[1st-mile-nm] National Lambda Rail shutting down

Thu Mar 27 13:01:42 PDT 2014

Well James, if you’ve been in the industry THAT long like I have, you probably 
remember when FOC meant FIRM order Commitment!

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On Mar 27, 2014, at 1:58 PM, James Sturges <jhsturges at att.net> wrote:

I remember when IRUs were Indefeasible.

-----Jim

From: Steve Ross <editorsteve at gmail.com>
To: C Steven Lucero <cstevenlucero at latingroupllc.com> 
Cc: Richard Lowenberg <rl at 1st-mile.org>; "1st-mile-nm at mailman.dcn.org" <1st-mile-nm at mailman.dcn.org> 
Sent: Thursday, March 27, 2014 12:49 PM
Subject: Re: [1st-mile-nm] National Lambda Rail shutting down

Yeah but they can't simply abrogate an IRU. In this case, I believe, the lease runs until 2026. The IRU document almost always includes a maintenance deal that gets renegotiated (annually, often, but in this case 7 years) because maintenance is an opex, But the IRU continues for the 20 years. It is capex. IRUs are often paid in advance, too. Nice to know Level3 has a new current policy but it normally would not affect old deals.I might add that even with unpaid bills, a nationwide fiber pair on Level3 has gotta be worth a hell of a lot more than the $100 million that supposedly changed hands.

In short, something is weird here. I just suspect we don't know the facts for sure.

BTW, if you know anyone interested in IRUs or straight investment on Emerald, a 6-pair trans-Atlantic build that is supposed to commence in a few months, send them my way. 

Steve Ross
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On Thu, Mar 27, 2014 at 1:30 PM, C Steven Lucero <cstevenlucero at latingroupllc.com> wrote:
Can't be done, at least from what I'm being told. The 3 years of debt still has not been paid to L3. Under new corporate policy, L3 has ceased selling AND leasing dark fiber. Moreso, of the $100MM Dr. Soon invested into NLR, there are supposedly $36MM unaccounted for. Looks to be an ugly legal (or criminal?) situation.

C. Steven Lucero
President
LatinGroup LLC
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On Thu, Mar 27, 2014 at 10:04 AM, Steve Ross <editorsteve at gmail.com> wrote:
Even though the new owner walked away from NLR, maybe it still has assets, or NM could challenge the deal... or NM could move over to the I2 system. Long shots all. But the original NLR "lease" on the fiber would under normal circumstances run to 2026, if what I remember is correct. Certainly, the lease document itself and the issue of who provides the managed services (lights the fiber, mainly, and maintains it), should be known by university (customer) IT departments.

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On Thu, Mar 27, 2014 at 12:00 PM, Owen Densmore <owen at backspaces.net> wrote:
Could someone summarize/simplify for this noob!?  Fascinating stuff.

   -- Owen

On Wed, Mar 26, 2014 at 10:17 PM, Steve Ross <editorsteve at gmail.com> wrote:
That's odd. I thought the IRU ran for 20 years starting in 2006. I think your friend meant the managed service contract with Level3, which would have been due to expire in 2013 (It was the typical 7 year deal, I think, and also started in 2006, because NLR was originally on a Qwest backbone for the first few years). Does this mean the NLR leased fiber, though dark, still is an NLR asset? Or did the IRU go back to Level3, perhaps to settle the debt on the service contract? As I remember, the IRU was for a fiber pair going everywhere Level3 went, or everywhere in the United States. I know a lot of the colleges on NLR also are on I2, and not many probably need both, but I2 isn't secured by an IRU -- Level3 lights it more or less the way Level3 wants to light it. So it isn't as useful as a research tool, I would think. But it still is capacity that maybe NM schools can use?

Steve Ross
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On Wed, Mar 26, 2014 at 11:20 PM, C Steven Lucero <cstevenlucero at latingroupllc.com> wrote:
Richard,

I met this week with a person intimately familiar with this. In short Level3 issued a policy in recent years that they would not renew any fiber IRU's. Simulataneously, it was learned that NLR was 3 yrs in default of payments, which was not disclosed to Dr Soon-Shiong. Given that the term of the IRU was coming up, he declined to pay the balance due and L3 cancelled the contract. This happened in Jan.

Just an FYI. 

Best,

Steven

On Wednesday, March 26, 2014, Richard Lowenberg <rl at 1st-mile.org> wrote:
Thanks for the posting, John.

It would be good to hear from UNM, State IT staff or others with knowledge about this, as there has been little press coverage on the matter.

This from Wikipedia:
In November 2011 the control of NLR was purchased from its university membership by a billionaire Patrick Soon-Shiong for $100M, who indicated his intention to upgrade NLR infrastructure and repurpose portions of it to support an ambitious healthcare project. 
The upgrade never took place.   NLR ceased operations in March 2014.

RL

On Mar 26, 2014, at 7:51 PM, John Brown wrote:

> Various educational institutions are reporting that the National
> Lambda Rail will cease operations shortly.
> 
> What does this mean for NM,  UNM, NM State, and the taxpayers of NM
> who have invested heavily into this infra-structure.
> 
> Santa Fe's recent "fiber RFQ" was relying on using NLR assets to get
> to the world and thus hopefully reduce the cost of bandwidth...

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1st-Mile Institute          www.1st-mile.org  
P. O.  Box 8001, Santa Fe, NM    87504
505-603-5200                 rl at 1st-mile.org
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