No more data excuses

The lull in the acquisition storm ended last week with news that Qwest Communications wants to buy LCI International, and Cisco Systems plans to acquire NetSpeed Inc.

Both announcements point to the increasing importance of Internet protocol-centric applications for incumbent carriers.

Qwest's $4.4 billion stock deal for LCI also emphasizes this week's cover theme: Alternative carriers, barely perceptible two years ago, are slowly morphing into fierce competitors.

Qwest, best known for building a national fiber optic network, stands to strengthen its already positive presence and push its standing to No. 4 in the long-distance carrier ranks (see story on page 6).

Among the few doubts expressed about Qwest's voice-over-IP network are its ability to handle heavy traffic loads and ensure that the voice packets are delivered on time and in sequence. Qwest is refuting those concerns, however, because its network is private, runs at OC-192 and shuttles voice traffic without compressing it.

Another unknown is whether the FCC will continue to let carriers such as Qwest offer inexpensive long-distance service while circumventing the traditional 3 cents- to 4 cents-a-minute access charges that voice-centric carriers pay. Just last week, ICG Communications raised the stakes by announcing it will offer IP-based long-distance for 5.9 cents a minute in select markets, undercutting Qwest's previously announced 7.5 cents-a-minute offer.

The other big acquisition news marks the latest in a series of deals for Cisco, fast becoming known as the Microsoft of the datacom world. But in this case, Cisco and NetSpeed credit U S West !nterprise Networking with bringing them together (page 8). !nterprise had picked both vendors' equipment for its rate-adaptive ADSL service, which rolled out in Phoenix and Boise, Idaho, over the past two weeks and eventually will be offered in 34 other locations.

Nortel, which held a reported 10% stake in NetSpeed, waived its interest because it plans to pursue its own integrated DSL solution, to be rolled out in the next few months. Nortel also will collaborate with Cisco on as-yet-unspecified efforts to settle issues involving high-speed access standards and products.

Now comes crunch time: How serious are the Bell companies-really-about rolling out DSL, and how concerned are they-really-about cannibalizing their T-1 revenues?