Q & A: Broadwing CEO sees smooth air ahead

By Denise Pappalardo
Network World, 06/11/01

Richard Ellenberger, CEO at Broadwing, is a telecommunications veteran who earned his stripes during 17 years at MCI. Ellenberger joined Cincinnati Bell two years before the company acquired IXC Communications and became Broadwing in 1999. Broadwing recently announced that its new fiber optic network now has national reach, with three of its rings completed. The service provider also announced a Gigabit Ethernet service trial and plans to introduce a voice-over-IP service for business users. Network World Senior Editor Denise Pappalardo recently talked with Ellenberger about the company's past and where it's headed.

Why did Cincinnati Bell buy IXC?

Right from the get-go we talked about optical networking. We did six months of due diligence on the network and decided IXC had the best network that was near completion. So in June 1999 we announced the deal. Then we started looking for the next technology that would elevate the network above what others were developing. That's right about the time Corvis and Ciena were starting to talk about optical switching capabilities. So we were able to jump on a new technology and also show financial strength.

You bring up the financial aspect of the company, which is now more important to potential and existing customers than it was 12 to 18 months ago. Where does Broadwing stand as far as revenue and debt?

We'll have about $2.5 billion in revenue this year. And we probably have about $2 billion to $2.5 billion on our books in debt, which is less than our competitors. We are not in the category of those companies that have financial strains. But financial strength has become a buying-decision issue and one of the reasons why our growth is exploding. We have the next-generation fiber, but we aren't a risky company to go with. We are doing well and continue to add jobs while others are cutting jobs.

How many employees do you have, and has the company had any layoffs?

Almost 7,000. The answer is yes [on the layoffs], but I want to be clear on this. We took our wireless, yellow pages, local telephone, pay phone and long-distance companies in Cincinnati and combined them into one company. There were 70 jobs eliminated when we made that change earlier this year. It had nothing to do with the economy.

Broadwing's national network is up and running, but it's actually not 100% finished. When will it be done?

By the end of 2002 we will be ending the need for more miles on our network. There will always be upgrades, but we don't anticipate the need for additional fiber at that point. There will be about 25,000 to 28,000 fiber-optic miles when we're done. Today, we service 135 of the top 150 cities.

When you say 25,000 to 28,000 fiber-optic miles what does that mean to customers?

It has to do with network capacity and our ability to control more of the network for our customers. Ninety-two percent of all of our traffic flows over our network, as opposed to traveling over leased capacity from other service providers.

Broadwing offers traditional voice services along with data offerings. How much does the company depend on voice revenue?

Our voice business grew 1% last year, and the overall company grew 26%. About 50% of our revenue comes from data and Internet services. We don't have the legacy installed base to worry about that other long-distance service providers have.

Will Broadwing build metropolitan-area networks in addition to its long-haul network?

The company's goal is to have national, metropolitan-area network coverage. We'll partner, swap capacity and build networks to meet that goal. Right now there isn't any one company that has a metro solution across the country. We can create that.

Q & A: Broadwing CEO sees smooth air ahead

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