1. Industry Intelligence Alert – Celebrating October
October is a special month. It is the bridge between summer and winter, neither too hot nor too
cold with bright fall colors contrasting the shorter days. October marks the beginning of the fourth
quarter, a last chance to set things right for the past year and lay the groundwork for the upcoming
year. October is notable for Baseball’s World Series, although no one outside of California seems to
be paying much attention to that this year. Foremost, though, Halloween happens on the last day of
October, and this year, particularly in the Telecommunications industry, Halloween has more
meaning than ever before.
If there was ever an industry for which Halloween was a suitable metaphor, Telecommunications in
2002 is it! All of the usual characters have a role including zombies, ghouls, vampires, monsters, and
more than a few skeletons in the closet. Instead of children going door-to-door begging for treats,
we have the RBOCs putting on their scariest costumes (depicting no less than the apocalypse) and
knocking on the doors of regulators and legislators alike, in search of UNE relief and threatening
with tricks of further layoffs, reduced capital spending, and economic catastrophe if they don’t leave
the porch with bags full of the regulatory relief goodies they demand. AT&T and Worldcom,
meanwhile, without any investment in costumes, are grabbing the candy out of the RBOCs bags and
keeping it for themselves.
Really scary big kids, whose goody bags overflowed a while ago, are roaming the streets as well,
dressed up as former CEOs and Corporate officers wondering where the good times went and
feigning ignorance as to how their stomach aches were caused. Some of these big kids (hey, isn’t that
Leo Hindery?) are still trying to find some more of the stuff they say they are entitled to have while
Gary Winnick is offering to dump some of his candy back into the otherwise empty bowl and share
it with the other kids (maybe to keep his own house from being egged???). Firms rising up from the
graveyard this month included Birch, FLAG, Williams, and ICG Communications, and the dirt over
360 is starting to stir so they may join the party by the end of the month as well.
Here’s a brief rundown of some of the other players roaming the streets this year:
Vampires: The numerous legal firms looking to suck the blood out of the industry through class
action suits designed, in reality, to provide benefits primarily to the law firms while offering
thin hope of return to the forlorn shareholders.
Zombies: Chapter 11 graduates who, while having cleansed themselves of fatal debt, still have a long
way to go to become profitable and truly walk among the living. In the meantime, their
market share seeking offers of markedly lower prices serve to drain the life out of the living
and continue the industry’s existence in the shadow world.
Ghouls: “Savvy” investors and industry players scanning the balance sheets of dead (or soon to be
dead) companies, looking for viable assets or lines of business to rip out and ingest.
Undead: Companies living in the nether world of bankruptcy protection, hoping for resurrection (to
at least zombie status), but living in fear of the ghouls (and bankruptcy trustees) looking to
feed the demands of secured creditors with maybe a little left for unsecured creditors (and
rarely) common stockholders.
Frankenstein’s Monster: A being built from the body parts of multiple cadavers. Sounds sort of like
Cogent when you think about it.
©2002 Universal Access, Inc,
all rights reserved

2. Re-animators: The “vulture” capitalists waiting to breathe new life into the dead through the
infusion of small amounts of the elixir of life (a.k.a working capital).
Resurrected: These fairy princesses of the celebration roam the streets without a care, their debts
cleansed through Chapter 11, their customer bases intact, and the opportunity to be net
income positive looming large since paying off the interest and principal associated with
constructing their network assets is no longer an issue.
Meanwhile, some of our players have changed their costumes over the past year or so and look
somewhat different than they did on previous Halloweens:
Original Company Acquiring Company
360 Networks (UK) Telia
@Home Networks (AtWork assets and
customers)
New Edge Networks
Advanced Radio Telecom First Avenue Networks
Allied Riser Cogent
Applied Theory (managed hosting business) Clear Blue Technologies
Applied Theory (Network & ISP business) FASTNET
Broadband Office Yipes!
Cable & Wireless (US Voice Business) Primus
Cable & Wireless (US off net, frame, & ATM) New Edge Networks
Colo.Com BJK Investments (ClearBlue Technologies)
Ebone/Global Telesystems KPN Qwest
Electric Lightwave Citizens Communications
e.spire Xspedius
Exodus Cable & Wireless
GST Time Warner Telecom
Iaxis Dynegy
Intermedia (ISP & Backbone) Allegiance
International FiberCom General Fiber Communications, Inc.
KPNQwest - France Telia
KPNQwest – Germany Data Network, UK Data
Network, select undersea cables
KPN
KPNQwest Interoute (select city rings)
KPNQwest - Netherlands KPN (selected Dutch network assets)
KPNQwest Antel Holdings, Ltd (central European Ebone
assets)
McLeod (Dial Up ISP assets/SplitRock) Level3
Net2000 Cavalier Telecom & Broadview Networks
NetRail Cogent
Network Access Solutions Corporation DSL.net
Network Plus Broadview Networks
NorthPoint AT&T
OnSite Access Cogent
PSINet Cogent
PSINet Canada TELUS
PSINet Japan Cable & Wireless
PSINet Europe Israel Corp. (ILCO.TA) and ClearBlue
Technologies Holdings Limited
RCN (off-net customers) Broadview Networks
Confidential - For Universal Access Internal Use Only

3. Reon Broadband Conversent Communications
Rhythms Net Connections Worldcom
Sphera Optical networks OnFiber
Star Telecom IDT (long haul IRU’s and equipment)
Storm Telecommunications (UK) Wavecrest Communications
Telergy (long haul assets) Dominion Telecom (long haul assets)
Telergy (NY Metro Assets) Con Ed Communications
Telseon OnFiber
Winstar IDT
Yipes PHX Communications (buy-out group of former
investors)
Zephion Networks Masergy Communications
Source: Universal Access Research
Beyond the costumed trick-or-treaters roaming the streets, we have other players including worried
onlookers who are hoping that the mayhem stays confined to the celebrants; and the end users -
enterprises, governments, and consumers - who are going from door-to-door demanding more and
more bandwidth to do their jobs, increased reliability from networks beginning to be stressed by
constrained capital and decreased investment, and some assurances of service continuity from an
industry where the names of players change every day.
Just as the safety organizations publish annual advisories on how to have a safe and fun Halloween,
Universal Access has a few tips for both the monsters and the trick or treaters alike:
1. Don’t go trick or treating in strange neighborhoods. Off-net is a really scary place, and even
more so during this year’s industry Halloween. If you need to go outside your own turf, go with
someone who knows the geography and can minimize the opportunities for danger. Universal
Access is the expert at off-net provisioning and management and makes for a really good friend
to have on those unfamiliar streets in the dark October night.
2. Carry a flashlight. To keep from getting lost or hurt, it’s important to know where you are going
and be able to clearly see the path ahead. Lattis, WebQuote and QuickQuote are all tools to
enable quick and accurate understanding of the true market dynamics of cost and availability and
maximize the visibility into what the market has to offer.
3. Approach only houses that are lit. As companies cut back their presence to manage their capital,
assets go dark. The information in the UIX is a comprehensive resource for understanding who
goes where, and who is still a viable provider of services.
4. And finally, don’t run out of candy (or working capital). Conserve your assets by utilizing our
UTX facilities to cost effectively extend your network in a timely manner.
10/24/02 raf
Let’s make this a safe and healthy Halloween!
Confidential - For Universal Access Internal Use Only