Big Dig KOs Light Reading

Allegiance Telecom Inc. (Nasdaq: ALGX) is blaming construction workers in the Boston area for crushing an entire fiber duct belonging to the service provider Tuesday, causing massive disruption to hundreds of businesses up and down the eastern seaboard.

Allegiance, a national local exchange carrier (NLEC) serving 36 states across the U.S., initially blamed Level 3 Communications Inc. (Nasdaq: LVLT) for the outage, which disabled Light Reading -- and its sister publications Byte and Switch, Unstrung, and Boardwatch -- for most of the business day. The Boston Globe Website was also down all day, as was Infonetics Research Inc. and many other firms in the Boston area.

After a day full of finger-pointing, Allegiance finally admitted that the problem was theirs to solve and explain. "It turns out it wasn’t Level 3, or MCI, or Genuity Inc., as we had initially thought, but a giant piling that fell on our mega POP at 450 D Street in Boston,” says Jerry Ostergaard, director of public relations at Allegiance. The piling apparently cut four OC48 links.

Ostergaard was unable to confirm who was responsible for the damage. “They are saying it’s an outside contractor working on the Big Dig, but we aren’t sure.” He was also unable to say when the fiber cut is likely to be repaired. “It could be another couple of hours,” he said at 2:30 P.M. EST. [Ed. note: Light Reading came back online at 5:15 P.M. EST.]

Boston is in the process of building a vast underground roadway system, known as the Big Dig, which is costing billions of dollars (the latest estimate is $14.6 billion for the 7.5-mile highway) and has been responsible all manner of chaos in the Boston area, for which some have nicknamed it "The Road to Hell."

The outage will no doubt cost Allegiance big bucks, and the service provider is already in financial hot water. "A big swath of people have been affected by this," says Kevin Mitchell, an analyst with Infonetics Research. "It’s not good timing for the company."

Allegiance was supposed to reduce its loans to an agreed $645 million by April 30, but it failed to do so. Miraculously, it won a reprieve from its lenders, which extended the deadline until May 15.

"They are in a tight spot -- after paying $5 million to extend negotiations with the bank for this extra time, it still doesn’t look good,” says Cannon Carr, an analyst with CIBC World Markets. “It’s very difficult to do, but it’s in the banks’ best interests to make this work, as it’s not clear how much the company is worth at this point.” He adds that a likely possible outcome is a bankruptcy filing.

Allegiance’s share price rose 14 percent today, reaching $0.35.

— Jo Maitland, Senior Editor, Boardwatch

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Paul Andrews 12/5/2012 | 12:04:35 AM
re: Big Dig KOs Light Reading Too bad they didn't design in sufficient redundancy in their network to make this a non-event! Sounds like they gambled it wouldn't be needed. Unfortunately, what can go wrong does go wrong.
God 12/5/2012 | 12:04:34 AM
re: Big Dig KOs Light Reading Four OC-48's out of service and the majority of their customer goes dark.

Good job guys! You deserve to go bust
OptixCal 12/5/2012 | 12:04:31 AM
re: Big Dig KOs Light Reading About the only thing this tunnel in Boston has dug into are the pockets of the residents there. And now, some ham-handed crain or backhoe operator after a meatball sub and beer, has possibly helped another company into the bankruptcy courts...why n ot just move Boston to Worcester and expand that?
gea 12/5/2012 | 12:04:30 AM
re: Big Dig KOs Light Reading "...but a giant piling that fell on our mega POP at 450 D Street in Boston..."

If it really was the POP that got squashed then there was probably nothing that could be done...that backhoe operator will be roasted over the coals in court. If it was merely a fiber duct, then SONET APS should have kicked in and ALGX deserves to go bankrupt.

So..what was it?
optical_man 12/5/2012 | 12:04:26 AM
re: Big Dig KOs Light Reading Allegiance has 1 more day (5/15) to fix their debt.
I've been in the building. Hermann Miller Aeron (sp?) chairs for miles. Plus, they moved into a high dollar Dallas building. Correction, not A brand new building on some of the most expensive real estate in Dallas, but TWO buildings. (brand new buildings, ultra high tech and beautiful) under 2 years ago. If I was trying to build a national CLEC, I would use the Southwest Airlines model, instead of the Allegiance model, from what I witnessed of the digs.
Correct me if I'm wrong, but isn't Allegiance the last of the "NFL city CLEC"'s still not in bankruptcy? Is their mojo better than the rest? Or is it the banks trying to get 'something' out of the ashes that allows Allegiance not to face the judicial piper.
Of all the NFL city CLEC's that launched in the heyday only this one survives. At least until the 15th.
5/15 is close, time will tell.
lasso 12/5/2012 | 12:04:24 AM
re: Big Dig KOs Light Reading ... and strangely, productivity in the optical networking industry increases!
particle_man 12/5/2012 | 12:04:23 AM
re: Big Dig KOs Light Reading One crummy little fiber duct gets squashed and you are out for hours. You guys of all people ought to know enough to ask for route diversity from your hosting provider.

ummm you do believe in spending a bit more for QoS don't you?

rjmcmahon 12/5/2012 | 12:04:22 AM
re: Big Dig KOs Light Reading One crummy little fiber duct gets squashed and you are out for hours. You guys of all people ought to know enough to ask for route diversity from your hosting provider.

ummm you do believe in spending a bit more for QoS don't you?

Giving more money to pigopolists only makes the problem worse. (Think of it like buying oil from the House of Saud. It may get us a tank of gas, but at what cost? See the end of the post for a rant about that.)

The preferred solution for high availability is to make bandwidth extremely cheap while distributing compute and data such that individual or group network outages matters not. Remember, designing for an H-bomb rather than a faulty telco congestion model will allow one to survive in the 21st century.


It is really sad that Dubya invites these so-called Saudi "Kings" to his home in Crawford. But when Dubya visits the leading technology center in the world, he neglects to speak to any of the the country's real leaders. Instead Dubya choosed safety by only visiting one of Daddy's companies that, for all practicle purpose, stopped creating jobs at least a decade ago. This shows poor judgment and weaknesses of the son who inherited a throne. Birds of a feather flock together seems to appropriate these days.

Anyway, back to the Saudi issue:


King Abdul Aziz bin Abdul Rahman Al Saud (known as Ibn Saud) was a tall, imposing figure, a natural leader of men. He knew instinctively how to judge men and, as his rule progressed, how best to exploit the natural resources of his country for the benefit of his people.

And for some of those so-called benefits, as reported from our US Department of State:


Saudi Arabia is a monarchy without elected representative institutions or political parties. It is ruled by King Fahd bin Abd Al-Aziz Al Saud, a son of King Abd Al-Aziz Al Saud, who unified the country in the early 20th century. A 1992 royal decree reserved for the King exclusive power to name the Crown Prince. Since the death of King Abd Al-Aziz, the King and Crown Prince have been chosen from among his sons. Crown Prince Abdullah has played an increasing role in governance since King Fahd suffered a stroke in 1995. The Government has declared the Islamic holy book the Koran and the Sunna (tradition) of the Prophet Muhammad to be the country's Constitution.

The Government's human rights record remained poor; although there were some improvements in a few areas, serious problems remained. Citizens did not have the right or the legal means to change their government. Security forces continued to abuse detainees and prisoners, arbitrarily arrest and detain persons, and hold them in incommunicado detention. Security forces committed torture. In 2001 the Council of Ministers approved a new law regarding punitive measures that would forbid harming detainees and to allow those accused of crimes to hire a lawyer or legal agent. On May 1, the new Saudi Criminal Procedural Law went into effect. Prolonged detention without charge was a problem. Security forces committed such abuses, in contradiction to the law, but with the acquiescence of the Government. The Mutawwa'in continued to intimidate, abuse, and detain citizens and foreigners. Most trials were closed, and defendants usually appeared before judges without legal counsel. The Government infringed on citizens' privacy rights. The Government prohibited or restricted freedom of speech, the press, assembly, association, religion, and movement. However, during the year, the Government continued to tolerate a wider range of debate and criticism in the press concerning domestic issues. Discrimination and violence against women, discrimination against ethnic and religious minorities, and strict limitations on worker rights continued.

The Government viewed its interpretation of Islamic law as its sole source of guidance on human rights and disagreed with internationally accepted definitions of human rights.
FatherTime 12/5/2012 | 12:04:20 AM
re: Big Dig KOs Light Reading uhh... Thanks. We are much better informed now.
Buddy_Lite 12/5/2012 | 12:04:19 AM
re: Big Dig KOs Light Reading We're ALL paying for the mess in Beantown. This is a federally funded project.
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