360networks

~ the goodbye ~

You could not have been a 360networks customer. Almost nobody could. It sold wholesale capacity to other carriers, which means its entire product was a number on somebody else's invoice, and the closest any ordinary person came to it was a packet passing through Chicago on the way somewhere.

So there is no memory to offer here and I am not going to invent one. In the years this company was raising billions to string glass between North American cities, I was on a modem in Ankara measuring my own connection in kilobits and waiting on a download overnight. Backbone construction is the layer of the internet that is invisible on purpose. It only becomes visible when it fails, or when the company doing it goes bankrupt loudly enough to make the business pages.

What makes this one worth a grave is not the money, though the money was ludicrous. It is that 360networks solved the actual bottleneck of the fiber boom, and the solution was a piece of heavy machinery.

~ the chronicle ~

~ the railplow ~

Every company laying long-haul fiber in the late 1990s hit the same wall. The glass was cheap and the crews were available, but you cannot dig a trench across a continent without the legal right to dig it, and assembling rights of way parcel by parcel takes years you do not have during a bubble.

The Lede family, who ran Ledcor Industries and had been in construction for decades before any of this, went at it from the other end. Railways already own a continuous strip of land from one city to the next, and they have owned it since the nineteenth century. 360networks negotiated with Canadian National Railway for the use of that strip, and then built a machine to exploit it. The Railplow was mounted on a flatbed railcar. It ran along the track cutting a trench and dropping in the conduit that would carry the fiber, then closed the ground behind itself, all in a single pass. They patented it. The patent went to a jointly held subsidiary, and 360networks kept a royalty-free exclusive license, which gave it a permanent speed advantage over the competitors that were also chasing rail corridors.

~ the number ~

The company started life on 5 February 1998 as Pacific Fiber Link, L.L.C., building a single route from Seattle to Sacramento. Within two years it had renamed itself twice, first to Worldwide Fiber Networks and then to 360networks. It hired Microsoft's former chief financial officer Greg Maffei to run it and took private money from Michael Dell, Nathan Myhrvold, Liberty Media, and News Corporation.

It went public on 2 January 2000, at the exact top, raising C$2.4 billion and closing with a market capitalization of C$20.6 billion. In November of that year the company was worth $13 billion on revenue of $234 million for the first half. Then the arithmetic reasserted itself. Everybody had built the same routes at the same time, wholesale prices collapsed because there was vastly more fiber in the ground than traffic to fill it, and in early June 2001 360networks missed a debt payment. It filed for bankruptcy in both countries on 28 June 2001, roughly eighteen months after the IPO.

~ what it became ~

It did not die there, which is the unusual part. Wilbur Ross took a 12.5 percent stake in October 2002, the company came out of bankruptcy in November, and for the next decade it behaved like a scavenger rather than a builder. It bought Group Telecom on the way out of Chapter 11, then Dynegy's US communications business in 2003, and in January 2004 it took the assets of Touch America out of a bankruptcy of their own. It sold its Canadian operations to Bell Canada for C$275 million the same year, which is a strange thing for a Canadian company to do and tells you where the surviving value was.

Zayo Group closed the purchase on 1 December 2011 for $345 million, or $318 million net after assuming a working capital deficit. What Zayo got was 19,879 route miles across twenty-two states and British Columbia, and a network that made it transcontinental overnight. The 360networks name went into the filing cabinet. The domain has since been picked up by an unrelated managed IT services firm in New Jersey, which is why this grave carries no original URL: type it in today and you get a working business that has never laid a foot of fiber.

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