DSL

DSL Prime News Briefs: People

DSL Prime covers the latest deals (few), personnel changes (many because it's that kind of market), and stock market notes (many). Most interesting, perhaps, is the NorthPoint investment. . .

by Dave Burstein DSL Prime [August 30, 2001]

Deals

• Nightfire software has added El Paso Global Networks to the customer list.
  
  
• Japan's NTT-ME went to Tut for a VDSL basement DSLAM.

People

• Jason Krause and Aaron Pressman of the Standard have been two of telecom's best reporters. Pressman outdid the Washington Post getting the real stories from D.C.
  
  
• Paul Keeler, late of Morgan Stanley, has joined the board of DSL.net, encouraging news in their search for capital.
  
  
• The investments in Rhythms and Teligent are presumably why Michael Levitt has resigned from buyout firm Hicks, Muse.
  
  
• John Montford has moved from Chancellor at Texas Tech to senior VP at SBC, overseeing regulation and communication. SBC gets some of the worst press in the industry, partly because they refuse to give out any information of substance. The result is that the only stories are ones like the current Internet toll article, when they behave outrageously. I've suggested literally half a dozen stories—mostly positive stories—to them, to balance my coverage—they had some of the most advanced VoDSL trials in the world, for example—but could get too little information to write any up.
  
  
• Chris Hardman jumped from Rhythms to Qwest last month, where he is now Director, Corporate Media Relations. One of his first tough jobs was explaining why Qwest is charging for DSL service that wasn't working, when thousands of Qwest-supplied Cisco routers succumbed to Code Red. Pete Lewis in the Seattle Times broke the story, Joe Nacchio of Qwest is the most straightforward CEO in the business, answering questions honestly and fully. Nacchio's honesty has given Qwest the best press coverage in the business.
  
  
• Larry Plumb at Verizon has been the most effective of the telco PR people covering DSL, but with new duties is passing on the job to Bobbi Hennessey and Catherine Hogan-Lewis.
  
  
• John Luhtala led Monday's conference call, but he has resigned as CFO at Centillium, where Darrel Slack will fill in. "My decision to resign is a personal one. It's time to look for a fresh approach on how we look at Investor Relations. It's a matter of accountability." He deserves more credit than he gives himself; the market decline in general, and DSL stocks in particular, is why the price is down. Luhtala did a fine, professional job, and has kept the key analysts informed. CEO Faraj Aalei himself has been open and accessible. Other companies look for short term hype and manipulation, but that rarely pays off on the street. DSL chip vendors are followed by fewer than a dozen key analysts, all hard working. They have good memories, and while you can fool them occasionally, it will usually come back at you.

Stock market

• Angelo Gordon's $7.5M investment in the NorthPoint Verizon suit will net them 15 percent of the settlement amount (if settled) or 20 percent of the final judgment (if litigated in court), as well as 16 percent interest. If NorthPoint wins, provable damages are easily $600M and probably several times that. Means AG made a good move if NorthPoint has even a 1-in-10 chance when it gets to the jury. Not such a bad deal for NorthPoint, either—without cash.
  
  
• Qwest's stock is plummeting, because Morgan Stanley has been raising questions about their bookkeeping details. Dan Reingold of CSFB strongly disagrees, "Q shares now reflect a contagion of fear that is far disproportionate to reality." As always, I'll let the pros argue the stock price. I have also looked at Qwest's accounting, and found it less egregious, for example, than SBC's.
  
  
• Centillium jumped 17 percent on Monday, after announcing that large Japanese orders will boost their results later this year. Faraj spoke strongly about problems he anticipates will be caused Yahoo Japan's Annex A.
  
  
• Ikanos raised a $25M round to bring their chips to market. They've released few details, but they look to bond multiple lines for higher speeds.
  
  
• Copper Mountain's 10Q reported "Net revenue decreased from $80.2 million for the three months ended June 30, 2000 to $6.1 million for the three months ended June 30, 2001. Sales to our four largest customers for the three months ended June 30, 2000, NorthPoint, Rhythms Netconnections, Lucent, and Mpower Communications decreased from $11.5 million, $15.2 million, $23.4 million, and $12.4 million, respectively, to an aggregate of $3.0 million for the three months ended June 30, 2001." mPower was over 30 percent of current sales, Rhythms 18 percent. Nearly no revenue was recorded from AT&T or Sprint Canada. Both likely to need line cards in the future, a good sign.

We are journalists, not investment advisers; invest at your own risk and do further research.

Copyright 2001 Dave Burstein.
The DSL Prime Newsletter is reprinted with permission.

"The power of the printing press belongs solely to those who own the presses"
—A.J. Leibling

The Internet is the cheapest printing press ever invented.

1. DSL Prime News	4. Prime News Briefs: People
2. DSL Prime on Covad and Rhythms	>5. SBC's Nefarious Plan
3. Prime News Briefs: Technology	6. DSL Prime Editorial