Archive by Ed Gubbins

Remembering Jeanette Symons

Symons

I spoke with Jeanette Symons just once, back in 2000, for a story in Telephony’s sister publication, Upstart.

I remember how friendly and personable she was. (In any picture you can find of Jeanette Symons, she shows a lot more teeth than most telecom executives do.) I remember how impressed I was with her brilliance and the fact that she flew her own plane whenever she traveled on business. more

Stretching copper

When AT&T moved the goalposts back again on its expected deployment of bonded VDSL2, the industry seemed to collectively shake its head in frustration. Yet another delay in the carrier’s fiber-to-the-node initiative. And yet another return to the inconvenient truths about the bandwidth limitations of copper.

“AT&T will need to do something dramatic in order to find the bandwidth to deliver multi-stream high-definition [TV], especially since the cable and satellite competition have expanded their HD channel line-ups and/or VoD libraries substantially,” said Erik Keith, an analyst at Current Analysis. “MPEG-4 will help, but FTTN DSLAMs will not be the best strategy long-term. FTTP is really the best way to go.”

However, a few developments this week are aimed at not giving up on copper so quickly.

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AT&T: Pair-bonding to come in ‘late 2008′

AT&T said today it expects to begin pair-bonding advanced DSL lines in “late 2008,” pushing back the expected arrival of what the company says is an important part of its fiber-to-the-node (FTTN) initiative.

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New CEO describes Sorrento’s second life

Though optical transport equipment vendor Sorrento Networks was absorbed by Zhone Technologies in 2004, a new incarnation of Sorrento launched this month, acquiring those products back from Zhone. Its CEO Jim Nevelle spoke with Telephony about the startup’s plans.

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Why Ciena acquired Worldwide Packets

Ciena’s surprise announcement of its plans to acquire Ethernet access vendor Worldwide Packets left some analysts scratching their heads yesterday, largely because Ciena declined to offer many details on key justifications for the deal and its terms. more

Juniper loses its COO

At first glance, analysts do not appear to be too dismayed by the news of Juniper Networks’ chief operations officer resigning without a replacement. In a research note this morning, UBS Investment Research analyst Nikos Theodosopoulos called the announcement a definite negative for Juniper but said the router vendor’s strong fundamentals would outweigh any effect of Stephen Elop’s departure in coming months.

Elop, who joined Juniper as COO (a post created for him) only a year ago this month, was crucial to the router vendor as it conducted a sweeping internal overhaul. The man himself described some of those efforts to me in an interview last fall. In that sort of reorganization, it’s especially helpful to have an outsider at the helm to see things with a fresh pair of eyes. If Juniper is now on the tail end of those efforts, Elop’s importance may be ebbing anyway.

For day-to-day operations, I have posed the question before: Who needs a COO? Some studies have even suggested that CEOs with COOs perform worse because they rely on the COOs more.

In any case, if Juniper wants to maintain the position, Theodosopoulos had an interesting piece of advice in this morning’s note.

“Juniper may need to provide a path to CEO for the new COO in order to get a high-caliber candidate like Elop,” he wrote. “Juniper has had two COOs in the past, and both left the company within two years of starting.”

Juniper’s CEO for more than 11 years, quinquagenarian Scott Kriens, gives the impression he plans to stick around a while. If Juniper wants to lure a top-shelf, hard-working, ambitious COO, the company must realize that, to such a person, being COO won’t always be enough.

Buying on the rumor

“Buy on the rumor, sell on the news.” So goes the old Wall Street saying, and so go investors, in large numbers. One of the problems with that notion, of course, is that it encourages rumors in all sorts of unhelpful ways. Take for example the story of Carrier Access, an equipment vendor that put itself up for sale last summer and was acquired by another vendor, Turin Networks, in December.

In early August, just days after Carrier Access announced it was seeking strategic alternatives, a news story in one prominent online publication, citing anonymous sources, claimed Tellabs was “close to acquiring” Carrier Access for nearly $7 per share, having been in discussions on the subject “for a while.” According to information filed only recently by Carrier Access, the company had had discussions with numerous potential suitors in the months during which it was seeking strategic alternatives, but in all that time, it had received (or in one case, sent) non-binding “indications of interest” from only four companies: Turin Networks, a private equity fund, a small-cap public company and a company that is publicly traded outside the United States. None of those sound like Tellabs to me. With a market cap above $2.6 billion, it’s a bit of a stretch to call Tellabs “small cap,” since the term usually refers to companies with market caps between $250 million and $2 billion. But even if it was, the small-cap company in question didn’t send Carrier Access a letter of interest until November 15, 2007. And even in mid-November, Carrier Access said, the small-cap company had not yet begun due diligence on its would-be target.

So how could Tellabs have been “close to acquiring” Carrier Access back in early August? I’m not sure.

At the end of September, the same online publication wrote again of the supposedly imminent Tellabs deal, claiming, “One source says the board was set to vote on a number of proposals [this week], with Tellabs being the front-runner.” The board did meet that week to discuss potential deals, but again, at that point, Carrier Access hadn’t received a formal offer (even a non-binding one) from any company matching Tellabs’ description, so being “the front-runner” seems doubtful, to say the least. According to Carrier Access, the board decided at that meeting to send its own letter of interest to the non-U.S. publicly held bidder, to express an interest in acquiring it in an all-stock transaction, while continuing discussions with the other three parties. (According to the filing, that non-U.S. firm wanted to execute a reverse-merger, in which Carrier Access would technically acquire it but end up owning the minority of the combined company, so that the resulting company would trade on the NASDAQ.) Carrier Access sent that letter on October 1, 2007 and spoke with management at the non-U.S. company shortly thereafter, continuing discussions with the other bidders.

Meanwhile, the vendor’s joint product partnership with Tellabs–perhaps the main justification for a Tellabs acquisition–had dissolved.

In early November, the aforementioned online publication claimed Carrier Access was getting acquisition offers “in the $5 to $6 range,” again citing anonymous sources. That would be interesting if true, since the company agreed to be acquired for $2.75 per share later that month.

I’ll leave it to others to speculate as to the motives of those anonymous sources or how their assertions came to be reported as truth. I’ll simply say: Don’t believe everything you read. And don’t buy on the rumor.

Congress can debate telecom immunity but not jurors

As I write this, members of the U.S. Senate are debating whether to forward legislation that would grant some measure of immunity to telecom companies such as AT&T and Verizon for allowing the federal government to eavesdrop on American citizens without warrants.

Much of the rationale offered by telecom immunity supporters is that telecom carriers rightly saw the need, in the wake of the Sept. 11 attacks, to prioritize national security and rapid action over bureaucracy or even civil liberties. But recent reports suggest this activity started even before Sept. 11, 2001.

Some say the carriers shouldn’t be punished for this activity because they were assured by the administration that the program was legal. AT&T and Verizon “are not experts on Article II of the Constitution,” Senator Diane Feinstein said on the Senate floor today, arguing for telecom immunity.

I have a short answer on this issue. I will happily listen to supporters of telecom immunity enumerate all the various arguments justifying and mitigating carriers’ actions in this case. And when they’re done, I’ll simply say this: “If your arguments are so reasonable, why don’t you trust a jury to see them?”

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