Channel Partners

December 1, 2000

7 Min Read
Intellectual Capital

Posted: 12/2000

Intellectual Capital
Bob Annunziata: ‘A True Visionary’
By Kim Sunderland

Following a surprise departure as CEO at Global Crossing Ltd. (www.globalcrossing.com)
in March, Robert Annunziata landed with two other startup ventures this year,
PF.Net Communications and Coreon.

Vital Stats

The telecom veteran–a founder and former CEO of Teleport Communications
Group Inc. (TCG), an original U.S. CLEC now owned by AT&T Corp. (www.att.com)–is
again feeding his passion for turning small companies into big ones, he says.

"When I got there [in 1999], Global Crossing had an infrastructure and a
plan, and I was able to execute by bringing Frontier [Corp., www.frontiercorp.com]
and some other acquisitions on board," Annunziata told PHONE+ earlier this
year. "So that’s what I have to do now" at PF.Net and Coreon.

It is just that type of business acumen that has earned Annunziata the second
annual PHONE+/ASCENT Telecommunications Competition Award. The award recognizes
people for their successes through outstanding ethical, leadership and
professional skills, including the application of entrepreneurial vision, and
strategic planning and organizational zeal in the telecommunications industry.

"I’m really very flattered," Annunziata says. "It’s marvelous
to be considered to receive this award and to be recognized as someone who has
changed the business in telecommunications."

Ernest B. Kelly III, president of the Association of Communications
Enterprises (ASCENT, www.ascent.org), says
Annunziata "is in the middle of a rich and varied career as a true pioneer
in the field of competitive communications. So far his experience includes
leadership and innovation in the provision of broadband, data, Internet and
long-distance services with some of the biggest names in our industry."

Annunziata, 52, has spent more than 30 years in the telecom industry. During
his 13-month tenure with Global Crossing, the company grew to become the world’s
first global fiber optic network, offering a full range of Internet, data and
voice services, with annualized revenues of $4 billion. Employment grew from 150
to more than 14,000 people.

Before that, Annunziata spent 15 years as chairman and CEO of the Teleport
Communications Group, the nation’s first and largest CLEC. Under his leadership,
TCG grew its revenues to $1 billion before being acquired by AT&T in 1998
for $11.3 billion.

"Among a mountain of industry achievements, what he is probably best
remembered for is his multiyear guidance of TCG," Kelly says. "At the
time the company was sold to AT&T, it had installed 10,000 miles of fiber
and 50 local switches in 85 major U.S. metropolitan areas–a remarkable
achievement.

"A true visionary in every sense of the word, it is easily
understandable why many industry observers call him ‘the father of local
telephone competition.’"

This reputation is exactly what PF.Net and Coreon executives know Annunziata
brings to their companies.

Annunziata says he was first approached about the PF.Net chairmanship by one
of the company’s venture funders, Odyssey Investment Partners LLC (www.odysseyinvestment.com).
Odyssey chairman Stephen Berger called shortly after Annunziata announced his
departure from Global Crossing.

Berger knew Annunziata from his Teleport days. Annunziata says he heard
Berger out, but didn’t commit himself at first.

"It took a while," he says. "The more I looked at their
network, and analyzed the industry and what I wanted to do, the more I thought
it was a good idea. Plus, the association with Koch Industries [Inc., www.kochind.com
] is encouraging. I met Joe Moeller, president of Koch, and we hit it off. [Koch
executives] were regular, straight-shooting people, interested in building
value."

Koch, which owns a third of PF.Net, is a privately held energy, agribusiness
and financial services company whose venture arm, Koch Ventures Inc. (www.kochventures.com),
invests in similar companies. Koch contributes pipeline rights of way to PF.Net,
and provides construction expertise in the form of Koch managers–pipeline
construction veterans who will supervise the construction of parts of PF.Net’s
network.

PF.Net uses that network to offer other carriers wholesale dark fiber,
point-to-point broadband services, packet-based data services, outsourcing and
collocation services. The services resemble those offered by Annunziata’s former
employer, Global Crossing, and other carriers such as Qwest Communications
International Inc. (www.qwest.com), Level 3
Communications Inc. (www.level3.com) and
Williams Commu- nications (www.williamscommunications.com).

Annunziata thinks there is plenty of business to go around though. PF.Net, in
fact, won a sizable contract from AT&T earlier this year.

"It’s the third time in my life that I’ve heard people say there is a
[fiber] glut, and yet we always seem to run out," Annunziata says.
"There are new applications–I don’t believe you can ever have too much
fiber. Second, with certain applications, it’s cheaper to waste fiber than to
multiplex electronics."

Annunziata joined Coreon as chairman in August. The company provides
end-to-end operations, systems and services for telecom carriers in emerging
service areas and for newer CLECs offering data, voice, cable, wireless and
other services to business consumers.

"No one but Coreon has so well addressed the technological and systems
support needs of carriers attempting to make the rapid shift into the converged
services and other emerging telecommunications markets," Annunziata said
following his appointment. "No one but Coreon has assembled the team, the
intellectual resources and vision that make possible its complex technical and
operational capabilities for service creation, provisioning and network
operations."

Coreon was started in 1999 through a venture of law firm Kleiner Perkins
Caufield & Byers (www.kpcb.com). The
Coreon team has extensive experience in developing, deploying and supporting new
services in actual operational settings. Examples include SONET & DWDM
Hybrid Fiber Coax, local and long-distance ATM, local and long-distance frame
relay, managed router service, and a host of others.

"With his proven record of building successful, high-growth companies,
as well as his experience with multiple carrier business models, Bob possesses
unique insight into how Coreon can help solve critical operational bottlenecks
and vastly improve time to market for new services," says Vinod Khosla, a
Coreon board member and a partner with Kleiner Perkins Caufield & Byers.

Coreon is preparing to roll out the core components of its OSP business
model. "It’s a groundbreaking model and an edge business–exactly where I
like to be," Annunziata says.

Also this year, Annunziata joined the board of directors of one of the
leading wholesalers of IP telephony services, PointOne Telecommu-nications Inc.
(www.point-one.net) in Austin, Texas.

He calls it an exciting company with a very strong management team–one
that’s in the right space with packet switching and VoIP. PointOne has the right
vision of where the market is heading, he says.

Packet switching and VoIP provide the most cost-effective network, Annunziata
says. PointOne, which is putting in place a 100 percent digital packet network,
is therefore in a great competitive position, he adds.

Being in the right place at the right time also puts Annunziata in familiar
territory–helping PointOne grow. PointOne’s biggest challenge, he says, is
execution, which is a challenge for any startup.

Smart management at any company anticipates growth needs and resource
requirements, Annunziata says. Every company must envision where it’s going to
be in the next year and have all the resources in place to support that
movement, he advises.

The real success, financially, is to make sure a company doesn’t spend more
than it must to provide services, Annunziata adds.

He says this year was sobering for competitors who faced a tight financial
market, but adds that he sees 2001 as a year in which all companies can win.

"But you still have to pay attention to the fundamentals and meet the
financial and services expectations for customers and investors," he says.

Annunziata has received numerous awards, including recognition as one of
PHONE+ magazine’s Most Influential People in Telecom in November 1999.

Kim Sunderland is Washington bureau chief for PHONE+ magazine.

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