How will this affect the industry

I'd like to know this myself, especially from those who use Yipes. I heard that Yipes has a very good quality bandwidth. Is this going to end?

Unfortinuately bankruptcy is nothing more than a joke now aday. I wouldn't even worry about it, think of bankruptcy as a way to wave bye bye to a lot of your debt and start all over at the same level or a bit below when you filed bankrupty. Its a very over abused practice to cover up and correct financial misfortunes.

So in short, I wouldn't worry.

Originally posted by rey
I'd like to know this myself, especially from those who use Yipes. I heard that Yipes has a very good quality bandwidth. Is this going to end?


you would have to figure they would raise prices, possibly stop offering the service in some areas and since they are trying to lower their costs, the quality may suffer.

I'd like to know if hosts who are using them will be switching now

Originally posted by DanielP
Unfortinuately bankruptcy is nothing more than a joke now aday. I wouldn't even worry about it, think of bankruptcy as a way to wave bye bye to a lot of your debt and start all over at the same level or a bit below when you filed bankrupty. Its a very over abused practice to cover up and correct financial misfortunes.

So in short, I wouldn't worry.


hope you are right, though it is quite disconcerting the way businesses abuse the bankruptcy system

Originally posted by DanielP
Unfortinuately bankruptcy is nothing more than a joke now aday. I wouldn't even worry about it, think of bankruptcy as a way to wave bye bye to a lot of your debt and start all over at the same level or a bit below when you filed bankrupty. Its a very over abused practice to cover up and correct financial misfortunes.


Here's an article about Yipes bankruptcy:

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2002/03/23/BU240955.DTL&type=business

I have to disagree with the above statement. Very few telecom companies have been bale to pull out of bankruptcy. The problem is that these companies are beholden to carriers and equipment manufacturers for most of their debt. When they enter into bankruptcy court, they are going to try to renegotiate that debt. These same carriers and equipment manufacturers (who are in trouble themselves, see the news on Lucent this week) are not going to extend them any more credit, which means that the carrier has to scale back its network and it certainly can't expand any further. Most of these carriers are not able to make a profit with their existing network -- so they have to sell assets, or the whole company, at rock bottom prices.

I seriously doubt Yipes will emerge from bankruptcy on its own...I think it will most likely be purchased by another provider.

The question is, which Metro carrier is next?

I wonder if this bancruptcy was caused by a merely tough competition? (Like Cogent who offered 100Mbps for $1000, etc). What about larger players like UUnet, Level3, Qwest, ATT etc? It seems to me like the survival of the fittest.

i dont think it will be time warner or uunet. and i hope not level3.

All I have to say is: yipes! :buck: (okay, stupid pun...) I've seen many companies disappear once they file for bankruptcy, although a few make major changes to their business plan and make things work out.

Well I think CogentCO caused most of the carrier companies to go under :) And guess what, in a few years all the carrier cos die out and cogent will be the only one left :eek: (Just my thought)

Originally posted by Synergy
Well I think CogentCO caused most of the carrier companies to go under :) And guess what, in a few years all the carrier cos die out and cogent will be the only one left :eek: (Just my thought)

Cogent didn't have anything to do with larger carrier companies going under. The ones that fail, will be done in by their own greed...just like other large companies that fail. I don't even think you can blame Yipes on Cogent, because they are in different buildings. Cogent can't sell to Yipes customers, and vice-versa.

As far as Cogent being the only one left, I would certainly take that bet, they will be lucky to make it 18 months without visiting a bankruptcy court :D.

Originally posted by uuallan


Cogent didn't have anything to do with larger carrier companies going under. The ones that fail, will be done in by their own greed...just like other large companies that fail. I don't even think you can blame Yipes on Cogent, because they are in different buildings. Cogent can't sell to Yipes customers, and vice-versa.

As far as Cogent being the only one left, I would certainly take that bet, they will be lucky to make it 18 months without visiting a bankruptcy court :D.

That still doesn't mean that companies using Yipes will not move over to DCs with Cogent. Can you also say that without Cogent people will still consider Yipes? Its all measured on the potential business for Yipes and of course with Cogent around, its very slim. I'm not talking about webhosting servers, infact i'm talking about corporate intranet which consumes a full rackmount for that company's intranet clusted with servers (not necessarily for web presence services).

So its going to be 18 months before Yipes can complete shut down or get bought? :D

Originally posted by Synergy

That still doesn't mean that companies using Yipes will not move over to DCs with Cogent. Can you also say that without Cogent people will still consider Yipes? Its all measured on the potential business for Yipes and of course with Cogent around, its very slim. I'm not talking about webhosting servers, infact i'm talking about corporate intranet which consumes a full rackmount for that company's intranet clusted with servers (not necessarily for web presence services).


Actually, I was referring to in-building services to companies who need Internet access. I am not thinking in terms of the hosting/data center market at all, because that is such a small portion of their business.

Another thing to think of is that if a failing company is looking to get bought, the buyer sometime requires them to file.

Im really not too worried about Yipes at the moment.

Joe

I agree Yipes will be fine they are just seeking protection against lawsuits or other actions by creditors while they restructure. Yipes is private owned they cannot be compared to other providers that did this and sunk because they do not have the public stock holders driving them to death.

This is the same thing ICG did a year ago and they came out smelling like a rose, they are now back stronger than ever looking to be a leader in this market.

The way the market is today companies are unable to repay debts they borrowed 3 years ago when the market was booming. For most this dose not mean they are not making money they are just not meeting the projection on witch they based to be able to pay back loans, this leads to most taking the road of chapter 11 to extend the time they have to get out of debt.

Bankruptcy doesn't really protect them from being liquidated and parcelled out to other interested players. Look at Global Crossing whose creditors are right now taking bids on pieces and parts.

A lot of the reasons these companies may be struggling is due to the massive build-outs with no buyers. Once upon a time they couldn't keep up with all the buyers but many of them have folded and left their providers holding the bag. There is way too much unlit fiber out there just waiting to go live, I see Bell Labs has managed to transfer 1.6Tbps across 1250 miles (link: http://www.lucent.com/press/0302/020322.bla.html), so bandwidth is (er, should be) getting cheaper by the minute but the current infrastructure isn't even paid for.

That of course is why *I* think they are struggling and will continue to struggle for the forseeable future. There will be a diamond in the rough I'm sure, but who that is is anyones guess.

It really depends on a lot of information the public does not have access to.

If a company is currently profitable, just has sizable old debts, then chapter 11 helps them through. However, Yipes isn't profitable yet. However, Chapter 11 does help them isolate old financing and allowed them to obtain new. So, it does afford them the luxury of some more time.

Also, a bankruptcy allows them to restructure and remove themselves from costs of past mistakes. They will be examining each aspect of their business and its profitability. It is highly likely the will terminate some agreements with both suppliers and customers.

Last, bankruptcy certainly makes a sale more feasible by providing a mechanism to protect a purchaser from a large part of the old debt.

As to what will happen, we will just have to wait and see. However, they are not the first and will not be the last. No one should delude themselves into thinking any carrier is completely safe today. Less than a week ago, a well respected person on this forum was making false statements as to Yipes profitability.

I, personally, hope they all survive and thrive because we need players like Yipes in the marketplace. As to how I react from a business standpoint, basically the same practices as I already had-maintain flexibility, multiple carriers, and contingency plans.

They'll be fine, they needed protection from their loans and creditors. Don't forget, Yipes has a decent metro buildout that may be attractive to a larger IXC or RBOC.

Same thing with MFN, the fiber they have in the ground across the US will be picked up for pennies on the dollar of what it cost them to build-out.

This is a way to restructure that debt and the terms associated with it.

Just because a company files for Chap 11 doesn't mean they have to sell off parts of the company, etc. They first have to put a plan together showing how they are going to move forward.

Once that is done, the court and the creditors yea or nay it, and most of the time it is yea'd. Think about it, do you want some % on the dollar of your money back, or do you want to push them to chapt 13, where you have to get in line, figure out who has senior debt status, and you may end up with zero pennies on the dollar that way, while the folks who have senior debt status get all the money that is left, assets, etc.

I was involved as part of a multi-hundred million dollar vendor financing package to an up and coming carrier a few years ago, we fought with Cisco on who was going to have senior debt status, INCASE the company filed for chap 11/13, then we knew some of our cash would be protected.

Low and behold, no vendor got senior debt status, the VC did at that time on their freaking working capital, figure that one out.

Yes, they went kaput, and the VC got a larger % back of his investment then us or the other vendors.

This happend all the time, thank god I'm not in the vendor community anymore! :)

tjk

Another article on Yipes chap 11 filing: http://story.news.yahoo.com/news?tmpl=story&u=/cn/20020325/tc_cn/yipes_files_for_chapter_11_bankruptcy&cid=70