Network meltdown looms

In the wake of the collapse of Internet service provider KPNQwest, customers are being urged to act now rather than later. Antony...

In the wake of the collapse of Internet service provider KPNQwest, customers are being urged to act now rather than later. Antony Adshead reports.

Analysts have advised users to assess their exposure to KPNQwest networks and act now in the aftermath of the collapse of the Internet service provider (ISP).

Even customers of other ISPs could have their network communications disrupted because of the extent of KPNQwest's network reach and of its wholesale supplies of bandwidth to other providers.

The company, which went bankrupt last week, has 100,000 customers and has a fibre-optic network in Europe spanning 25,000km. It connects 60 cities in 18 countries, 28 hosting centres and 14 high-capacity metropolitan area networks.

As Computer Weekly went to press, a skeleton staff was keeping the company's physical infrastructure running while attempts are made to find a buyer.

If the network is switched off about 40% of European networks could be shut down.

Those at risk include both direct business customers of KPNQwest and customers of ISPs which bought bandwidth from the company.

Maureen Coulter, an analyst with Gartner Group, advised customers to make contingency plans now. She urged them to back up networks and look for Web hosting services from another provider. "All KPN customers need to go elsewhere now," said Coulter.

"If KPNQwest's network is closed down all that traffic will go to other networks and although there is meant to be a bandwidth glut at the moment, I expect we will see bottlenecks in the coming weeks. Businesses need to duplicate their most important network routes and hosting provision," she said.

"It does not need to be as extensive as their main network but should be there so that they can still carry on.

"All companies need to look now at existing contracts and infrastructure and if there is the slightest chance of the provider going under they need to act immediately," said Coulter.

She added that when negotiating contracts with Internet service providers, businesses should ensure the inclusion of a get-out clause so that they could escape from the agreement in the case of impending bankruptcy.

Gartner recommendations
  • Strongly consider not signing up for any new KPNQwest services until its financial condition improves
  • Start duplicating all data and look for alternative hosts for all Web sites hosted by KPNQwest
  • Do not plan any network migrations over the next week. If KPNQwest shuts down, the Internet protocol traffic it carries will go to other networks and cause congestion
  • Revert to using the prefix dial codes for carrier identification for voice services, either by reprogramming the PBX or by advising users at the desktop. Carrier preselect may have superseded the codes, but they still work. Obtain the codes and pass them to users
  • Enterprises using a second Internet service provider (ISP) should consider using it for Internet access needs as well as for wide area network needs by deploying a virtual private network (VPN). They should turn on the IPSec VPN feature in their firewall
  • Organisations without an alternative ISP should order services based on ISDN for key locations as a dial-up, back-up solution
  • Firms with unused modems should reactivate them and enable overnight dialling from branch offices where dedicated lines are at risk
  • Companies reduced to dial-up should use physical messenger services for bulk data transfers.

Source: Eric Paulak, Gartner Group

KPNQwest's brief history
Founded by KPN and Qwest, KPNQwest is a separate stand-alone company. The current ownership structure is Qwest 47%, KPN 40% and public 13%.

KPNQwest was formed in November 1998 and went on to launch an initial public offering (IPO) on the Nasdaq and Amsterdam stock exchanges in November 1999, to fund its business plan.

This was the most successful IPO in the Netherlands since 1995. Last week customers were advised to seek network capacity from other suppliers as the company searched for takeover candidates in a bid to fund day-to-day operations after it was declared bankrupt.

Over the past year KPNQwest incurred huge losses and shrinking revenues left it unable to service a E2bn (£1.3bn) debt. Its share price peaked at E89.40 in February 2000 but stood at E0.30 last week.

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