Newspaper article THE JOURNAL RECORD

Williams Battles Overbuilt Perceptions

Newspaper article THE JOURNAL RECORD

Williams Battles Overbuilt Perceptions

Article excerpt

TULSA -- Telecom executives and consultants have declared war on the biggest enemy of U.S. companies with expansive fiber-optic networks: a perception that they overbuilt.

Earlier in the year, investors jettisoned telecom stocks and shied away from debt securities amid talk of a bandwidth, or capacity, glut on networks that carry phone calls, Internet transmissions and video.

Stock prices plunged, several companies declared bankruptcy and others cut workers as losses mounted.

But Howard Janzen, chief executive of Tulsa- based Williams Communications Group, said there is no overabundance of unused capacity.

"We're standing right on the edge of moving from a relatively small oversupply of bandwidth to what I think is a shortfall," Janzen said Friday.

Any overcapacity could soon vanish because of a lack of new investment in expensive equipment needed to activate, or "light" each hair-sized glass fiber capable of transmitting thousands of signals at once.

Companies could then be hardpressed to expand with limited capital available from skittish investors.

Williams operates a 33,000-mile network connecting 126 U.S. cities. Thursday and Friday, it hosted a seminar -- "Broadband University" -- aimed partly at refuting notions of an oversupply.

Its shares dropped from above $40 over a year ago to just above $2 because of the perceived glut.

Williams customers include long-distance carriers, Internet providers and television networks that pay the company to transmit their signals over its network.

That allows customers to avoid spending billions building or expanding their own networks at higher costs.

With capital scarce, some network operators have been unable to activate more of the fibers while signal traffic keeps growing, Janzen said.

Buying and installing the optical equipment to transmit and receive signals on the fibers costs 10 times more than installing the fiber itself, said Russ McGuire, an industry consultant at TeleChoice in Tulsa. …

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