BroadWing Takes Flight — But How High?

Posted: 01/2000

BroadWing Takes Flight — But How High?
By Ken Branson

"The world’s no longer driven by the big eating the small; it’s now the
fast eating the slow," says Rick Ellenberger, president and CEO of
BroadWing Inc.

Ellenberger believes that BroadWing (www.broadwing.com),
the newly launched amalgam of Cincinnati Bell Inc. and IXC Communications Inc.,
will be fast enough to chow down on big game. Cincinnati Bell, which Ellenberger
led before it acquired IXC for $3.2 billion in November 1999, was all dressed up
with no place to go–outside Cincinnati and its surrounding counties in three
states–before the merger. Now, with IXC’s 13,800-route mile, Internet protocol
(IP), fiber optic Gemini 2000 network touching 43 of the top 50 markets in the
United States, he thinks BroadWing will cause a stir in all the best places.

BroadWing will continue to market local residential service under the
Cincinnati Bell brand, Ellenberger says. For local legs outside Cincinnati
Bell’s old footprint, he says, it will rely mostly on partnerships with
companies that already have built networks in places BroadWing wants to go.

"We will use partnerships to deliver what we call the first mile,"
Ellenberger says. "We’ll use a series of opportunities … partner with
CLECs and DLECs (data LECs), do some smart builds with our own DSL capability,
which we’ve really mastered in Cincinnati."

Outside Cincinnati Bell-dom, BroadWing will offer integrated services to
small and medium-sized businesses first, and eventually to what Ellenberger
calls "the Fortune 1500." He considers BroadWing to be a likely
competitor in the short term for the likes of Williams Communi-cations Inc. (www.williams.com)
and Level 3 Communications Inc. (www.l3.com),
and eventually for AT&T Corp. (www.att.com)
and MCI World-Com Inc. (www.wcom.com). After
MCI WorldCom merges with Sprint Corp. (www.sprint.com),
Ellen-berger says, business customers will be even more keenly interested in
alternatives to the megacarriers.

"AT&T and MCI are saying they’re big and safe and reliable," he
says. "But I think there are a lot of companies who say, ‘I can’t rely on
safe and reliable to help me get where I want to go.’"

There are skeptics, however.

"They’re going to have to do some humongous partnering," says Mark
Zohar, senior analyst-competitive markets, Forrester Research Inc. (www.forrester.com).
"They’ve said they’ll have to resell wireless and partner with CLECs and
DLECs. Let’s face it, Cincinnati Bell was a small company–a good company, but a
small company. It would take an act of God to make them (BroadWing) a national
powerhouse."

Ellenberger is undaunted.

"If Zohar doesn’t think what we’ve put together is going to be in that
carrier-capable space, … well, I’ll be able to point back to this article and
say God was with me," he says.

Ellenberger points out that BroadWing has attracted financing–$910
million–since the announcement of the merger, and has a network used by many
major long distance carriers, an internal systems house in Cincinnati Bell
Information Systems, experience in offering local services and a committed,
experienced management team.

Courtney Munroe, director of business network services at International Data
Corp. (www.idc.com), agrees with Zohar that
BroadWing has some difficult flying ahead.

"They’ll (BroadWing) have lots of competition locally and regionally [in
CBI’s old territory], and it’s only going to be tougher nationally," Munroe
says.

Munroe believes integrated access is the key. Everybody will offer it, and
BroadWing will have to find some way to offer it first, faster, better or
cheaper than its many competitors.

Asked how he’ll know that the plan is working in, say, six months,
Ellenberger provides this list: branding, sales productivity, back-office system
integration and the quick negotiation of all those partnerships with CLECs and
DLECs. What keeps him awake at night, he says, is the fear "that I can’t
deliver with all I’ve been given."