Mergers, fiber, rock & roll

After an exhaustive search for a suitable model for profiling service providers and predicting their successes and failures, I have decided to mimic the documentary approach used by the cable channel VH1.

For the sake of those readers whose television viewing habits are more discriminating than mine, VH1's omnipresent "Behind the Music" installments chronicle the formation, rise and inevitable fall of popular musical groups from the past several decades. In between bookends that explain how musicians got their start, how they died - sometimes figuratively but often literally - and how they were reborn, these programs outline their subject's descent into one of many vices that contributed to their demise.

That same kind of formula - with just a slight adaptation - can be used to document the lives of the incumbent and competitive service providers that have found success so quickly and almost become the rock stars of this industry. Let's plug in a fictitious company and see how it works:

The subject of this episode of "Behind the Network" is Amalgam Communications, a small network operator that currently makes a modest living providing data access to cyber cafes and other small businesses in the quiet foothills of northern California. In its heyday, however, Amalgam accrued billions of dollars in state-of-the-art network assets that spanned the world. The company carried every imaginable kind of service: wireline and wireless voice, high-speed data, mobile Internet, undersea fiber transport and global satellite connections.

In the end, though, a potent combination of executive egos and poorly managed financial assets caused Amalgam to tank, forcing its backers to sell nearly everything and sending its founders into a destructive spiral that led, ultimately, to the modest existence that now defines Amalgam.

The founders of Amalgam had dreams of a communications industry free of iron-clad corporate rules and open to innovative ideas. After years of clashing with rigid mindsets and outdated networks as up-and-coming executives at a monopolistic outfit, these two bright minds left to stake their own competitive claim. They quickly assembled a staff of fresh-faced talent from other legacy operations and launched an IPO that made them billionaires overnight. But they would later learn the high price of fast fame and fortune.

During the next decade, Amalgam grew into a communications behemoth. The company went on an M&A binge, absorbing competing networks - regardless of their relevance - in the name of market dominance. Meanwhile, the company's founders enjoyed lavish lifestyles, squandering company earnings on the biggest trade show booths and hospitality suites that put post-Oscar parties to shame.

But that excess, along with the gradual disappearance of entrepreneurial vision, finally pushed Amalgam into bankruptcy. A rift between the company's two founders, sparked by a chief financial officer who pilfered billions of dollars from Amalgam, resulted in an ugly court battle that continues to this day.

Eventually, however, the two founders of Amalgam found their separate peace. One abandoned communications in favor of a musical career. The other continues to run Amalgam, which, after all the legal tangles and bankruptcy rulings, is just a shell of its former self. But both look back at their experiences nostalgically, saying they hope the lessons they learned from their irresponsible days of rampant gluttony will serve them well in whatever their next venture might be.