Surviving telecom’s Jurassic Age

(Upstart) Not too long ago, I spoke with Vern Fotheringham, the brilliant founder of such swashbuckling Seattle start-ups as wireless CLEC Advanced Radio Telecom and IP-based ASP Bazillion . He described the current climate of the new century’s telecom industry this way: “The furry little rodents of the digital new wave are in there eating the dinosaur eggs of the legacy obsolete systems…My fear is that we furry little rodents get crushed when the great big obsolete dinosaurs catch a virus we were packing, and when they fall down dead, they kill us too.” I have absolutely no idea what that means, and frankly, if I did, I wouldn’t waste my time writing online columns for $8 a pop.

But doesn’t it seem like there’s something of a furry-rodent virus going around? CLECs, DLECs and ISPs alike are amputating their operations left and right and declaring bankruptcy. Some of the most recent examples: New England DSL jockey Digital Broadband Communications laid off 85% of its workforce on Friday. Before the day was over, 2nd Century Communications laid off half of its remaining employees (110 people) and closed eight of its 13 regional offices. Rurally focused ICP FairPoint Communications announced yesterday that it would eliminate 365 jobs and close two southern operations centers and 15 sales offices.

But the rodents only seem to be killing themselves while the dinosaurs keep charging along. SBC and Verizon stocks have, for the most part, been on the upswing since late August. AT&T may have caught some kind of bug, symptomatically splitting into four creatures that—if not necessarily small or rodent-like—at least resemble the awkward hirsute kid from Land of the Lost. Ma Bell definitely caught hell trying to deploy cable Internet service nationwide, and at last count, the company had accumulated $62 billion worth of debt, forcing it to sell parts of the company to Japanese wireless carrier NTT DoCoMo. And don’t get me started on WorldCom.

But—to trample this already mangled metaphor some more—rodents have found a bigger killer than falling dinosaurs. While they were keeping their eyes on the T-Rex, they didn’t notice they’d eaten all the eggs. So the rodents are eating each other now. Eventually most of them will starve. And after that, the dinosaurs will go back to laying eggs. And the few rodents that are left will go back to eating them.

At least, that’s assuming I understand Fotheringham’s analogy correctly. Tomorrow, he’ll probably call me up and say, “You fool! I wasn’t making an analogy! I was talking about ACTUAL dinosaurs!”

Senior Writer Ed Gubbins likes his dinosaur eggs poached, with a side order of bacon. Drop him a line at ed_gubbins@intertec.com, or stir up some trouble at the Competitive Challenges forum.