From: scott.bolton@enron.com
To: sue.nord@enron.com, susan.landwehr@enron.com, jeff.dasovich@enron.com, marchris.robinson@enron.com, lisa.yoho@enron.com, aleck.dadson@enron.com, dlassere@enron.com
Date: 2000-02-09 16:49:00+00:00
Subject: Motley Fool EBS clip

Cool, huh?
----- Forwarded by Scott Bolton/Enron Communications on 02/09/00 04:45 PM 
-----

	bankst@fleishman.com
	02/10/00 06:37 AM
		 
		 To: csandhe@enron.com, Scott Bolton/Enron Communications@Enron 
Communications, Janet Johnson/Enron Communications@Enron Communications, 
Claudia Johnson/Enron Communications@Enron Communications, 
hubbardh@fleishman.com, haberj@fleishman.com, mandigom@fleishman.com, 
woodrufd@fleishman.com, pendergb@fleishman.com
		 cc: 
		 Subject: Motley Fool EBS clip



Hi Everybody,

Here's a very strong clip on Enron Broadband Services from today's Motley
Fool -- Bill Mann was at the briefing yesterday.
I'm fairly certain we'll see something in today's CommDaily, as well -- then
there's the weeklies and monthlies who were there
and will be coming on stream.  I'll keep you posted.. -- Terry

> FOOL ON THE HILL
> An Investment Opinion
> Enron's Telecommunications Revolution
> By Bill Mann <http://www.fool.com/About/staff/billm.htm> (TMF Otter)
> February 9, 2000
> Here's a juicy piece of trivia for you. Can you name the company with the
> largest amount of business derived from e-commerce?
>
> If you managed to see the title you'd likely expect the answer to be
> Enron. And you'd be right.
>
> Houston-based Enron Corp. (NYSE: ENE)
> <http://quote.fool.com/uberdata.asp?symbols=ENE> processes online
> transactions with a notional value of $300-400 million per day. Enron's
> electricity and natural gas intermediation services manage a significant
> portion of the natural gas spot contracts in the United States and Canada,
> providing service via its own natural gas pipeline network as well as
> providing the information system to broker sales between suppliers and
> purchasers.
>
> In effect, Enron has decided to leverage its network of pipelines by using
> the information about natural gas flow to help make a much more efficient
> system. The information is then what becomes valuable, with the network
> and the actual natural gas just being the commodity upon which the
> information exchange is built.
>
> Enron has made some recent splashes here at The Motley Fool, starting with
> its inclusion as a NOW 50 Index <http://www.fool.com/now50/now50.htm>
> company, which began on the first day of trading in 2000. In just the last
> two weeks Enron's CEO, Ken Lay, appeared with Tom and David Gardner on The
> Motley Fool Radio Show <http://www.fool.com/radio/radioonline.htm>, and on
> Monday of this week, George Runkle (TMF Runkle) wrote about it as a part
> of the Pathfinder Series
> <http://www.fool.com/dripport/2000/dripport000207.htm> being undertaken in
> the Drip Port.
>
> But what really catches my eye about Enron is its attempt to bring the
> same spot market efficiency to the bandwidth market as it has done with
> natural gas. This is something really bold -- a company with natural gas
> and electric utility backgrounds (Enron owns Portland General Electric
> <http://www.pge-online.com/>, the incumbent utility in northwestern
> Oregon) moving into the telecommunications field, one of the most fiercely
> competitive on the planet. Are these people nuts?
>
> Not at all. They're crazy like foxes, actually. Enron is part of a rare
> breed, a company that is perfectly willing to go out and compete for
> business anywhere, anytime. They seem to have no preconceived notions of
> what their business limitations are supposed to be, and have never seen
> any such thing as a sacred cow, to the point of selling off the operations
> that first brought them into commerce. These companies, to which I assign
> the highest regard, include Nokia (NYSE: NOK)
> <http://quote.fool.com/uberdata.asp?symbols=NOK>, CMGi (Nasdaq: CMGI)
> <http://quote.fool.com/uberdata.asp?symbols=CMGI>, Reed Elsevier (NYSE:
> ENL) <http://quote.fool.com/uberdata.asp?symbols=ENL>, Cable & Wireless
> (NYSE: CWP) <http://quote.fool.com/uberdata.asp?symbols=CWP> and
> Schlumberger (NYSE: SLB) <http://quote.fool.com/uberdata.asp?symbols=SLB>,
> operate in different industries, but they are in effect companies that
> trade primarily in intellectual capital. Enron fits this mold as well --
> it trades in information, the commodities and services it provides are the
> manifestations of that information.
>
> With this background in mind, I jumped at the opportunity this morning to
> attend an informational session that Enron held in Washington, D.C. to
> discuss its new initiative, Enron Broadband Services, presented by the CEO
> of EBS, Joe Hirko, and the Vice President of Bandwidth Trading, Tom Gros.
>
> What Enron proposes to do, and is provisioning its network for, is to
> create a market by which Internet Service Providers (ISPs), carriers,
> brokers and end users can purchase high bandwidth capacity on a spot
> market. Enron is initially using its existing 14,000-mile fiber optic
> network in the U.S., along with pooling points and other points of
> presence, currently in 25 U.S. cities.
>
> The concept is revolutionary. Currently high-bandwidth pipelines (DS-3 and
> higher) are provisioned on a long-term contract basis and can take up to
> 90 days to be brought into service. This means that it is very difficult
> for networks to do any dynamic load management because their networks must
> be built to handle peak usage times that, in some instances, can be 200
> times as high as the low usage points.
>
> Enron estimates as a result of this that even on the heaviest trafficked
> routes, such as New York-Los Angeles, that the load factor (amount of
> capacity that is actually used) for circuits is less than 5%. What Enron
> is proposing would provide a way for network managers to use as much
> bandwidth as they need during peak times, and sell it on the open market
> during their own lower traffic times. But how can companies do this given
> the long lead times required to bring up and tear down circuits?
>
> Enter Enron. Enron has built its first two pooling points (one in New
> York, one in Los Angeles) to which ISPs, carriers and high-density end
> users can connect. These pooling points can then, using Enron's network
> optimization protocols, route the traffic from any number of customers
> across the same network. In so doing, Enron has provided its customers a
> solution that would otherwise be unavailable to them -- the ability to
> efficiently provision their own bandwidth needs, on a time-of-day, hourly,
> or one-time purchase basis.
>
> So, for example, if Citigroup (NYSE: C)
> <http://quote.fool.com/uberdata.asp?symbols=C> needed to send wiring
> information out from its New York clearinghouse once a day from 2-3am,
> Enron could provide them dedicated bandwidth for that transaction, selling
> the capacity to other clients during the other 23 hours of the day. Enron
> can even "hot roll" a data stream, matching supply and demand every 5
> seconds, and move a customer from one dedicated circuit to another without
> any disruption of service to the customer.
>
> There is a great deal of things that need to take place in the market
> before this vision becomes real, such as terms of service standards, legal
> efficiency (master contracts), and an increased level of interconnectivity
> between carriers. But more importantly, carriers need to be willing to
> change the rules of the game. At least one carrier has been dismissive of
> Enron's entrance into their sandbox, saying that there's nothing an Enron
> could teach them about their own business. This suits Joe Hirko just fine,
> as Enron is working to set up a liquid telecommunications market, and in
> the end, like anything else, the needs of the consumers will drive the
> market. Hirko expects that activity in a liquid bandwidth market will
> build through 2001. But already Enron Communications has some $160 million
> in streaming contracts.
>
> Seeing as Akamai (Nasdaq: AKAM)
> <http://quote.fool.com/uberdata.asp?symbols=AKAM> -- whose Internet
> delivery service provides network flexibility is valued at $24 billion for
> $1.7 million in annual sales -- is it any wonder why some analysts believe
> that Enron Communications could be worth more than all of the rest of the
> company? If Enron succeeds in its drive to create an open broadband
> market, its $31 billion market cap could be a distant memory.
>
> Be sure to check out our Valentine's Day treat, Stocks Fools Love
> <http://www.fool.com/specials/2000/sp000208sfl.htm>, for a few love
> sonnets and other odes to some of our favorite companies! You might learn
> something, and you might be inspired to compose a ditty for your own
> beloved.
>
> Fool on!
>
> Bill Mann, TMFOtter on the boards
>
> Related Sites:
> Enron Message Board
> <http://boards.fool.com/Messages.asp?id=1100058000000000>
> Enron Corp website <http://www4.enron.com/corp/>
> Enron Broadband Services <http://www.enron.net/index2.html>
> FOOL ON THE HILL
> * Post <http://boards.fool.com/Post.asp?id=1030056000000000&reply=false>
> your thoughts about this article.
> * Read <http://boards.fool.com/Messages.asp?id=1030056000000000> the FOOL
> ON THE HILL message board.
> * Archives </news/foth/archive.htm>
>
>