When I joined MFS Communications, I knew nothing about the Internet. Neither did anyone else. Our chairman and CEO, Jim Crowe, held a meeting in MFS’s Chicagoland headquarters. Located twenty minutes straight west of downtown Chicago was Oak Brook’s twenty-story blue glass structure. In this shiny blue landmark, a meeting called “The Internet” was held.
I arrived at the meeting perplexed, as I didn’t realize why I was included as one of MFS’s twenty-five most senior executives in the invitation. The meeting room was set up like a classroom, with all the chairs in rows facing the front, where a computer, an overhead projector, and a white movie screen were arranged for a presentation. I sat near the back, as I thought it best to blend in.
Today, projecting a computer onto a big screen in meetings is commonplace. In 1994 this was done far less frequently. Those of us who gathered were curious.
Once the senior executive team settled in, Crowe called the meeting to order. He sat in the front of the room, next to the computer, and typed while he spoke. Again, I need to stress that this setup, though common today, was very unusual in 1994. More common was the use of slide transparencies. If a senior executive needed a computer for a presentation, an underling was doing the clicking. However, Crowe wasn’t clicking through a PowerPoint presentation*. He was going online.*
Online? Huh? What? In those days employees used corporate networks for email. To the extent they used the Internet at home, it was America Online (AOL) or Netscape via a dial-up connection. As hard as it is to believe, the Internet wasn’t really viewed as a business tool. Crowe, a true visionary, knew this was changing, and he decided his executive team needed a wake-up call.
“The Internet is going to be a powerful force in all of business,” Crowe told the group. “To show you what I mean, I am going to log onto the Internet.”
In general, the senior team saw Crowe as out of touch with the day-to-day goings-on at MFS. As such, his declaration triggered a few smirks from some in the room. “Doesn’t he know we have work to do?” said someone as we watched Crowe log onto the Internet.
“We’ve all used corporate data networks for a long time,” Crowe said. “Primarily, these were used for email. The Internet is something entirely different. Corporate networks are closed systems, not much more than speeding up intracompany mail.” The group grew quiet as we listened. Some in the room looked skeptical.
Crowe continued, “The Internet is an open network. But to think of it solely as a faster way to exchange email would be a mistake. It will change the way people live and work throughout the globe.”
Crowe added, “The Internet will speed up business. Using File Transfer Protocol, large files can be sent over vast distances both rapidly and cheaply.The File Transfer Protocol (FTP) is a standard communication protocol used for the transfer of computer files from a server to a client on a computer network. FTP was commonly used before web browsers became commonplace. Whereas FedEx would charge $20 to overnight a document, the Internet will deliver the same document in a few minutes at less than 5 percent of the cost.”
Crowe then used the Internet to send a document, making his point.
“Information is power. The Internet will speed up the pace at which people get access to information,” Crowe said. Then he asked a question that would look silly in today’s world: “Who here has heard of Yahoo!?” Eight hands went up; mine was not one of them.
“Who has actually used Yahoo!?” prompted a couple of the hands to drop.
“Yahoo! is a web portal,” Crowe explained to the perplexed crowd. “Internet users get information from a portal. Some of the information is prepackaged by Yahoo! itself, like an online magazine. But a portal is also used to find information that could reside anywhere on the Internet.”
I seriously doubt Crowe’s audience followed his “anywhere on the Internet” comment.
“Who knows what a search engine is?” Crowe asked the room. Two or three hands rose proudly. Crowe demonstrated a search engine, perhaps Yahoo!’s or another pre-Google version such as Ask Jeeves. He would type in words, and links would appear on the big screen. Wow! Powerful. There were some startled looks around the room.
Yet it was what Crowe said next that made that day so important in my career.
“I have come to believe that the Internet will fundamentally change the way people live their lives and conduct business,” Crowe told the group in a voice that was even deeper and more serious than his usual deep and serious voice. “I have concluded that MFS Communications will shape its business plan, and everything we do, around the Internet.”
Then as that statement began to sink in, Crowe said, “I have called each of you to this room to offer you a choice. One possibility is to leave this meeting as a skeptic. You can view the Internet as a trend, a fad, or a toy. You can be slow to understand the Internet. You can be an old dog that is not ready to learn a new trick. If this is your choice, you will need to find an employer other than MFS Communications.”
Then Crowe offered an alternative, though not necessarily a reassuring one. “Your other choice is to embrace the Internet. Learn what it is and how it works. Use it frequently and leverage it to make our business better. Understand how others are using it, and use this knowledge to guide our sales, marketing, and investment decisions. If you do this—if you embrace the Internet—I can offer you only one thing: you will have met the minimum qualification for being an executive at MFS Communications.”
Yep. No special bonuses. No promotions. In fact, not even assurance of continued employment. The gist of Crowe’s message was to embrace the Internet, and perhaps you will keep your job. Shun it and do not let the door hit you on the ass on the way out.
I picked door number one—I embraced the Internet.
BBN—Leo Beranek and J. C. R. Licklider#
Long before the birth of the Internet in 1993, computer scientists spread across several government research and higher education institutions invented the technologies that became the backbone of the Internet.
The oldest Internet pioneer was a company named Bolt Beranek and Newman (BBN). The company’s Internet journey began in 1957, when it hired a computer scientist named J. C. R. Licklider. After only a few months on the job, “Lick,” as he was known, insisted BBN buy a $30,000 computer. Leo Beranek, BBN co-founder and CEO, asked Lick what he would do with it.
“I don’t know,” Lick responded. “But if BBN is going to be an important company in the future, it must be in computers.”
The next year a large industrial company developed a prototype of its first computer. The company’s president was impressed by Lick’s understanding of digital computation, which led to BBN becoming a test site for the prototype computer.
In 1960 BBN leased a $150,000 computer. In search of customers, Lick and Beranek visited several government agencies, including the National Science Foundation (NSF) and the Department of Defense.
Lick hired John McCarthy, a computer science researcher from MIT, who envisioned time-sharing of computers. This concept resonated with Lick, leading him to publish “Man-Computer Symbiosis,” which foreshadowed the Internet.
Man-computer symbiosis . . . will involve very close coupling between the human and the electronic member of the partnership. The main aims are 1) to let computers facilitate formative thinking as they now facilitate the solution of formulated problems, and 2) to enable men and computers to cooperate in making decisions and controlling complex situations without inflexible dependence on predetermined programs. In the anticipated symbiotic partnership, men will set the goals, formulate the hypothesis, determine the criteria and perform the evaluations. Computer machines will do the routine work that must be done to prepare the way for insights and decisions in technical and scientific thinking.
In 1962 BBN demonstrated computer time-sharing with one operator in Washington, DC, and two in Cambridge. Later that year BBN installed a time-sharing information system at Massachusetts General Hospital, allowing several nurses and doctors to create and access patient records stored on a BBN computer. For the first time, users could interact with computers in real time from a terminal—a major advancement relative to submitting a stack of punched cards and, hours later, getting back a readout.
In 1968 BBN responded to the Defense Advanced Research Projects Agency’s (DARPA) request for proposals (RFPs) to build a network, later named ARPANET. BBN was awarded a $1 million contract to develop a small electronic unit, which evolved into the modern-day Internet router. BBN shipped the router to the University of California in September 1969.
Beranek elaborated on what happened next.
[T]his project required us to make a computer network with five stations on it first. And then if that worked it would be 19. So the idea was to hook together 19 computers and these would be located in universities and at a couple of the government laboratories. . . . [W]e were . . . hooking together these very expensive computers.
And so, ARPANET became the Internet’s precursor.
Beranek explained the bigger need of smaller universities to gain access to big computers spawned internetworking.
[I]f we make a network then [the small universities] can hook into . . . these big computers, maybe after midnight, when they’re not in use in the big schools. . . . [W]e invented this sort of cabinet. [The IMP,] the size of a refrigerator, . . . would hook into their computer. . . . So there are probably four different [computers], maybe five, that were in these different universities . . . connected together to form the network. [T]his became the big network, which is like the Internet today, only it was just one network and started off with only two people. And the first two went on the air, I think, in 1969. . . . And then every month, [BBN built and shipped one] to another university. And then . . . we had 19 of these out. . . . And the government financed the ARPANET as it grew up until 1982. At which time they said, well, look, we think that this can be handled by people like Comcast. . . . They can handle it and they can charge people to use it. Whereas [the government had] been paying for the whole thing [allowing users to get] . . . free use of it. . . . They stopped financing it in 1982.
In 1972 BBN veteran Dr. Bob Kahn joined DARPA to tackle the problem that the three emerging government packet networks, including ARPANET, couldn’t talk to one another. The three networks used different interfaces, packet sizes, labeling conventions, and transmission rates.
Kahn enlisted Stanford professor Dr. Vinton Cerf. Their 1973 solution was to invent the Transmission Control Protocol (TCP), which led to their historic May 1974 Institute of Electrical and Electronics Engineers publication titled “A Protocol for Packet Network Interconnection.” They later combined TCP with the Internet Protocol (IP), forming TCP/IP. TCP addressed how to collect and reassemble packets of data, while IP ensured the packets were sent to the right destinations.
Dr. Cerf and Dr. Kahn achieved a major demonstration in 1977 by “internetting” ARPANET with the other networks. Messages were relayed from a van in the Bay Area across the United States on ARPANET, then to University College London and back via satellite to Virginia, and finally to the University of Southern California’s Information Sciences Institute via ARPANET.
Six years later ARPANET adopted TCP/IP—the specific event that led to January 1, 1983, being marked as the birth of the Internet and Dr. Kahn’s and Dr. Cerf’s anointing as fathers of the Internet.BBN was awarded one of the three contracts to implement the Kahn-Cerf TCP protocol. In doing so Ray Tomlinson, who led BBN’s implementation of TCP/IP, wrote a program to enable electronic mail to be sent over the ARPANET. Tomlinson chose the @ sign for the email address convention, and “user@host” convention stuck as the worldwide standard for email addresses.
From the late 1970s through the early 1990s, BBN leveraged its early Internet expertise and its invention of the router by focusing on selling network hardware to the government and government-related contractors. BBN did well as a hardware company during this period. However, the early 1990s were a different story. The ending of the Cold War resulted in a cutback to government defense spending. Moreover, Silicon Valley upstarts, notably Cisco Systems, developed more technically advanced IP network products.
Despite their contributions in developing Internet technology, BBN found itself on the sidelines as it witnessed its two main Internet rivals develop commercial Internet Backbones. We will share how BBN responded after first telling the stories of those two rivals, UUNET and PSINet.
UUNET—John Sidgmore and Rick Adams#
Richard L. “Rick” Adams had the appearance of an Internet tech pioneer—scruffy with a beard, disheveled, and typically sporting a wrinkled polo shirt at work. Adams preferred to toss around a Frisbee during the day and do his programming at night. He described himself as “the quintessential computer nerd.”
Adams’s first employer was not keen on his work habits or attire, so he quit in 1982 to join the Center for Seismic Studies in Northern Virginia. There, he became an ARPANET user and, within two years, invented SLIP, enabling individuals to connect their personal computers to the ARPANET via dial-up modem.
Adams was a member of a nonprofit organization for Unix software programmers, whose mission was tied to innovative research. Adams noticed that Unix developers wanted access to ARPANET. “Everyone wanted this wonderful resource, even though it was mostly just electronic mail and not much else,” he explained.
In 1987 Adams convinced the organization to provide $250,000 to buy hardware from Cisco and rallied programmer volunteers to build out the network software. He named his nonprofit organization UUNET (pronounced “you-you net”), which meant nothing to most people, but the “Unix-to-Unix Network” underpinnings appealed to the tech crowd. Though Adams’s goal was to charge only for what was necessary to recover costs, he was soon collecting $1 million of revenue.
“If people were begging you to take their money for this, that’s the business I want to be in,” Adams said.
True to his words, in 1989 Adams left the seismic center and moved the UUNET hub from a USENIX facility to his home in Northern Virginia. The following year he turned UUNET into a for-profit company and launched Internet connectivity services for enterprise customers. UUNET had four employees on its first day.
Al Gore, who was Bill Clinton’s vice president and, but for a few votes in Florida, might have been Clinton’s successor, claimed to have invented the Internet. He did not. However, in 1991 he championed a $1.75 billion spending package to support his vision of an information superhighway. While others were vying for this funding, UUNET was growing in popularity with the user community. Observing this, the NSF allowed UUNET—and a few of its rivals—to interconnect with ARPANET. With that, the commercialization of the Internet was underway.
Other innovations conspired to cause the popularization of the Internet: Berners-Lee’s 1989 invention of the World Wide Web and the Hypertext Markup Language; Andreessen’s 1992 launch of Mosaic and, soon thereafter, Netscape; and AOL launching its Internet service in the early 1990s. Traffic on UUNET’s network was skyrocketing.
Augmenting capacity on the UUNET network was expensive. Dozens of computer servers were deployed in data centers across the nation. These servers were connected using dedicated lines leased from fiber network companies. The exponential growth made network design and implementation a daunting undertaking. I know this firsthand because, as the story unfolds, much of this responsibility eventually fell into my lap.
“The project was swallowing cash by the trash-can full,” recalled UUNET’s chief scientist. “We had to put hardware everywhere. There were these big-boy pants that we had to grow into real quick.”
The need for cash prompted Adams to raise money for the first time in 1992. Mitch Kapor, best known for his spreadsheet software Lotus 1-2-3, befriended Adams and offered to invest in UUNET. “He told me that there was a new poker game going on and he wanted to get some chips,” Adams said. Kapor invested several hundred thousand dollars. “I liked him, trusted him, and I also wanted him to stop bugging me [to let him invest in UUNET],” explained Adams.
Kapor, knowing his investment wouldn’t fund UUNET for very long, turned to Silicon Valley. John Doerr, a top Venture Capitalist at a leading Venture Capital firm Kleiner Perkins, wasn’t interested in meeting Adams, as he viewed UUNET as capital intensive and lacking durable advantages over deep pocket rivals.
Kapor next reached out to another major Venture Capital firm, Accel Partners, which focused on the telecom industry, and pitched to them that UUNET could “make this into a thing where everyone talks to each other.” Despite multiple attempts, Accel would not bite.
While Sand Hill Road struggled to see the UUNET opportunity, my bosses’ boss—MFS CEO Crowe—was ready to invest.Sand Hill Road is a street in Palo Alto where most of the highest profile Venture Capitalists had their offices in the 1990s. The expression “Sand Hill Road” is a reference to the Venture Capital community. UUNET’s consumption of bandwidth to interconnect its servers—and to connect its customers to the UUNET network—was resulting in UUNET becoming one of MFS’s biggest customers. In February 1993, just months after the Internet presentation in Oak Brook, Crowe offered Adams $8 million for his company. “I wanted $12 million, and they wouldn’t consider spending that much. Everyone thought I was crazy to walk away, but I was having fun and I thought the Internet business was a good bet.” So were the 1985 Bears.
Kapor used MFS’s offer to nudge Accel, which led to an invite for Adams to pitch to Accel’s investment committee. Accel remained on the fence. Adams emailed Kapor: “They are currently waffling around deciding the size of the market. They are convinced that UUNET can become a $30 million company but aren’t (yet . . .) sure it has the potential for $100 million.”
In October 1993 Accel and Menlo Ventures, along with another firm, invested $1.5 million in UUNET at a valuation just over the $8 million offered by MFS.Accel doubted Adams’s ability to lead the fast growing company. Accel approached New Enterprise Associates (NEA), which had an office in Maryland. Peter Barris, a new partner at NEA, had executive-level experience at GE Information Services and two successful software start-ups. Barris’s background and NEA’s proximity to UUNET de-risked the investment. This led to NEA’s becoming UUNET’s third Venture Capital investor.
Soon after the investment, $750,000 of unpaid invoices were discovered, swallowing half of the new $1.5 million investment. Facing insolvency, the Venture Capitalists provided an additional $1 million in exchange for more control and greater ownership. “I’ve got a gun to my head,” Adams emailed Kapor, explaining why he was accepting the onerous terms.
The investors convinced Adams that UUNET should hire GE veteran John Sidgmore as CEO. At first Sidgmore was dismissive of the opportunity: “Why in the world would I want to go to this little company, YoYo Net, WeWe Net, or whatever you call it?” Ultimately, he acquiesced.
Sidgmore explained why he accepted the job. “I respected [the investors] and they thought UUNET had a lot of potential that just had not been realized and wanted a professional manager to make that happen.”
With Sidgmore at the helm, UUNET’s investors were content. “John brought [UUNET] credibility that said we were serious because we had brought in serious management . . . [I]t said we were ready to play,” said John Jarve of Menlo Ventures.
Sidgmore, who became my boss a couple of years later, was both disarming and intense. He was shorter and heavier than he looked in his online profile. Sidgmore wore expensive Canali suits and trendy Ferragamo shoes, giving him the sheen of a new-generation Internet executive versus the old-time phone company leader derisively called a “42 long” for the typical cut of a CEO’s suit from that era. Sidgmore was easy to respect, fun to be around, and, given the insatiable capacity requirements of the UUNET network, difficult to please. He focused hard on the business of the Internet, not so much the technology.
UUNET chose well, as Sidgmore proved to be a perfect leader for the Internet pioneer. Sidgmore convinced Microsoft to become a 17 percent owner of UUNET and use UUNET as its underlying network backbone, supporting Microsoft’s quest to be a global leader in Internet access.
Sidgmore shared his excitement at this to the New York Times: “It’s going to enable new classes of applications and users.” He also recognized the significance to UUNET: “I never dreamed there was one killer opportunity that could make the company. I have a very happy board.” Adams added, “If Microsoft’s successful, we’ll be successful.” Luckily, Microsoft did just fine.
One month later Sidgmore struck a deal with AOL, which meant that UUNET would carry most of the Internet traffic for the two largest Internet brands. “We’re seeing almost out-of-control growth in the industry. It’s been a rocket ride,” Sidgmore exclaimed.
In May 1995 UUNET raised $68 million in an IPO. Its stock price doubled in its first week of trading, which put the Market Value of UUNET at $900 million. By November the stock reached its peak of $93.25, valuing UUNET at close to $3 billion.
To fuel its rapid growth, UUNET was burning cash. In early 1996 Sidgmore announced plans to raise $285 million by selling additional shares to the public. In March 1996 he withdrew the offering, citing UUNET’s then mid-$20s stock price as the reason.
Meanwhile, MFS continued to be the beneficiary of UUNET’s growth, and Crowe’s interest in owning UUNET grew stronger. Knowing Microsoft’s support was critical, Crowe visited Microsoft CEO Bill Gates and received Gates’s blessing, but only after reinforcing his commitment to retaining Sidgmore.
By May Crowe’s MFS affirmed its courtship by agreeing to acquire UUNET for $2 billion. Sidgmore explained, “This is a scale game, and to prevail you have to get big fast. We could have stayed independent, but we could not be the leader if we did that.”
MFS was also seen as a good cultural fit based on its entrepreneurial and aggressive corporate style. “They are just like us, not some Bell-heads we have to reshape,” said UUNET board member Daniel C. Lynch. “We couldn’t find a better match.”
Adams did well. His take was $138 million. Reflecting on his 1993 decision not to sell to MFS for $8 million, Adams said, “It looks like I made the right decision. But you know, it was never about the money.” Sure it wasn’t.
Explaining his rationale for the combination, Crowe saw “a fundamental shift in the nature of communications, from the voice-oriented network that has been around for 70 years or so, to a whole new type of network based on IPs. More and more, data, voice and even video will be moving to Internet-based platforms. It’s a force that is almost unstoppable, with tremendous cost advantages.”
Sidgmore was onboard. Still in reflection, he said, “It is a little bittersweet to hand over the company, because, really, what we are giving up is our baby.” I felt the same way when I sold my baby, Zayo Group, in 2020.
If Sidgmore knew the nightmare that was soon to transpire, he certainly would have done something else with his baby. Stay tuned.
PSINet—Bill Schrader#
William “Bill” L. Schrader had an audacious vision: “I would like to build a system that can deliver all the media to all the customers on earth.”
Schrader was without question one of the pioneers of the Internet. He remained at Cornell University after his 1974 graduation. NSF launched NSFNET, which funded several regional data networks that collectively became the initial Internet Backbone. Schrader built the first NSFNET backbone, which linked the national supercomputer centers. He then created NYSERNet, a nonprofit organization to connect New York State’s universities, research institutions, medical centers, and libraries.
In 1989 Schrader became one of the pioneers intent on commercializing the Internet when he co-founded PSINet. He financed the company the old-fashioned way, using credit card loans and proceeds from the sale of a family car. Later, he received backing from Venture Capitalists, including Bessemer Venture Partners, Matrix Partners, and Sigma Partners.
To get started PSINet purchased NYSERNet, the nonprofit launched by Schrader, for $34 million. Then in 1991 PSINet partnered with UUNET to co-found a trade association of Internet providers. The nonprofit established the Internet’s first exchange point, which exchanged traffic between providers via a router operated by PSINet. This router was moved from its original location in Santa Clara to Palo Alto. This site, dubbed the Palo Alto Internet eXchange (PAIX), became the early Internet’s most important interconnect.PAIX was co-founded with Internet pioneer Paul Vixie, whose contributions included the development of the Domain Name System (DNS). AboveNet, before being acquired by MFN, acquired PAIX from Digital Equipment Corporation. When MFN acquired AboveNet in 1999, PAIX came along with it. Vixie was the CTO of the combined company from 1999 to 2001.
On May 1, 1995, PSINet went public at a valuation of $362 million. Schrader used his equity as currency to acquire bandwidth to support PSINet’s network. In exchange for 20 percent of PSINet’s equity, he secured long-term credits to purchase $240 million worth of bandwidth services from the fiber upstart Broadwing Communications, which will be introduced in the next chapter of this story.The original name of Broadwing was IXC Communications. The Broadwing name was adopted when the company was sold in 1999.
Schrader was bold as he predicted the future of communications. When discussing Bell Atlantic, he likened the Baby Bell to the long-lost island of Atlantis, declaring, “Bell Atlantis is dead. They cannot exist in [the future].”
Schrader told an executive as he was interviewed to join PSINet as COO, “We’re going to kill the phone companies, and we’re going to be bigger than AT&T, and it will be a lot of fun.”
Schrader was known for speaking his mind. Sidgmore joked, “Bill’s report card in sixth grade said ‘Doesn’t play well with others.’”
In 1998 Schrader rejected an offer to buy at least a 51 percent stake in PSINet for $10 a share in cash, which was a 19 percent premium to its stock price.
Sidgmore also provided Schrader the opportunity to cash out, saying, “I’ve tried to buy PSINet at least 10 times over the last few years. Right after MFS bought us we tried . . . a bunch of times, and [Bill] would never sell. . . . I’m a big supporter of Bill, as wacky as he is. Whatever else you say, good or bad, he is steadfastly committed to his vision for the company.”
Schrader was a gambler. He wasn’t ready to walk away from his dream. When we pick up the PSINet story later in “The Bandwidth Boom Gold Rush,” we’ll see whether Schrader made the right bet by holding rather than selling PSINet.
BBN Continued—George Conrades#
When we left the BBN story, the Internet pioneer was on the outside looking in as UUNET and PSINet launched the commercialization of the Internet. “We were a company whose time had come, and yet we didn’t have a presence,” observed George H. Conrades, the thirty-one-year veteran of IBM who was named BBN CEO in 1994.
Conrades’s vision was to reposition BBN from a hardware company to a leading provider of Internet network services. To fund the transition, BBN sold its router business to Cisco for $120 million, deploying the proceeds to acquire Internet service providers (ISPs).
BBN spent $25 million to buy three of the original nonprofit NSFNET networks.BBN purchased New England Academic and Research Network (NEARNET) from MIT, Harvard, and Boston University in 1993; the Bay Area Regional Research Network (BARRNET) from Stanford University in 1994; and SURAnet, which was bought from the Southeastern Universities Research Association in 1995. In 1995 BBN rebranded itself as BBN Planet to signify its intent to be a global Internet provider. Conrades announced a $55 million contract to provide Internet Backbone services to AOL, which grew over several years to an annual revenue of $400 million.
Next, Conrades formed a strategic relationship with AT&T, making BBN Planet the exclusive provider of Internet access and AT&T a minority owner of BBN Planet for $8 million. BBN’s stock doubled in the month following the AT&T announcement.
In its 1995 article titled “Innovator Is Leaving the Shadows for the Limelight,” the New York Times took note of the BBN transition and the enthusiastic support of its investors: “Until recently other companies took [BBN’s] inventions and turned them into multimillion-dollar businesses. With its stock now trading at a record high, Conrades’s instincts apparently proved correct.”
BBN Planet grew rapidly in the 1990s, achieving a revenue run rate that approached $200 million in 1997, more than double the prior year. To keep pace with the revenue growth, substantial investment was needed for bandwidth and equipment. Like Sidgmore, Conrades concluded BBN needed a fiber network partner. “It’s obvious that we don’t have global scale or reach or the necessary financial resources to compete going forward,” he said.
Given the AT&T strategic relationship, Wall Street assumed AT&T would be the acquirer of BBN. Much to the Street’s surprise, however, a different suitor approached BBN. In the spring of 1997, BBN announced it was selling to the regional phone company GTE, led by CEO Charles (Chuck) R. Lee, for $690 million. “Together we are an almost perfect strategic fit—our technology and their resources,” explained Conrades.Conrades’s biggest accomplishment of his fifty-year career occurred after BBN. In 1999 he was named CEO of the start-up Akamai Technologies, which became the global leader in content distribution networks. Though I never had the opportunity to meet Conrades, Akamai was among Zayo’s largest customers, and Conrades and I were both recipients of the University of Chicago’s Distinguished Alumni award, his in 2014 and mine in 2016.
“Almost perfect.” The reference reminds me of an exchange between Jack Singer, played by Nicolas Cage, and Betsy, played by Sarah Jessica Parker, in Honeymoon in Vegas.
Jack: Do you know what a straight flush is? It’s like . . . unbeatable. Betsy: Like unbeatable is not unbeatable. Jack: Hey. I know that now. Okay.
Conrades’s almost perfect strategic fit proved to be far from perfect, as we will learn when we cover Lee leading GTE’s swoop into the Bandwidth fray during the Gold Rush and the flaming downfall of GTE’s spinout named Genuity during the meltdown.