Verizon Communications Inc. officials said Friday they are "hopeful -- not necessarily confident, but certainly hopeful" that they will be able to repair their badly damaged facility at 140 West Street in New York in time for Monday's planned reopening of U.S. securities exchanges.
The building -- located very near 7 World Trade Center, which collapsed Tuesday evening -- is one of five Verizon switching centers located in the currently closed sections of southern Manhattan. Verizon is New York City's largest voice and data communications carrier. It is also a critical communications link for the New York Stock Exchange (NYSE) and for a number of financial services companies and international enterprises with operations in Manhattan.
Verizon's 31-story West Street office handles 20 percent of Verizon's data circuits for the NYSE, said Verizon Co-Chief Executive Officer and President Ivan Seidenberg in a conference call with reporters on Friday afternoon. The other 80 percent of the NYSE's Verizon traffic runs through an office on Broad Street located further south, Seidenberg said.
The Broad Street office is running on generators and has been without commercial power since Tuesday's terrorist attack on the World Trade Center, but suffered no structural damage, according to Verizon officials. The West Street office, however, requires major clean-up and repair work and is still precarious in places.
Five stories of debris from the wreckage of 7 World Trade Center are pressing against the West Street building's back wall, said Verizon Vice-Chairman and President Larry Babbio. There are "major holes in the walls" in "six to eight places," and the layer of dirt and debris inside "is just phenomenal," he said. Verizon has about 100 people working around the clock to clean the building and the equipment it contains.
Several major financial markets, including the NYSE and Nasdaq, are scheduled to reopen for trading on Monday. Some 4,000 NYSE trading partners located in southern Manhattan are currently without phone service, Verizon officials estimated; reopening the markets will require restoring connectivity to those firms, many of whom will have to operate from offices outside the affected area.
"I think the outlook is promising," Babbio said, citing the redundancy built in to Verizon's network, the relatively good condition of the Broad Street office, and the company's ongoing efforts to repair or compensate for its damaged facilities. "I'm not naïve enough to believe that this is going to be a perfect situation, but the fact is it's going to be damned good."
Verizon has accounted for the vast majority of its approximately 2,200 employees working in and around the World Trade Center on Tuesday, officials said. An estimated half dozen Verizon employees are still missing, however, including one employee at the Pentagon and several who were working on the roof of the World Trade Center.
"We actually had people on the roof of the building talking to us while the building was burning," Seidenberg said. "Most people in this building (Verizon's midtown headquarters), including Larry and myself, watched every second of this occur. It has had an enormous effect on our resolve."
The cost of rebuilding IT and communications capabilities in the wake of Tuesday's attacks is likely to be billions of dollars, many analysts say. One research firm -- Carlsbad, California-based Computer Economics Inc. -- estimates the total bill will be about $15.8 billion, with $1.7 billion in immediate costs for the labor and equipment needed for emergency efforts.
Carriers will probably move to decentralize their future operations in response to Tuesday's catastrophe, said Gartner Inc. VP and Research Director Jay Pultz, who noted that Verizon's infrastructure "has worked surprisingly well for a disaster of this magnitude."
"All the carriers are very well prepared to deal with disasters, but this was a disaster of such magnitude," he said. "Fortunately, the damage suffered by communication providers was collateral damage. They weren't singled out. They need to ask themselves what they would do if they were singled out. ... It has always been the case that centralized facilities are very economic, but decentralized (operations) are more survivable. This terrible Tuesday will lead to people to rethink -- maybe we can't be as efficient economically, but can be more secure with decentralized infrastructure."
Overall, Verizon has done an excellent job responding to the crisis and re-routing communications around affected areas, he said.
But as New York City officials prepare to reopen Wall Street and several other sections of lower Manhattan, network problems and outages linger.
Several New York-area ISPs (Internet service providers), including America Online Inc., lost hundreds of dial-up connection ports Thursday evening when back-up power went down at an exchange at 25 Broadway, operated by Telehouse International Corp. of America.
The facility at 25 Broadway, which contains the New York International Internet Exchange (NYIIX), initially lost power Tuesday when debris from 7 World Trade Center's collapse damaged the building's commercial power supply, according to John Lee, deputy director of sales and marketing for the Staten Island, New York-based company. The building was switched to backup power, which failed at 5:20 PM Thursday after a water pump broke and the system overheated, Lee said. Power had not been restored as of midday Friday.
International communications are also being disrupted by the outages. New York is one of the largest collection facilities for Wirehub Internet BV, a Rotterdam, Netherlands-based provider of leased lines, Web hosting and collocation. With many of the company's New York servers down, including some at NYIIX, its customers must rely on backups and mirror Web sites hosted elsewhere in the world, said Managing Director Nick Vermeulen. To keep its leased-line customers connected to the U.S. part of the Internet, Wirehub has struck an emergency deal with Level 3 Communications Inc., Vermeulen said.
"At this moment it is unclear whether the diesel (backup) generators in New York will be reactivated. Expectations are that commercial power around Broadway will not be available before the coming weekend," Vermeulen said.
The overall attack-related drop in Internet capacity was "the worst ever, percentage-wise," said Bill Jones, director of public services of Internet performance monitoring company Keynote Systems Inc. -- but lag times still aren't as bad as they were three years ago, when the Internet was smaller and slower.
"It's a matter of perspective," Jones said. "The magnitude and the number of sites involved made this unique."
He noted that overall, dial-up connectivity remains strong, and performed "much, much better than expected."
"The Internet is performing every bit as it was designed," Jones said. "The Internet has come of age as a result of this disaster".