Half the Internet in Bankruptcy

At the risk of jumping on an already sensationalized topic, we feel obligated to point out the technical repercussions inherent in WorldCom's recent bankruptcy declaration. Though there is much to grouse about politically and financially, it is important to note that the WorldCom bankruptcy could have a profound impact on the Internet.

After all, according to this CNN story, over half of the U.S. Internet traffic moves through WorldCom equipment, including 70% of the e-mail. In conjunction with other notable bankruptcies, such as Global Crossing, another of the world's largest telecommunications companies, and Exodus, the world's largest web site hosting company, the Internet would seem to be in a very precarious state.

It is noted that WorldCom also handles 50% of the e-mail sent world wide. However, it is not just international companies based out of the U.S. that make this a global issue as telecommunications companies across the planet are folding. Most notably, KPNQwest and its subsidiaries filed for bankruptcy just two months ago. KPNQwest handled over half the Internet traffic in Europe.

In rather ominous tones, the KPNQwest web site reads:

"During this week you can already expect outages to happen that we cannot solve any more. At the end of this week we expect that larger parts of the network will be down."

Nevertheless, it is important to note that, aside from sporadic issues arising out of the KPNQwest bankruptcy, Europeans have yet to experience any show stopping problems.

The Internet, conceived during the heyday of the Cold War, is meant to prevent outages -- even large scale outages -- in one section from affecting other sections. Specifically, if a piece of the Internet fails -- even half of the Internet -- the other half should remain relatively intact and functional.

This doesn't mean that the Internet will continue to function as normal for everyone. Should WorldCom simply close its doors (which isn't likely), a great number of companies could be cut off from the Internet until they could get connectivity from a WorldCom competitor. What is more likely in the near term is that WorldCom will continue to operate in bankruptcy. However, the problems it is experiencing and the solutions it is implementing (such as laying off 28% of its work force) will no doubt affect WorldCom's services and customer support.

Nevertheless, most analysts don't expect anything as drastic as the notices posted on the KPMQwest site. In fact, the KPMQwest web site was updated just this past week:

"Originally we planned to shut down the KPNQwest international backbone at the 19th of July. Since there is good progress with negotiations that can result in a restart of the business we have not shut down the network but left it unmanaged instead. However from now there is no staff available in the office to attend to customer issues. "

Though not exactly good news, this is no doubt encouraging for KPNQwest customers and Europe in general. Meanwhile, Global Crossing continues to operate in bankruptcy, and it appears as if WorldCom will be joining it.


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