos. is near an accord to end its relationship with its former telecom unit, which recently filed for bankruptcy-law protection. [Wall Street Journal]

A LOT OF DRY POWDER
Keep an eye on these guys when the shooting starts

Blackstone Amasses a Record Equity Fund. The Blackstone Group announced yesterday that it had raised $6.45 billion for its latest private investment fund the largest private equity fund ever raised. [New York Times: Business]

ALAN'S COMMENTS ARE BETTER THAN THE ARTICLE

Alan Reiter weighs in on Project Rainbow: Alan comments on today's New York Times story about a coalition of a number of hardware and cell companies to build a national Wi-Fi/data network. [80211b News]

STRETCHING THE DEFINITION OF INDEPENDENT ANALYST
Grubman also has some odd notions about "the full service" firm

New York's attorney general has gathered Salomon Smith Barney e-mails that could form the basis of a case against analyst Jack Grubman. [Wall Street Journal]

ANOTHER BLOW TO THE TELECOM MONOPOLY
Take a look at Yipes!

InfoWorld: Broadband horizon. Ethernet in the first mile. [Hack the Planet]

HERE'S ANOTHER REASON THAT TELECOM COLLAPSE AND REBIRTH IS INEVITABLE

Few people debate the fact that all of us use the phone at home, in business and on-the-go more than we did even ten years ago. Few people argue with the notion that we will be using one or more of these to an even greater degree in the future. We probably won't stop at Blockbuster, but we may 'order' a movie feed from Blockbuster. Those same phone calls may become video calls. Demand for bandwidth is a given!

The industry is facing the death throws of a 100-year old legacy, copper-based network. This centrally-planned, government subsidized relic is currently operated by a relative handful of monopolists or executives from the monopolists' ranks. Their rule is coming to an end. Some of them don't even know it.

Replacing that old network and its kings and lords will be a modern, continuously upgradable fiber optic network that passes IP packets end-to-end. Running that network will be a group of people who understand Moore's Law, rapid time-to-market and the concept of price-elasticity-of-demand. They're anything but monopolists!

I had an experience similar to the one mentioned below when one of our daughters phoned home from Boston while dancing with the Boston Ballet for a month or two. Little did we know we were facing a $700+ bill until after it arrived. We had done our homework in advance, fortunately, had documentation for the rates we had been quoted and got adjustments made to the bill. The relief was not easy to get nor was it immediate, but in an age of $0.045 per minute long distance rates, $700+ was not going to be paid!

Other than the airline industry, where you can be arrested for inquiring about the sobriety of the pilots, no industry treats its customers the way the telecom industry has. Better times are on their way, though!

SprintPCS Nightmare. I'm broke. I barely have enough money to get by through the next month. And my "royalty" check I received this weekend was only 36.00 - I was expecting 1000.00. Still, I can manage. I can manage...until today. Don't worry... [Burningbird]

WHAT WILL THEY TALK ABOUT ON TELECOM ROW?
Save a seat for your cohorts at Worldcom & Andersen

Adelphia indictment [USA Today : Front Page]

IN SPITE OF ITS SIZE

much of the end-game for Worldcom could be visible by the end of the week. We may not precisely know who the participants in a takeover will be, but we should get a clearer picture of what will happen to the business.

FCC chief Michael Powell , declaring the telecommunications sector in "utter crisis," suggested his agency could let a Baby Bell take over WorldCom. [Wall Street Journal]

"LUCY, YOU GOT SOME 'SPLAININ' TO DO"

Auditing Woes at WorldCom Were Noted Two Years Ago. Two years ago, WorldCom notified Arthur Andersen of improper shifts of expenses that were appearing in the international department, but the transactions remained on the company's books until as recently as last month. By Kurt Eichenwald. [New York Times: Business]

THE BANKS DIDN'T FREEZE THE CASH

on Friday, but they meet again on Tuesday with the court. This company's stockholders won't see a dime. Worldcom will be faced with deciding what business(es) it wants to emerge from bankruptcy with. Otherwise, the creditors and the court are likely to break the business into pieces and sell them in an attempt to recover some of the money. The company's sales in 2001 totaled $21.3 billion. That's a fair amount of telecom market share to throw up for grabs.

Court Won't Freeze WorldCom Assets [Wall Street Journal]

SOMEBODY'S GOING TO WIND UP MAKING LICENSE PLATES

Lawyers say WorldCom CEO knew [USA Today : Front Page]

ANOTHER CLOUD IN THE PERFECT STORM

More government eyes on Qwest. The General Services Administration, the federal buying and procurement agency, is reviewing the contract status of the embattled telecommunications company. [CNET News.com]

HERE'S A HOME RUN

Bluetooth's Virtues [80211b News]

YOU THINK I'M NUTS?

Here's one that gives Level 3's play-by-play!

THEY WANT IT ALL

Microsoft to Enter Wi-Fi Hardware Business This Fall: Details are scanty, but remember that Apple has sold its AirPort equipment, Wi-Fi certified, since 1999. Microsoft and Intel joined Wi-Fi certification trade group WECA (Wireless Ethernet Compatibility Alliance) several months ago and both received board seats. Several readers pointed me to many articles, including ones at InfoWorld, and this laughable pretense at an interview that's really a press release. [80211b News]

THE SUMMER OF '02
Telecom changes colors

[May require a subscription] - Last Friday I spoke of the telecom industry as one with no conscience. Today the Wall Street Journal runs this. Is it any wonder that this industry trades at roughly 90% off its market highs? Is it any wonder there are countless scandals, fines and bankruptcies?

Today, Worldcom's Sidgmore said avoiding a bankruptcy filing "is looking much more difficult."

With demand for bandwidth continuing to grow, many companies attempting to sell assets or parts of their operating businesses, could Level 3 be at precisely the right place at the right time to take advantage of a "perfect storm?" Someone must think so as the stock has traded up from an opening of $2.89 on Monday to a close of $5.59 today; and this in the face of a general market decline this week. We might be witnessing the start of telecom industry transformation of historic proportions!

FIGHTING SPAM

Lately we've heard about SpamNet from Cloudmark. Today, Walter Mossberg reviews ChoiceMail. SpamNet is free. ChoiceMail seems to start at $29.95.

WHAT DOES THE END GAME FOR THE LAST MILE

really look like? Where will a cell phone hop on fiber for long haul needs? Where will these 802.11a/b users really get their bandwidth? What role does wireless networking have in the future IP network architecture? Is it solely a last mile phenomenon?

Road Signs for Vagabond Computer Users. In 'war chalking,' a series of symbols on sidewalks and buildings indicate the presence of a wireless network. By Glenn Fleishman. [New York Times: Technology]

DAN'S WEBLOG HAS NOTES FROM THE INTERNET LAW PROGRAM

Control freaks tightening their grip on the Internet by Dan Gillmor. Lawrence Lessig, a Stanford law professor and author of several important books on our technology-influenced future, was the program's pessimist. He's been jetting around the world for several years, warning of what's coming. And what's coming, he keeps saying, is a victory of the control freaks. [Tomalak's Realm]

"PAV"

VoiceStream is holding preliminary merger talks with AT&T Wireless. A deal could be valued at over $10 billion and would form the nation's No. 2 ce... [Wall Street Journal]