Blame it all on Bezos

(Upstart) In some circles, telecom and Internet service providers are talked about like the Ralph Nader of the new economy: They ruined it for everybody, and now we’ll have to wait four years until we can get back on track.

This morning, fixed wireless vendor Adaptive Broadband announced it has lowered revenue expectations for the quarter ending with “Dick Clark’s New Year’s Rockin’ Eve.” The adjustment is attributed largely to a delayed payment from a service provider subsidiary of Fuzion Technologies. In general, AB says deployment has been slowed by “the rapid and continuing decline in the financial state of the domestic…CLEC market.”

Western Multiplex, which has been in the process of merging with AB, e-mailed Upstart today to announce: “We intend to evaluate all of our alternatives with respect to the proposed transaction in light of this new information."

Data LECs get blamed as well for the industry’s woes. Unable to turn a profit, they’re forced to lay off hundreds of employees (most recently, Covad’s announcement on Friday that it’s firing 400 more employees). In some cases, they completely dissolve (e.g., Digital Broadband’s recent Chapter 11 filing and the collapse of Denver DLEC Jato on Friday). In turn, these companies’ failure to pay their vendors has been a cause of much concern among investors, which leads to even more financial evaporation. In turn, some data LECs blame ISPs for not being able to pay them.

Certainly service providers don’t deserve all the blame regarding telecom’s drastic slowdown. The failure of countless dot-coms resulted in a lot of lost revenue for telecom start-ups. Personally, I think Jeff Bezos should take responsibility for the whole thing.

But with the end of the year come all kinds of predictions about 2001, and as local business reporters play Jackie Stallone, we find that telecom service providers and the companies that serve them are among the companies that earn the most optimism.

In Seattle, 11 Internet businesses and nine telecom companies are included in LocalBusiness.com’s “50 to Watch” list for 2001. Newcomers include Edge2Net, which serves international carriers and ISPs, and Wonderhorse, whose software allows users to broadcast their own talk radio programs on the Internet.

Portland’s 50 most promising firms include nine telecom companies, including DSL provider New Edge Networks, which recently cut 135 positions, and newcomer Flatrock, which makes network management software. In Los Angeles, 15 of the 50 companies highlighted are telecom firms.

The list goes on and on, and underpinning it all is the hope that, as the new year unfolds, the pessimism surrounding telecom service providers will be replaced with a focus on telecom’s successes, both those that have weathered the shakeout and those who are only now seeking their initial funding.

Senior Writer Ed Gubbins also blames Jeff Bezos for his post-New Year’s hangover. Drop him a line at ed_gubbins@intertec.com.