The latest in an increasingly popular string of works analyzing another burst bubble, this book takes on the demise of the telecom broadband industry. The author, formerly a writer at Red Herring and now an editor at Forbes, focuses on the individuals and corporations involved in some of the most egregious hypes and heists of the telecom industry. The individuals profiled include Bernie Ebbers (WorldCom), Phil Anschutz (Qwest), Gary Winnick (Global Crossing), Jim Crowe (Level 3 Communications), Ken Rice (Enron), Alex Mandl (Teligent), John Doerr (Excite@Home). Teddy Forstmann (Forstmann, Little & Co.), Jack Grubman (Salomon Smith Barney), John Roth (Nortel), Gururaj Deshpande and Daniel Smith (Sycamore Networks), and Vinod Khosla (Cisco). This is a lively work, though edging toward overblown, which delights in dishing the dirt on some once high and mighty industry giants. By providing background and details, however, it helps the reader connect individuals with corporations and gives insight into the tangled web that has now almost completely unraveled. Purchase where there is interest. Susan Hurst, Miami Univ. Libs., Oxford, OH ( Library Journal , June 15, 2003) "...This book offers a scathing analysis and a riveting read a very readable book...it’s a must read" ( The Inquirer , 19 June 2003) Lenette Crumpler, a former employee of Frontier Communications, lost $86,000 of her 401(k) money. Paula Smith worked most of her life at US West and then lost her life′s savings of $400,000 after Qwest took over US West. How and why did these employees find themselves in such an outrageous situation? To find the answer, Om Malik burrowed deep inside the so–called broadband bubble –– the colossal build–out of communications networks that accompanied the technology and investment boom of the late 1990s. He unearthed copious evidence of what he dubs, "broadband bandits" — businessmen who took full advantage of the telecom bubble to line their own pockets even as their companies collapsed. The result was "Broadbandits," a book that tells the whole sordid story of the dishonest men who profited from the broadband boom. The author, a senior writer at Business 2.0 magazine, provides a clear, sober account of what he calls′ ′the robber barons of the information age" —and how they pulled off one of the biggest heists of all time. Some $750 billion vanished when the telecom bubble burst, Malik writes. More than 100 companies went bankrupt and an equal number shut down, leaving up to 600,000 telecom industry workers without paychecks. "The biggest bubble in the history of the modern world was not the dot–com bubble but the telecom bubble," the author writes. Some of the industry insiders Malik cites as culprits are Global Crossing′s Gary Winnick, WorldCom′s Bernie Ebbers, Qwest Communications′ Joe Nacchio, Salomon Smith Barney telecom analyst Jack Grubman, Enron Broadband Services′ Ken Rice, and Lucent′s Richard McGinn. To understand the unscrupulous insiders who got rich on an industry built on light and fiber, one must first understand the broadband bubble. Malik writes that about 80.2 million miles of optical fiber was installed in the United States from 1996 through 2001. That means about three–fourths of the installed base of 105 million miles was put in place in just six years. What′s even more stunning is that the vast majority of this cable is not even used today amid the colossal fiber glut that has emerged from years of overbuilding. As Malik points out, "the world is crisscrossed with fiber that is unlikely to be used for decades." The whole complicated situation began with the Telecommunications Act of 1996. The act was meant to increase competition in the once closed–off telephone industry and to help create new companies. The capital markets caught wind of this new technology revolution and basically threw money at anything or anyone connected with this new open telecom market. Along with deregulation of the telecom market, demand for bandwidth skyrocketed. These conditions set the stage for the broadband bubble. Malik writes that′ ′the broadband bubble and the dot–com bubble resulted from overblown expectations and irrational exuberance." This book is the story of the unsavory businessmen who benefited as companies collapsed and rank–and–file employees saw their life savings and retirement funds dissipate. The saddest part of the whole story is that these men basically got away with their greedy corporate maneuverings while many of their loyal employees had their lives turned upside down by the downfall of the companies they worked for. The financial shenanigans of the telecom executives and insiders have become the stuff of legends. For instance, Gary Winnick of Global Crossing took in $735 million while the company was blowing through $15 billion in investor money, eventually ending up as the fourth–largest bankruptcy case in U.S. history. Then there′s stock analyst Jack Grubman, who had buy recommendations on 20 telecommunications companies. Twelve are now bankrupt and the others are on the brink. Grubman himself pocketed $100 million and has been barred from the securities industry. The exploits of the companies are no less staggering. Sometimes it seemed as if common sense had completely blown out the window. For example, Lucent acquired 21 companies between September 1997 and July 2000, spending a staggering $43 billion. CEO McGinn was fired in October 2001. His severance package was $12.5 million and his total take′ ′for reducing Lucent to shambles" was about $38 million, Malik writes. The author clearly exposes the mismanagement and wrongdoings of these individuals and companies. He relentlessly pursued them in his research and interviews, peeling back the layers of misconduct to reveal the shocking greed and dishonesty so prevalent as the broadband bubble grew bigger and bigger. The bubble finally burst, creating a huge mess for all but the executives who took care of themselves. The book is fascinating and well–written. Lay people will appreciate the way Malik cogently analyzes the tumult in telecom. This book enables even those who have never read a stock market report in their life to understand exactly what happened and why the broadband bubble—and its demise—were so stupendous. ( San Jose Mercury News , July 20, 2003) "...a compelling account of the downfall of the telecom giants..." ( Dunstable Gazette , 6 August 2003)
"...This book offers a scathing analysis and a riveting read a very readable book...it’s a must read" ( The Inquirer , 19 June 2003) "this book is fascinating and well–written." ( San Jose Mercury New , July 20th, 2003) "...a compelling account of the downfall of the telecom giants..." ( Dunstable Gazette , 6 August 2003)
Broadband (noun):High–speed network access. Broadbandit (noun):One who padded his coffers by $50 million or more riding the bandwidth bubble. Before the ink was even dry on the Telecommunications Act of 1996, a telecom bubble larger than that of its dot–com sister was quickly beginning to form. With the deregulation of the telecom industry finally complete, the race was on; and what ensued was nothing less than a financial hit and run, which left the telecommunications industry in shambles and investors brokebut made the broadbandits who led this charge rich beyond their wildest dreams. Broadbandits: Inside the $750 Billion Telecom Heist goes behind the scenes to uncover the actions and motivations of a handful of men and a few dozen companies who worshipped at the altar of corporate greedand for the most part got away with it! Through interviews with numerous industry insiders and real–world stories, investigative reporter Om Malik follows the money trail to reveal the events that all but destroyed an industry and decimated thousands of portfolios in the process. Broadbandits offers a candid look at how fiber barons such as Bernie Ebbers of WorldCom, Gary Winnick of Global Crossing, and Joe Nacchio of Qwest turned simple light and glass fibers into veins of gold that allowed them to build enormous personal fortunes, even as their companies were going down in flames. Youll be there to watch as eager venture capitalists and unknowing investors try to buy their piece of the American Dreamonly to get burned by once high–flying companies such as Excite@Home, Winstar, McLeodUSA, Nortel, and Sycamore. Broadbandits puts you face–to–face with the shameless individuals who used the hype and hysteria of the telecom revolution to pump up telecom stocks and line their own pocketseven when there was little evidence to substantiate their claims. Youll learn how the former pied piper of the telecom industry, analyst Jack Grubman, played both sides of the fence to make millions, while pundit George Gilders pie–in–the–sky predictions transformed him into a cult hero, until everything came crashing down on him. The broadband bubble was the result of over–blown expectations and irrational exuberance. Broadbandits provides an inside look at the financial schemes and misguided power plays that made victims out of everyone and brought an industry to its knees.