Communications Carriers Try to Make New Connections

By eweek  |  Posted 2001-11-05

Its been an interesting year for communications services. Many companies got better connected to their customers, others managed to hold the line and some, unfortunately, got hung up.

It should come as a surprise that during the period described by many as high-tech nuclear winter, big telephone companies had a field day. Revenue from old boring telephone services helped prop up regional Bells like BellSouth, Qwest Communications International and Verizon Communications, which seem to be the in elite minority of companies still expanding networks, making acquisitions and launching services.

For the big three long-distance companies, business services were king, with AT&T, Sprint and WorldCom launching one initiative after another aiming to cash in on enterprise networking needs with new services. Of course, this was a year when virtual private networks were new again.

And this was a year when Internet telephony lived up to its hype –- although it wasnt easy to pull off. Many vendors servicing the space had to merge to stay competitive, including NetSpeak, which cut a deal with Adir Technologies. But this is a story that seems to be ending well: Qwest dropped a bombshell in early fall announcing it plans to make all of its traffic Voice-over-IP during next five years. Pundits believe this is a turning point for VoIP industry.

On the Internet service front, AOL Time Warner, EarthLink and Juno Online Services worked out a way to share AOL Time Warners cable network, giving end users a choice of several service providers with a cable modem service. Consolidation continued: EarthLink acquired OneMain and Juno merged with archival NetZero.

Other Internet services, however, were hammered.

Cable companies that went into cable modem business and alternative carriers capitalizing on DSL hit tough times. Of the three major ISPs whose businesses were based on DSL offerings, Covad Communications filed for Chapter 11 bankruptcy protection and Rhythms and NorthPoint Communications put assets up for sale. These dynamics are blowing the wind of hope into the sales of satellite-based broadband providers. EchoStar Communications partner broadband ISP StarBand Communications got the Interactive Week/The Net Economy Interops award for most innovative ISP, not a small feat and a recognition satellite broadband future may be grander than initially assessed.

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