In 1986, a group of Chicago entrepreneurs got together and convinced their city to let them lay fiber optic cables in abandoned coal tunnels. The idea was to connect the big financial centers directly to MCI, AT&T and Sprint. “Alternative access” was what they called it and T1s are what they sold. Prior to this alternative, the IXCs and their customers had only one way to connect to one another–Illinois Bell.
In 1986 I graduated from the University of Illinois with a mechanical engineering degree. Illinois Bell was my first job. I was enticed by the prospect of (a) the advent of competition, (b) the technical changes already underway, most notably ISDN and fiber optics, (c) an interesting management development program, and (d) no other job offers. I spent my first three months in a specially designed program that exposed a group of 30 “class of” hires to all aspects of the telephone business. The buzz was Chicago Fiber Optics–the upstart that wanted to compete with Illinois Bell. Even then, the expectation that the beginning of competition was upon the baby Bells.
CFO Corp hired Kiewitt Construction to build the network. A rather young and ambitious group manager from Kiewitt won the business. His name was Jim Crowe. All looked fine until it came time for CFO to pay the bill. It turned out fiber construction and electronics were expensive, building access was hard, and T1s were few and far between. No worries, Crowe concluded, he’ll convince Kiewitt they should buy Chicago Fiber Optics. Thus was born Metropolitan Fiber Systems, later shortened to MFS Communications.
MFS self-built most of their networks. They did, however, acquire a few smaller networks along the way, including ICC in Washington DC and Northeast Networks in White Plains. (Readers, please point out other fiber co acquisitions.) By the time MFS sold to Worldcom in 1997, MFS’s networks spanned the U.S. and Western Europe.
Worldcom eventually bought MCI, went through bankruptcy, changed it’s name to MCI, and sold to Verizon.
How much of the $85B was spent by MFS? Let’s say $2B.
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Many people credit MSF for starting the fiber by pass revolution but Chicago Fiber, which was owned by Tony Poppleano should be credited for starting the business as what we know today as the Competitive Access Business or CAP. Tony sold this business then started ACSI (American Communications Services Inc) later changed their name in 1997 to Espire. When the money dried up it was bought out of auction by Xspedius Communication Company, which was built back up by Mark Senda and later by Jim Lynch and it was sold to TWT for 526Million again grossly over paid by TWT., Mike
Mike, yes, Chicago Fiber Optics was Tony’s company.
Have you seen TWT’s latest earnings report? They paid on the high end for this acquisition perhaps but they seem to be doing well with it.
Next week I will tell the ACSI, Espire, etc. story. Please help me with the details.