From: Andy Walden [mailto:andy@tigerteam.net] Sent: Sunday, July 15, 2001 3:02 PM

A unique situation such as the CW/PSI mess would have called for a prefix filter tweak, which, albeit, not automatic, relatively painless on a small scale (i.e, you don't have to change hundreds of customer routers because they don't have the talent themselves).

I disagree that the CW/PSI mess is unique. My analysis leads me to think that it might be a foreshadowing. Many of the mid-tier ISPs, and some of the larger ones, are over-extended on growth and short on revenue. They were caught by surpise, just as much as the rest of us, when the dot-com market tanked. That sucking sound you hear is the rest of us being dragged in. Those of us that have enough bank-cash to hold onto and sufficient revenue to resist the pull, will be successful. Two points, the DSL market (RBOCs are moving in) is soft and the wireless ISP market is soft (I hope Ricochet survives). The point is that one cannot assume that PSInet will be the last of those. The failure-mode is exactly the same as that for WebVan, excessive (debt funded) growth, excessive burn-rate, not enough revenue, and too long to ROI (not enough cash in the bank to last until profitability). Many ISPs are slicing the baloney so thin that you can see daylight through it. No one expected the market to collapse and impact revenues the way that it has. Couple this with a market that is used to getting everything for free and you have a major problem brewing. Monetizing such a customer-base is very much harder to do, than to say.