MCI WorldCom plans to build a second frame-relay network to run parallel to the one that caused 10 days of outage woes for 3,000 companies, company officials said yesterday.
Bernard J. Ebbers, CEO of MCIWorldCom, told analysts in a conference call during a quarterly earnings report that the August experience was the "catalyst" for the company to strengthen its frame-relay service with the parallel network. The full call is available for replay at www.broadcast.com.
The parallel network means MCI WorldCom will be able to provide its largest customers network diversity and performance levels that will exceed those currently available, Ebbers said.
The comment came in addition to remarks that $29 million in refunds were paid out to customers affected by the outage. Chief financial officer Scott Sullivan said that $29 million is expected to be the full extent of the refund cost, with no more incurred in the current quarter.
The outage caused many business disruptions, including loss of all electronic trading for the Chicago Board of Trade over several days. Some customers and industry analysts said MCI WorldCom's biggest failing was not the outage, but its slowness in giving an explanation to customers and not having a backup plan.
With a parallel frame-relay network, MCI WorldCom could theoretically put all data traffic on the new network if the old one developed problems, depending on the size of the proposed network and other details. However, Ebbers and other MCIWorldCom officials didn't divulge any of those details, including when the new network would go live or how much it will cost. A spokeswoman said the new network is going to be a part of the company's ongoing "network evolution strategy."