Broadwing Starts Phasing Out Data Centers

Broadwing, a national voice and data communications carrier, is going
through with its previously announced intentions to close eight of 11 data
collocation facilities nationwide, a process that has caught some of its
customers flat-footed.

The Cincinnati Bell subsidiary has fallen victim to the aftermath of the
dot com collapse that started roughly 18 months ago, a decline in the
industry that led to Broadwing’s November
to consolidate its colo facilities into three main “hub”
centers (in Austin, TX, Cincinnati, OH, and Newark, DE), and cut 15 percent
of its employees.

The carrier giant, which has 18,000 thousand miles of fiber optic lines
strewn throughout the U.S. and connected to these data centers, is
apparently feeling the crunch as Internet-based companies either go out of
business or scale down their online presence.

While they own state-of-the-art facilities around the nation, giving
customers easy access to plenty bandwidth capacity, Broadwing’s facilities
face stiff competition from companies like WorldCom subsidiary UUNet , AT&T , Level 3 Communications
and Williams Communications .

Shane Kenny, president of Atlanta-based Internet service provider (ISP), Inc., said he got a call from his sales rep Friday morning
telling him the news for the first time. The news comes as a shock, he
said, considering the relative strength, or so he was told, of the
Cincinnati Bell-owned company.

“It kinda makes me mad, we had just moved out of NetRail, (a colo company
and ISP that filed for
Chapter 11 bankruptcy protection last year) and took a look at
Broadwing’s financials before we moved in,” Kenny said. “They said they
were going to be cash-flow positive in the summer of 2002 so we figured
they’d stay open, but there was just no demand for the colo space.”

He mentioned that at the facility in Atlanta (which Broadwing leases from
competitor Internap ), a building that spans thousands
of square feet of space for businesses to “park” their servers and other
Internet equipment, only 10 to 15 customers were using the space at the time.

That lack of demand makes it hard to keep operations going and still pull a
profit. It seems to be a decision reached to scale down Broadwing’s
money-losing operations to speed up their goal of cash-flow positive next
year. Last year, only 20 percent of the carrier’s revenues came from
Internet services.

Broadwing currently maintains facilities in Dallas and Austin, TX; Newark,
DE; Los Angeles and Santa Clara, CA; New York, Chicago, Atlanta, Boston,
Washington, D.C.

Broadwing officials could not be reached for comment on the imminent
shutdown or plans to help migrate their customers in affected areas to new

Kenny said his Broadwing contact mentioned there are a couple of options
available for the communications carrier. In Atlanta, he was told one
involves BellSouth or Internap buying up the facility and
Broadwing keeping a presence to maintain the facility.

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