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Optical/IP

Cisco-Backed Cambrian Is Bankrupt

Given the number of carriers funded by Cisco Systems Inc. (Nasdaq: CSCO) that have fallen on hard times, the term "Cisco-Powered Network" may be more of a warning label than an endorsement (see Cisco's Under-Powered Carriers ).

The latest Cisco network to have money trouble is Cambrian Communications LLC, the carrier owned by Cambrian Holdings LLC, which filed for Chapter 11 bankruptcy protection last week. The only unsecured creditor listed in Cambrian's bankruptcy filing was Cisco Systems, which Cambrian owes nearly $69 million.

Cambrian operates metro area networks along a backbone that connects New York, Philadelphia, Baltimore, and Washington. Its original plan was to provide wholesale bandwidth services to CLECs and other carriers in that region that didn't want to pay the prices charged by incumbent carriers such as Verizon Communications Inc. (NYSE: VZ).

In April, Cambrian announced three customers, but it didn't name them in its press release and wouldn't reveal them to inquiring reporters (see Cambrian Launches Metro Network). It says it has more than 20 customers now.

Cambrian's assets were listed as between $0 and $50,000 and its debts were listed as less than $100 million. Cisco originally supplied the company with a $150 million vendor financing facility, but Cambrian never used the entire amount, according to Chris Tarbert, Cambrian's VP of sales and marketing.

The carrier names Cisco as its only equipment supplier and says that now that it's reorganizing, it doesn't anticipate needing any new gear for while. "I think we'll have enough equipment to get us to a point where our revenue rate will equal or eclipse our monthly burn rate," Tarbert says.

Cambrian was founded in early 2000 and was initially funded by its management team and the venture capital firm Duff Ackerman & Goodrich.

The carrier holds the distinction of being the first customer that bought Cisco's 15200 metro DWDM box and its ONS 15900 Wavelength Router, a product that was canceled in April 2001 (see Cisco Plods Toward Optical Portfolio and Cisco Kills Monterey Router). Cambrian also uses Cisco's 15454 Sonet add/drop multiplexers, its 12000 Series routers, and its Catalyst 6500 Ethernet switches.

Of course, Cisco hasn't bet all its hair on the service provider market. At the end of its second fiscal quarter of 2002, the company's outstanding commitments were approximately $1.7 billion, of which about $1 billion was eligible for drawdown. When contrasted with its cash and investments -- $21.5 billion as of July 27 -- Cisco has risked comparatively little, with mostly negative results.

— Phil Harvey, Senior Editor, Light Reading
www.lightreading.com
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ironman 12/4/2012 | 9:43:20 PM
re: Cisco-Backed Cambrian Is Bankrupt "The carrier holds the distinction of being the first customer that bought Cisco's 15200 metro DWDM box and its ONS 15900 Wavelength Router, a product that was cancelled in April 2001"


How does one buy something that was never sold LR?
hiddentiger 12/4/2012 | 9:43:19 PM
re: Cisco-Backed Cambrian Is Bankrupt >How does one buy something that was never sold LR?

With vendor financing- of course!
Belzebutt 12/4/2012 | 9:43:18 PM
re: Cisco-Backed Cambrian Is Bankrupt How can a company like that have only $50,000 in assets? That's the price of one card for some of those Cisco boxes. Do they not actually own anything?
BobbyMax 12/4/2012 | 9:43:12 PM
re: Cisco-Backed Cambrian Is Bankrupt Cambrian would have folded as it never validated its business concepts.

The alternate business plan selling bandwidth services to CLECS would have worked. There was no way for the company to generate enough revenue to stay in business.
MaxQoS 12/4/2012 | 9:43:11 PM
re: Cisco-Backed Cambrian Is Bankrupt They probably leased all of the capital assets. It's amazing that cisco let this get so upside down.

Cheers
edgecore 12/4/2012 | 9:43:03 PM
re: Cisco-Backed Cambrian Is Bankrupt
Had they only seen the light and provided Ethernet services in the last mile, storage networking services and capped it all off with wavelength services...they would be as big as SBC by now!

EC


cyber_techy 12/4/2012 | 9:43:01 PM
re: Cisco-Backed Cambrian Is Bankrupt Author: edgecore Number: 6
Subject: Cambrian Date: 9/24/2002 12:14:37 PM

Had they only seen the light and provided Ethernet services in the last mile, storage networking services and capped it all off with wavelength services...they would be as big as SBC by now!

=================================================

My company is doing exactly that.
willywilson 12/4/2012 | 9:42:58 PM
re: Cisco-Backed Cambrian Is Bankrupt Had they only seen the light and provided Ethernet services in the last mile, storage networking services and capped it all off with wavelength services...they would be as big as SBC by now!


--------


I thought the Cambrian guys were for real. Problem was their customers the CLECs. Most were frauds. And who knows whether any of that Cisco hardware ever worked anyway.
USA 12/4/2012 | 9:42:57 PM
re: Cisco-Backed Cambrian Is Bankrupt I hate to see another company go under, but I tried to sell into these guys a couple of years ago and they were very cocky because they had Cisco backing them up.

They treated us like crap, so I'll have to say these particular 'decision-makers' deserve to be out of a job.
maryhadalambda 12/4/2012 | 9:42:55 PM
re: Cisco-Backed Cambrian Is Bankrupt They just need some MEMs based switches, tunable lasers and MPLS-based routers to offer a variety of protected/unprotected wavelengths over DWDM. Then thye could have sold lambda services over a network with no cell tax?
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