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I have a question about the recent DRIP Port articles comparing Enron and Williams. Any light anyone can throw on this would be appreciated.

It starts here with a comment made by Doug Wyman, in a post quoted in the Drip portfolio evening article from March 27, 2000, written by George Runkle (TMF Runkle) here:
http://www.fool.com/dripport/2000/dripport000327.htm
…and re-quoted here in its entirety that said:

"Finally, we hear from Doug Wyman who disagrees with Enron's use of an IP-only network:
IP predates ATM by a couple of decades, and while it is a reliable workhorse for e-mail, interactive connections and LAN file servers, it has serious shortcomings for adding voice and video, shortcomings which motivated the design of ATM. Most of the experienced data carriers use a combination of ATM over the long-haul circuits and IP for the last mile and/or LAN to take advantage of its ubiquitous support on PCs and workstations. Combining voice and quality streaming video with legacy data all the way to the desktop will require a migration to ATM from end to end. Legacy data alone will not energize bandwidth trading."


Mr. Wyman's comments were apparently stimulated by a paragraph in the Drip Port evening article from TMF Rrunkle's dated March 20, 2000 available here:
http://www.fool.com/dripport/2000/dripport000320.htm
…which said:

"As a final note, I asked Mr. Gros about Enron's network, which is pure IP (Internet Protocol) whereas Williams Communications has an ATM network. Mr. Gros says that "ATM is the network of the past, IP is the network of the future." He said that IP "treats digital transmissions as elements of a portfolio," providing more efficient utilization of the network. Basically, IP breaks messages up into small packets that may use different routes to get to the same destination. This way, available routes are used more efficiently, making communication much cheaper."

So, Doug apparently read the paragraph referenced immediately above, and made the comments quoted above that. That is how we got here.

Starting with the definitions of the terms used here, here we go:

TCP/IP (Transmission Control Protocol/Internet Protocol) -- This is the suite of protocols that defines the Internet. Originally designed for the UNIX operating system, TCP/IP software is now available for every major kind of computer operating system. To be truly on the Internet, your computer must have TCP/IP software.(copyright-1)

"Summary: TCP and IP were developed by a Department of Defense (DOD) research project to connect a number different networks designed by different vendors into a network of networks (the "Internet"). It was initially successful because it delivered a few basic services that everyone needs (file transfer, electronic mail, remote logon) across a very large number of client and server systems."
From:
http://pclt.cis.yale.edu/pclt/COMM/TCPIP.HTM
(a wonderful brief high level look at what it is and how it came about -P)

Internet (Upper case I) The vast collection of inter-connected networks that all use the TCP/IP protocols and that evolved from the ARPANET of the late 60's and early 70's. The Internet now (July 1995) connects roughly 60,000 independent networks into a vast global internet. ( copyright-1)

IP- is responsible for moving packet of data from node to node. IP forwards each packet based on a four-byte destination address (the IP number). The Internet authorities assign ranges of numbers to different organizations. The organizations assign groups of their numbers to departments. IP operates on gateway machines that move data from department to organization to region and then around the world.
http://pclt.cis.yale.edu/pclt/COMM/TCPIP.HTM (previously cited)

ATM Asynchronous Transfer Mode: A transfer mode in which the information is organized into cells. It is asynchronous in the sense that the recurrence of cells containing information from an individual user is not necessarily periodic.
http://www.atmforum.com/atmforum/library/glossary/gloss-a.html

ATM Information Transfer : ATM is a fast packet oriented transfer mode based on asynchronous time division multiplexing and it uses fixed length(53 bytes) cells. Each ATM cell consists of 48 bytes for information field and 5 bytes for header. The header is used to identify cells belonging to the same virtual channel and thus used in appropriate routing.
http://cne.gmu.edu/~sreddiva/bconcepts.html

ATM Routing: ATM is a connection oriented mode. The header values(i.e. VCI and VPI etc.) are assigned during the connection set up phase and translated when switched from one section to other. Signaling information is carried on a separate virtual channel than the user information. In routing, there are two types of connections i.e. Virtual channel connection (VCC) and Virtual path connection (VPC). A VPC is an aggregate of VCRs. Switching on cells is first done on the VPC and then on the VCC.
http://cne.gmu.edu/~sreddiva/bconcepts.html (previously cited)

The Confusion factor in Doug Wyman's observation: (and everything since)

"To insure that all types of systems from all vendors can communicate, TCP/IP is absolutely standardized on the LAN. However, larger networks based on long distances and phone lines are more volatile. In the US, many large corporations would wish to reuse large internal networks based on IBM's SNA. In Europe, the national phone companies traditionally standardize on X.25. However, the sudden explosion of high-speed microprocessors, fiber optics, and digital phone systems has created a burst of new options: ISDN, frame relay, FDDI, Asynchronous Transfer Mode (ATM). New technologies arise and become obsolete within a few years. With cable TV and phone companies competing to build the National Information Superhighway, no single standard can govern citywide, nationwide, or worldwide communications.
http://pclt.cis.yale.edu/pclt/COMM/TCPIP.HTM (previously cited, emphasis mine)

So, (finally) it seems to me that the ORIGINAL article in the Drip Port was almost certainly referring to the network ENRON uses internally and perhaps to the network over which it will receive and process their bandwidth marketing orders. There is no such thing (to my knowledge) as IP bandwidth. IP is an end-node-to-end-node protocol that can be (and is) transmitted over a number of different types of networks specifically including ATM. The protocol ENRON uses internally or to process the information coincident to the execution of their plan to make a market in available bandwidth is of no particular importance to the success or failure of their business model (at this point) and is almost certainly IP. Further, additional protocols such as OSPF, Hop-Count and EIGRP already 'look' for the shortest (or least congested) path for IP traffic further adding to my conclusion that there is a basic misunderstanding of the relationship between IP, bandwidth caching, and ENRON.

I have a different problem with the Williams side of the equation (at least what I have been able to find of it). Is the stipulation that Williams internal network is all ATM? If so, do they own the switches and/or have exclusive access to them? If not I can pretty much promise you that there traffic sometimes gets rerouted into and out of other network technologies. Have they developed an ATM end-to-end protocol that permits end nodes to communicate across their network without using TCP/IP at the end nodes. If so they should market that, it is worth a fortune. If the contention is that Williams intends to 'make a market' only in excess ATM switch capacity that would make some sense but how does it DIFFER from ENRONS plan? I personally believe that LIMITING the market to ATM switch excess capacity would be a mistake but that is a different question all together.

I don't have a dog in this fight folks. I am not currently invested in either of theses fine companies. I am not certain that Bandwidth marketing (as valuable a play as it might well become) will have a dramatic effect on the bottom line of either of these companies unless they spin off the effort into a trading stock or other vehicle.

I hope that I have not come across as arrogant or as a know it all. I certainly do not feel like I know that much about this and I freely admit that I may be the one who is all wet here. Having done my best though to research the issue and state my questions clearly I hope someone will step forward and help clear the matter up.

Thanks,
Paul

Notes:
(1) Definitions from: http://www.matisse.net/files/glossary.html: Permission is granted to use this glossary, with credit to Matisse Enzer, for non-commercial educational purposes, provided that the content is not altered including the retention of the copyright notice and this statement.
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