North American Network Operators Group

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Re: Covad, Chapter 11 !

  • From: Mitch Halmu
  • Date: Wed Aug 08 12:00:46 2001

On Wed, 8 Aug 2001 [email protected] wrote:

> On Wed, 08 Aug 2001 10:42:30 EDT, Mitch Halmu said:
> > That nicely completes the BK suite: NorthPoint, Rhythms, Covad.
> > DSL now in firm control of the ILECs, competition crushed.
> I've seen several references to Covad's business unit that does DSL
> continuing normal operations - it's the parent company that's reorganizing.
> If they *do* make a good stock-for-debt swap, they may come out in a much
> *more* competitive position.  How would YOUR balance sheets look if you
> suddenly had $160M/year more to play with?
> In today's business climate, I'd *worry* if my competitor went Chapter 11
> with a good clear reorganization plan (as opposed to a liquidation plan).

Ownership of the C/O and the last mile confers ILECs an unfair advantage
in this business. While they have set up separate companies for Internet
access, they still benefit from moving funds from one pocket to another,
within the same conglomerate. No independent company can realistically
have a fair shot at competing in this environment, as demonstrated by
the string of bankruptcies we just witnessed.