Broadwing a Player in Optical Arena

In The World of fiber optics, data moves at the speed of light?and the competitive advantage technology provides can disappear just as quickly. But Broadwing Communications, the long-haul optical fiber counterpart of Cincinnati Bell (both are owned by Broadwing), hopes to combine tech leadership and a customer focus into a package that enterprises can’t ignore.

The company, founded in 1999 when Cincinnati Bell acquired Austin, Texas-based IXC Communications, has some unique attributes, including the first all-optical switched network, which went live in April. That network has the potential to give Broadwing capabilities unmatched by its competitors for at least the next year, according to analysts. Chief among those new options will be the opportunity to give customers access to added bandwidth on the fly by making a simple software change instead of having to upgrade hardware. Companies that need additional bandwidth for a Web event, for instance, could purchase the extra capacity, have it available within hours and return to their regular service level shortly afterward.

Broadwing also offers a couple of assurances that its competitors don’t provide: time-to-service guarantees and service-level agreements. Broadwing will guarantee order-to-live times ranging from 15 to 45 days, depending on the services purchased. If the company doesn’t deliver on schedule, the customer receives free service to make up for the delay. And once the connection is running, the company will guarantee minimum service levels, including 100 percent IP network availability and 65 millisecond round-trip latency?currently unique assurances in the fiber business, according to Lisa Pierce, research fellow at Giga Information Group in Cambridge, Mass.

Broadwing’s Baby Bell connection may also be key, particularly in a contracting economy. Like Denver-based Qwest, which merged with telco US West, having a more traditional telecom company behind the scenes brings a degree of stability and financial security.

Despite Broadwing’s seemingly strong stance, the company faces serious challenges. Qwest jumped out of the gate in 1995 and began garnering customers before Broadwing was even under way (Qwest has 106,000 miles of cable running globally).

Broadwing’s 18,500 nationwide miles of cable are merely the same as what the average U.S. city has, says Pierce. The Broadwing network does connect most major U.S. population centers. But its length is more than half that of the national network offered by Tulsa, Okla.-based competitor Williams Communications, for instance.

And a residing fear of a “bandwidth glut”?the concern that available bandwidth has outstripped demand?plus general nervousness in the tech sector have caused the stocks of Broadwing and its competitors to drop precipitously since last year’s highs.

Pierce also notes that while Broadwing may have the technology lead now, there’s nothing to prevent other companies?including much larger carriers like AT&T?from following the same path in the near future. “Technology is never a long-term differentiator,” Pierce says. And once Broadwing loses its technology lead, it will need to find other ways to separate itself from the pack?something besides lower prices. Competitors with deep pockets can outlast low prices, Pierce notes.

Broadwing’s customer-centric focus may be a big part of that equation for success. “Your relationship with the customers is what can make or break you,” says Pierce. “So the question is, How can [Broadwing] really make those relationships rock solid and grow them?”