Richard WrayJuly 11, 2002
The global communications industry is in turmoil. Dubious accounting practices, profit warnings and corporate collapses have destroyed the confidence of the financial community in companies that painted themselves as the pick and shovel merchants of the dotcom gold rush - guaranteed to benefit what ever happened.
The fear is that the dramatic collapse of some of the companies that control swathes of the internet will cause the global information superhighway to resemble the M6 motorway at rush hour on a Friday night - traffic crawling at a snail's pace with nothing able to get either on or off.
The industry experts say this will not happen, but there is the potential for a dramatic change in the way the UK's 11m households with internet connections experience the web. The future of US giant WorldCom is in doubt after it revealed the largest corporate fraud in US business history. The Mississippi-based company owns UUNet, one of the original pieces of the web. It carries about half the world's emails, and 70% of all emails sent in North America zip through its vast fibre optic network every day.
This side of the Atlantic, Dutch rival KPNQwest has already started shutting down after running out of cash in May. Its data network, called Ebone, stretches across the continent and transports roughly a quarter of Europe's internet traffic. With two such key players in the internet facing possible extinction, European websurfers fear a return to the days of the world-wide wait as web pages get snarled up on the network - or worse, the internet goes dark.
But the internet is more resilient than the doom-mongers predict. Last week, the new chief executive of WorldCom, John Sidgmore, who used to run the company's internet operation UUNet so should know a thing or two about the business, said he did not see "any significant chance of the UUNet network going dark under any circumstance". "I am as confident as I can be that customers are not going to wake up and not have service. I really just don't believe that's possible," he said. Part of the reason for his confidence is that the company's customers include some of the US federal government's largest agencies, not least the Department of Defense and the Department of State.
This side of the Atlantic, Stephen Timms, the new e-commerce minister, also reckons that everyday consumers will not see the internet collapse merely because a US company has been found to be cooking the books. "This is not a flash in the pan. This is where the economy is going and that will continue. I certainly watch very closely what is happening to WorldCom but I do not think that is going to have much impact on users who will continue to increase the extent to which they are using these technologies and the extent to which their businesses depend on them," he said. One of the reasons that many in the industry believe consumers will not see a major degradation of service, is linked to the very nature of the internet. There is an old - in online terms - idea that the internet was created so the US military would still be able to carry out basic communications activities in the event of a nuclear war.
As with most ideas, this is in part true. The US department of defense (DoD) was one of the original sponsors of the Arpanet programme in 1969 which helped link universities, research labs and - crucially for the DoD - institutions in Nato countries to a wide area network. The protocols and technologies that the original handful of scientists produced to operate that network have enabled the internet to withstand various shocks in its history. To understand why the removal of some networks will not cause the entire internet to collapse it is necessary to understand two things: how the internet is constructed and how the modern internet industry has evolved. When a dial-up, broadband or corporate internet user makes a connection to the internet it is done through an internet service provider (ISP). They take the call from the local telephone exchange - or direct from the premises in the case of businesses - and route it through their network to their nearest point of presence (PoP) on the internet backbone, a vast network of interconnecting fibre optics.
Once at this point the ISP is able to navigate a course through the web using a technological specification known as border gateway protocol version four (BGP4). This protocol enables dynamic routing of internet traffic through what are termed domains - communications systems that form the internet backbone, such as large communications networks, internet service providers and even the systems of large companies.
BGP4 is the internet equivalent of an airline ticket: the system knows where you want to go and if the destination cannot be reached in one flight through one domain then connecting flights will be arranged. The connections between these domains can be on an international scale through National Access Points (NAPs), on a national level through Local Access Points (LAPs) or by two domains connecting directly to each other. "If the route disappears the protocol allows for another route to be found," explains Mike Galvin, head of customer service and operations at BTOpenworld. "The way the protocol works is that everybody has a table of who else they talk to so if you want to talk to someone you have no direct connection with you know who to call on."
"A typical link to a busy site in the US might go through half a dozen domains." So plotting the progress of an internet connection between the UK and, say, the University of California would involve several networks. There is the initial dial-up connection through the local phone line (usually BT), to the local telephone exchange. Sometime after the exchange the call is captured by the ISP's own network provider - such as Energis or BT again - and taken to the ISPs PoP on the internet. From there it's a short trip through a transatlantic cable - perhaps using the same network or maybe WorldCom's MCI unit or C&W - to the US. The connection is then picked up by a US operator, probably the University's ISP such as one of the local Bell operating companies. BGP4 negotiates with all of these networks along the way and calculates the best possible route. If any network is suddenly switched off, the dynamic routing capability of the internet looks for alternative means to get the connection to its destination.
This complex architecture of the internet illustrates the second reason why many in the industry are confident that web users will not suddenly be left out in the cold. Most ISPs have connections with more than one communications network and all of the network operators have built more network than they need. There is a capacity glut in the market. For instance, industry experts estimate that less than 10% of Europe's optical fibre network is actually being used. The point is proved to some extend by the failure of KPNQwest to sell its Ebone network to anyone. If the network really was so important to the internet in Europe why did no one want it?
Richard Elliott, chairman and co-founder of Band-X the independent trading platform for buying and selling different types of telecom network capacity, reckons the answer is simple - network operators are waking up to the fact that "there has been a monumental overestimation of the size of the underlying market."
The communications market has been obscured by new carriers arriving on the scene and buying up or building new capacity. Communications companies have built or bought more than they needed because of over optimistic expectations about growth in internet traffic. In the current financial climate investors do not want to see companies squandering their money on networks that are not being used. That is why some communications companies have been dabbling in a practice known as hollow-swaps where they exchange capacity with other networks and book the deal as a sale even though no traffic actually passes across the network. The ending of such practices - not least because the regulators both sides of the Atlantic will no longer stand for them - should leave the remainder of the internet industry in a much better position because it will have to stand on its own two feet. "There is a lot of overcapacity and this rationalisation process might end up leaving the remaining companies even stronger," according to the UK head of ISP Tiscali Sirgio Cellini. His message to residential internet users is "don't panic" the internet will survive.
In practice, the greatest threat to the smooth operation of the internet is likely to come from the same quarter as it has in the past - too many people trying to log on to one specific site. While the swarm of internet users who tried to log on after September 11 caused problems in some areas it was actually nothing compared with the publication of the Starr report into Bill Clinton's dalliance with Monica Lewinski. In the UK one of the most recent bottlenecks was caused by people logging onto internet sites that gave details of the recent solar eclipse in the west country, according to Mike Galvin. "There have always been big events on the internet. I do not think a year has gone past when there have not been major changes in backbone companies, new businesses coming in and old ones going bust. Through all of this the internet has survived." And it is likely to survive this current crisis.
http://www.guardian.co.uk/Archive/Article/0,4273,4458665,00.html
