Monday, July 29, 2002
what's hot what's not
Qwest is the latest communications company to be caught at dark fiber accounting.
Optical Fiber has the potential to carry enormous amounts of data. Dark Fiber is optical communication cable that runs from point A to point B but carries no data. The 90's saw a large chunk of money spent running optical cable around the world. The companies that deployed and owned the cables (Global Crossing) sold capacity to the telecommunication companies, (WorldCom, MCI) and then the games began. Company A bought capacity from Company B's system and booked it as a capital expense, (a capital expense is something that you buy that has a lifetime over 3 years and accounting principles allows you to show pieces of the expense over time, which does not hammer your bottom line by showing this big expense against what ever revenue you may be making) while selling the same capacity to the other firm, swapping checks with the other company and booking that immediately as revenue.
The problem arrives when you realize that this capacity 'deal' served no purpose as none of these companies ever lit up the fiber. Both companies show this great revenue growth without actually having to do anything as mundane as actually lighting up the fiber and creating a return on investment by selling this capacity, which as any Business 101 class will tell you, is required if you want to make money selling either goods or services. This creative accounting is where the fraud bit comes in. They basically sold both sides of the same piece of land to each other.
Bob Hiler has a great explanation of how this worked. "The Corporate Pyramid Scheme"
After these thieves and liars are convicted, they need to have all of their assets sold off as compensation, and brought here to Arizona where Sheriff Arpaio can house them in Tent City, and put them on a chaingang performing Public Community Service, for the entire length of their sentence.
The tragedy here is the thousands of people whose jobs are vanishing, and because of who they worked for are now being tarred with the same brush of distrust, and whose years of service and retirement plans have been shattered by the greed, fraud and theft perpetrated by people whose responsibility was to run a company in an honest manner.
The only way that you will ever get a response is to apply a stimulus. A crude but graphic example goes like this: The OUCH that is a response to a poke in the eye with a sharp stick.
Politicians by their very nature are herd animals. Good politicians can smell a trend and get in front to give the appearance of leadership. They respond to stimulus. In order of impact we currently have MONEY, VOTES and principles as stimuli.
Money is winning. Abstentions as a form of protest has brought us to this point. As individuals we only have votes. This year bring two friends with you to the voting booth.
The Rogue Librarian has a piece about web standards on the Library Journal website.
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